Chevron Announces $7 Billion Venezuela Expansion as Washington Gains Control Over a Share of the Country’s Oil

Chevron has unveiled a $7 billion expansion of its Venezuelan operations, announcing plans to develop two additional oil fields in the country’s vast Orinoco Belt.

The announcement came only hours after Venezuela’s National Assembly approved a separate agreement that would give Washington control over a significant portion of the country’s oil assets.

The US oil giant said its new project, carried out through its joint venture with Petroindependencia, would involve the development of two previously undeveloped fields located close to Chevron’s existing operations. Chevron holds a 49% stake in the venture.

The expansion is expected to more than double the company’s Venezuelan production over the next five years, eventually taking output to approximately 600,000 barrels per day. The company detailed the investment in a press release issued on Wednesday.

The announcement followed a visit to Venezuela by US Energy Secretary Chris Wright, who arrived in Caracas late Tuesday to announce new American investment in the country.

Chevron became the first major US corporate player to make a significant move following the agreement approved by Venezuela’s lawmakers.

Chevron has maintained a presence in Venezuela despite the sweeping nationalisation of the country’s oil industry under former President Hugo Chávez. The nationalisation process, completed in 2007, forced other major American oil companies, including Exxon and ConocoPhillips, to leave the country.

Shortly after arriving in Caracas, Wright spoke to the media about the potential economic impact of increased investment. He said that "as large investments flow into this country that creates more jobs which pushes wage pressure up and creates opportunity for Venezuelans' prosperity."

A controversial vote and questions over the agreement’s details

The Chevron investment is separate from another, potentially much larger arrangement that would give the United States significant control over oil resources representing roughly one-fifth of Venezuela’s reserves.

Venezuela’s National Assembly approved that agreement late Tuesday in a show-of-hands vote. However, several opposition lawmakers abstained, arguing that they had not been given access to the complete terms of the arrangement before the vote.

Opposition lawmaker Luis Emilio Rondón questioned the lack of transparency, saying, "We need and are obliged to know what is written in the fine print."

National Assembly chief Jorge Rodríguez defended the agreement by challenging its critics over whether the oil would be useful if it could not be developed. "Who benefits from this oil if it stays underground?" he asked.

US Secretary of State Marco Rubio offered a detailed description of the arrangement in Spanish during an online interview posted Tuesday. He said the agreement effectively placed a portion of the assets under the control of the US government.

"Essentially, this is now an agreement with the US government, specifically involving the Defense Department, which holds a special account allowing it to take possession of a certain percentage of these assets," Rubio said.

He added that American government support was intended to make it easier for the company involved to secure the private financing necessary to develop the oil fields.

Rubio said the "vast majority" of the 17 fields covered by the arrangement had previously been controlled by Chinese and Russian interests. The White House has presented the agreement as part of a broader effort to reassert the Monroe Doctrine and strengthen American influence in the Western Hemisphere.

The fields covered by the agreement reportedly contain 65 billion barrels of oil and come with rights lasting 100 years for North American Blue Energy Partners, or NABEP.

Under the proposed structure, a new company would be established in which the US Department of War's Office of Strategic Capital would hold a 35% stake. The US State Department would also have the right to purchase 20% of the oil produced at production cost.

Washington would have substantial influence over the company's governance. US citizens would be required to make up a majority of the board, while the US government would retain veto power over board appointments.

Controversy surrounding NABEP's owner

The involvement of NABEP has also attracted scrutiny because of its owner, Alejandro Betancourt.

Betancourt has been the subject of investigations involving alleged money laundering in Spain and Switzerland, although those investigations did not result in charges. He has also faced accusations concerning an alleged corruption scheme involving Venezuela’s state-owned oil company, PDVSA.

Despite those allegations, a US official described Betancourt as a "proven operator". The official acknowledged that American foreign policy can sometimes require Washington to work with individuals whose backgrounds are less than ideal.

"I'm not nominating anyone for sainthood here," the official said. "What I am telling you is that this is a person that, in the past, has been helpful to the United States government."

The comments underline the geopolitical calculations behind the arrangement as Washington seeks to increase its influence over Venezuela’s energy sector and encourage investment in a country whose oil infrastructure has suffered from years of underinvestment and decline.

Questions remain over how quickly production can recover

Despite the scale of the announced plans, analysts remain doubtful that Venezuela will be able to bring substantial new oil production online quickly.

Estimates for how long it could take for new barrels to reach international markets range widely, from roughly one year to as much as a decade. The uncertainty reflects the extensive investment required to restore and expand Venezuela’s oil infrastructure after years of deterioration.

The US administration has also said that Washington itself will not be providing the capital required for the new venture. Instead, American officials argue that political and governmental backing will be sufficient to encourage private investors to provide the necessary financing.

President Donald Trump indicated earlier this week that additional American oil companies would become involved in Venezuela.

"We have Exxon going in, we have Chevron going in. We have our big oil companies going in," Trump said on Monday.

Exxon, however, has indicated that its position has not changed. A company spokesman said Tuesday that "nothing has changed," following comments earlier this year from Exxon CEO Darren Woods, who described Venezuela as "uninvestable."

The apparent disagreement between Trump’s claims and Exxon’s stated position highlights the uncertainty surrounding the administration’s broader effort to bring major US energy companies back into Venezuela.

Fuel prices add urgency for Washington

For the Trump administration, the push to expand Venezuelan oil production comes as the US faces domestic pressure over fuel prices.

Trump met oil industry executives at the White House on Tuesday as gasoline prices rose following new US strikes against Iranian targets near the strategically important Strait of Hormuz.

After the meeting, Trump posted that "we are unleashing American Energy Dominance!"

The administration is particularly focused on reducing fuel costs ahead of November’s midterm elections. Republicans currently face the possibility of losing control of both the House of Representatives and the Senate.

Against that political backdrop, increasing global oil supplies, bringing Venezuelan production back online and attracting American energy companies to the country have become important elements of Washington’s broader energy strategy.

Chevron’s $7 billion commitment therefore represents more than a corporate expansion. It is also an early test of the US administration’s effort to reshape Venezuela’s oil industry, attract private capital into one of the world’s largest oil-producing countries and use American influence to secure greater control over Venezuelan energy resources.

By fLEXI tEAM