Chevron announces deal to expand its oil production in Venezuela

The United States' Chevron and Italy's Eni, along with other foreign energy producers, signed agreements in Caracas on Wednesday to expand oil projects in Venezuela, under the watchful eyes of interim President Delcy Rodriguez and US Energy Secretary Chris Wright. These deals are distinct from a controversial Caracas-Washington agreement recently unveiled, which grants the US access to 17 oilfields.

Most of the signed pacts involve project expansions that have been under negotiation with Venezuela's oil ministry and state oil company PDVSA as part of the transition of numerous energy contracts to new terms following the approval of a sweeping oil reform in January. However, these signings signify the latest efforts by long-standing oil companies in Venezuela to aid the nation in reviving its struggling oil industry, which currently produces around 1.25 million barrels per day, significantly lower than its peak of 3 million barrels per day in the late 1990s.

Most major oil companies have avoided investing significantly in Venezuela for years, having retreated after a nationalization in 2007. The sector has also suffered due to insufficient investment, mismanagement, and US-imposed sanctions, which now a $100 billion investment plan spearheaded by the US aims to double Venezuela's output in the coming years.

Chevron CEO Mike Wirth and Eni CEO Claudio Descalzi attended the signing, marking Wirth's first visit to Venezuela, where the company has maintained a consistent presence despite other oil majors withdrawing post-Hugo Chavez's seizure of assets. Chevron aims to invest over $7 billion to double its output in Venezuela to approximately 600,000 barrels per day within the next five years, as part of its strategy to expand joint ventures with PDVSA.

Additionally, GE Vernova signed a power sector alliance, which Rodriguez emphasized due to the country's significant electricity deficit, leaving households without electricity for hours and negatively impacting key industries. Venezuelan businessman Alejandro Betancourt was absent from the ceremony, days after his company NABEP signed a separate deal with Washington to gain access to a fifth of Venezuela's oil reserves.