Chevron (NYSE:CVX) said Wednesday it had agreed updated terms for its joint ventures in Venezuela and plans to invest more than $7 billion in the country over the next five years.
The company said the investment is intended to support an increase in production to approximately 600,000 barrels per day.
Chevron signed multiple agreements establishing revised terms for its Venezuelan joint ventures, covering future investment, project development and production growth. The arrangements also include additional acreage in the Orinoco Belt.
The production and investment figures represent company plans and remain subject to project execution, operating conditions and other relevant factors.
Agreements Follow U.S.-Venezuela Oil Deal Announcement
Chevron’s announcement follows separate negotiations involving the U.S. and Venezuela.
President Trump said last week that the U.S. had reached an agreement with Venezuela giving it majority control over approximately 65 billion barrels of the country’s oil reserves.
The supplied information does not provide the detailed terms of that agreement or establish the precise legal and commercial mechanisms through which the stated control would operate.
The Chevron agreements were negotiated separately from the U.S.-Venezuela arrangement.
Chevron Targets Production Growth Across Three Joint Ventures
Chevron said the planned investment will support production growth across its three Venezuelan joint ventures.
According to the company, output from those operations has increased 15% this year.
Chevron expects total costs to remain below $20 per barrel. This represents the company’s current expectation and may vary depending on future operating and market conditions.
The additional acreage secured in the Orinoco Belt is also expected to support the company’s future development activities.
Chevron Maintains Longstanding Venezuela Operations
Chevron has maintained operations in Venezuela for more than a century.
ExxonMobil and ConocoPhillips have not operated in the country since leaving in 2007, when their assets were nationalized under the government of Hugo Chavez.
Venezuela’s oil industry subsequently experienced a prolonged decline in production and investment. The supplied information attributes this in part to management of the sector under the governments of Chavez and Nicolas Maduro.
Following Maduro’s removal from power in January, President Trump has encouraged U.S. oil companies to increase investment in Venezuela.
Chevron’s planned spending represents one such investment programme, although the extent to which the projects achieve the company’s targeted production level will depend on their implementation and future operating conditions.