Chevron said on 2 September that it has reached agreements to revise the terms of its joint ventures in Venezuela as part of a $7 billion investment plan in the country. The spending will be spread over 5 years and follows the Houston-based supermajor's renegotiation of fiscal, commercial, and legal terms governing its operations in Venezuela.
The agreements grant Chevron additional acreage in the Orinoco Belt, where most of Venezuela's heavy crude production is located. The company said it expects to double its current production to about 600,000 B/D at a total cost of less than $20/bbl.
“Chevron’s history in Venezuela spans more than a century, and our expanded position reflects our confidence in the country’s deep resource potential and its ability to compete for investment within our portfolio for decades,” Mike Wirth, CEO of Chevron, said in a statement. “With improved terms and additional acreage, we are strengthening a portfolio that we believe can deliver attractive low-cost oil growth, support energy supply, and create differentiated long-term value. This progress reflects the dedication of our Venezuelan employees and our long-standing focus on the responsible development of the country’s resources.”
Chevron holds a 49% interest in Venezuelan projects through its joint venture with Petroindependencia and has been granted rights to drill and produce from the adjacent Carabobo 1 and Carabobo-2-South-A areas in the Orinoco Belt.
The company said the greenfield developments strengthen its growing portfolio in the country and build on an agreement reached in April that increased its working interest in the joint venture. In April, Chevron was also granted rights to develop the Ayacucho 8 field, which lies adjacent to a separate joint venture with Petropiar.
Chevron added that its three joint ventures in Venezuela have increased production by 15% year to date.
Wirth also said in the announcement that Chevron was grateful for the leadership of US President Donald Trump's administration and US Energy Secretary Chris Wright. “Continued engagement between government and industry is essential to advancing projects that support energy security, economic growth and continued investment,” he said.
The deal follows a separate agreement between the US federal government and Venezuela that grants the US a significant stake in 17 oil fields with an estimated 65 billion bbl of recoverable reserves.
Chevron has operated in Venezuela for more than 100 years. In addition to its joint ventures with Petroindependencia and Petropiar, it also holds interests in Petroboscan, an onshore project in Zulia state in western Venezuela.