Chevron expands Venezuelan operations as Exxon remains cautious

Woods, who previously deemed Venezuela “uninvestible” in January, reiterated his concerns during a recent earnings call, advising investors to view reports of Exxon’s potential involvement with a “little pinch of salt.” While he acknowledged Exxon “ultimately will have a role,” he stressed the importance of a methodical and thorough evaluation process.

Chevron’s strategy differs significantly from Exxon’s past experiences in Venezuela, where assets have been nationalized twice, most recently in 2007. Chevron has maintained its presence and currently holds the position of top private producer in the country, working with the Maduro regime.

“It’s going to require some substantial changes to the way things have historically been done in Venezuela,” Woods stated. “We’re going to make sure that before we commit that those are in place, and we have confidence that we have a viable project that’s sustainable and will generate the returns required to compete in our portfolio.”

Beyond Chevron, other companies are also exploring opportunities. Continental Resources, founded by Harold Hamm, signed a memorandum of understanding with PDVSA to develop an area in the Orinoco Belt. The Trump administration has also announced an agreement to control over 65 billion barrels of Venezuelan oil reserves through North American Blue Energy Partners (NABEP), with the U.S. Department of Defense holding a 35% stake.

Venezuela’s overall oil production has increased from below 1 million barrels per day to over 1.2 million barrels in October, though the country’s output remains far below its peak of nearly 4 million barrels daily decades ago. Chevron CEO Mike Wirth highlighted the company’s advantage as the “only incumbent on the ground,” citing its understanding of the region’s geology and infrastructure. He described the investment as “self-funding” and adaptable to market conditions.

New contractual terms include provisions for political stability and international arbitration, and Chevron will control the flow of its oil production and royalty payments. Wirth emphasized that fostering support within Venezuela is key to managing risks and ensuring long-term success.