Chevron and Others Plan to Invest Billions of Dollars in Venezuelan Oil Fields
en.Wedoany.com Reported - On August 28, people familiar with the negotiations said that U.S. energy companies such as Chevron and Halliburton are close to reaching oil field investment agreements with Venezuela, with the proposed investment scale reaching billions of dollars. Chevron may add two undeveloped heavy oil areas to its Venezuelan asset portfolio. These blocks have limited infrastructure and will require substantial development capital before production capacity can be established.
Two people close to the negotiations said Chevron is in talks with Venezuela's oil ministry and PDVSA to move its local joint ventures into a new energy contract framework. The proposed arrangement would expand Chevron's management authority over project operations, crude sales, and investment plans. The agreement is expected to be signed on September 2, and other foreign energy companies operating in Venezuela may also complete contract conversions on the same day.
The negotiations include extending the scope of the Petropiar heavy oil project into the Ayacucho 8 block in the Orinoco Heavy Oil Belt and expanding another smaller project in the same belt. Chevron is also discussing adding an additional oil development area with the Venezuelan side, though the specific block, equity stake, investment amount, and production start date have not yet been determined.
In April of this year, Chevron completed a heavy oil asset swap with PDVSA. Chevron's stake in the Petroindependencia joint venture increased by 13.21 percentage points to 49%, and Petropiar, in which Chevron holds a 30% stake, obtained development rights to the adjacent Ayacucho 8 block. Chevron transferred to the Venezuelan side 60% and 100% operating interests in the Plataforma Deltana 2 and 3 offshore natural gas blocks and exited the Petroindependiente joint venture, in which it held a 25.2% stake.
Chevron currently retains three joint ventures in Venezuela—Petroboscán, Petropiar, and Petroindependencia—with stakes of 39.2%, 30%, and 49%, respectively. Both Petropiar and Petroindependencia are located in the Orinoco Heavy Oil Belt and produce extra-heavy crude. The combined crude output of the three projects in April of this year was approximately 260,000 barrels per day, and Chevron has proposed increasing its Venezuelan production by about 50% within two years.
Halliburton is separately negotiating to provide oil field equipment and technical services to Venezuelan oil producers. U.S. Energy Secretary Chris Wright and a delegation of energy company executives are expected to travel to Caracas next week to continue handling agreement signings and project investment arrangements.
The U.S. Treasury Department updated its general licenses related to Venezuela on August 27, with License 48C covering the supply of equipment and services to Venezuela and License 50C covering listed companies' oil and gas operations in the country. License 49A, issued on March 13, authorized U.S. companies to negotiate and sign contracts with conditions precedent regarding investments in Venezuela.
