Texas-based Chevron, the second-largest US oil company, confirmed this week it will expand operations in Venezuela with a $7 billion investment over five years, aiming to more than double its production to 600,000 barrels per day. The deal, brokered under the Trump administration’s broader push to tap Venezuelan oil reserves, has significant implications for Texas’s energy sector.
Chevron, headquartered in Houston, has operated in Venezuela since 1923 and is the only US oil company with a major presence there. The expansion includes additional acreage in the Orinoco Belt, where Chevron already has active operations. CEO Mike Wirth said the move reflects ‘confidence in the country’s deep resource potential.’
For Texas oil workers and service companies, the Venezuela deal represents both opportunity and risk. Texas-based oilfield service providers could see increased demand for their expertise, particularly in restoring Venezuela’s degraded energy infrastructure. However, the deal also raises questions about whether increased Venezuelan production could eventually put downward pressure on oil prices, affecting the economics of Texas shale plays.
Venezuela holds the world’s largest proven oil reserves at over 303 billion barrels, but its daily production is just over one million barrels due to years of sanctions, nationalization, and infrastructure neglect. By comparison, the US produces nearly 14 million barrels per day, with Texas contributing roughly five million.
The agreement has drawn skepticism from energy experts. Amy Jaffe of NYU estimated it could take 2 to 4 years to bring new greenfield facilities online. Exxon Mobil CEO Darren Woods called Venezuela ‘uninvestable’ in January, and an Exxon spokesman confirmed this week that ‘nothing has changed.’
Legal questions also loom. Venezuela’s constitution requires National Assembly approval for such arrangements, which has not occurred. Ian Vásquez of the Cato Institute warned that any future Venezuelan democracy may question the deal, undermining confidence.
The deal comes as gasoline prices remain elevated, with the national average at $4.12 per gallon, up 93 cents from last year, according to AAA. Trump has said the agreement would ‘substantially lower’ gas prices, though analysts caution that Venezuela’s dilapidated infrastructure will require years of restoration.
Source: NY Post
