Chevron invests $7 billion in Venezuela to double oil production

Chevron has committed to invest over $7 billion in Venezuela to double its oil production to nearly 600,000 barrels per day. This announcement comes just days after the Trump administration revealed a significant oil deal with Venezuela, marking a pivotal moment for both the company and the nation. Chevron, the only major oil firm still operating actively in Venezuela, has been involved in the country since 1923.

The investment is part of a broader strategy to revitalize Venezuela's struggling oil industry, which has seen production plummet to just 1.01 million barrels per day in 2025. This output is only a third of what the country produced two decades ago, a decline attributed to political mismanagement, U.S. sanctions, and a lack of investment. President Trump aims to restore Venezuela's oil production to help replenish U.S. oil reserves amidst ongoing instability in the Middle East. The recent agreement grants North American Blue Energy Partners (NABEP) a century-long right to develop 17 oil fields in Venezuela, estimated to hold around 65 billion barrels of oil.

Chevron plans to focus its expansion efforts on the Orinoco Belt, rich in extra-heavy crude oil reserves. The company has received additional development rights in the Carabobo region, which is expected to enhance its production capabilities. Notably, Chevron anticipates achieving production costs of around $20 per barrel, a figure that positions the company to maintain profitability even in fluctuating market conditions. This low-cost approach complements Chevron's existing portfolio, which includes high-margin operations in the Permian Basin, offshore Guyana, and the Bakken region.

For Chevron investors, the implications of this expansion are significant. The expected increase in production volume, combined with cost efficiency, should bolster the company's financial outlook. Chevron's recent acquisition of Hess for $53 billion is already projected to drive earnings per share and free cash flow growth at compound annual growth rates exceeding 10% through 2030. Additionally, the firm plans to execute share buybacks of 3% to 6%, further enhancing shareholder value as it navigates this new chapter in Venezuela.