After Trump announces Venezuela oil agreement, Chevron (CVX.US) and Eni (E.US) lead tens of billions of dollars in production increase deals

According to news from Zhitong Finance APP, executives from Chevron (CVX.US), GE Vernova (GEV.US), and Eni Group (E.US) jointly announced a series of energy agreements aimed at increasing crude oil production in Venezuela, together with U.S. Secretary of Energy Chris Wright and Venezuelan Acting President Delcy Rodriguez.

On Wednesday, these agreements were announced during a signing ceremony in Caracas. At the ceremony, Wright stated that these deals represent “tens of billions of dollars” in investments, marking a “transformation of Venezuela.” Rodriguez commented that these historic actions will soon promote economic growth, while thanking U.S. President Trump and his administration for their efforts in reaching a “win-win” agreement.

These transactions represent the largest capital investment in Venezuela by energy corporations since U.S. Special Forces captured the country's former leader, Nicolas Maduro, in January of this year. Just nine months after Maduro stepped down, the Trump administration has made significant progress toward its goal of substantially increasing American crude oil production.

Venezuela possesses the world’s largest fossil fuel reserves, but years of mismanagement, corruption, and sanctions have resulted in the decline of its fossil fuel industry.

Last week, President Trump announced a plan to take control of a majority share in Venezuela’s vast oil wealth, an unprecedented move. Officials said this would create the world's second-largest private oil company by reserves. However, the plan has faced heavy criticism; detractors argue that Venezuela risks becoming a modern resource colony, akin to the so-called “banana republics” from a century ago, potentially creating long-term risks for oil companies operating in Venezuela.

The U.S. government has reached a deal with Venezuelan entrepreneur Alejandro Betancourt to acquire a 35% stake in his company, North American Blue Energy Partners (NABEP). NABEP is a private company holding a 100-year concession for 17 oil fields in Venezuela. Betancourt is a controversial figure in Venezuela, but the Trump administration has defended its decision to partner with the investor.

This U.S. action comes only months after Trump proposed his so-called “Donroe Doctrine”, the 21st-century version of the Monroe Doctrine, which aims to warn European powers against interfering in Western Hemisphere affairs. These developments have prompted analysts and scholars to recall the early era of neo-colonialism, when the U.S. exerted excessive influence over Latin America and its natural resources.

Wright stated at the ceremony: “We have a strong interest in expanding energy production in the Americas. This is our turf.”

Chevron plans to invest $7 billion through its joint ventures over the next five years to more than double Venezuela’s crude oil output, marking the largest single investment yet under U.S. government-led efforts to boost Venezuelan oil production. Chevron said in a statement on Wednesday that it has obtained the rights to develop two giant oil fields in the Carabobo area of the Orinoco Oil Belt. These are Carabobo 1 and Carabobo-2-South-A, which are adjacent to Petroindependencia, a joint venture in which Chevron owns a 49% stake.

CEO Mike Wirth said in an interview, “We are establishing a very strong position in one of the most geologically favorable areas in Venezuela. There are billions of barrels of oil resources here.”

Wirth declined to comment on the U.S. investment in NABEP, but he expressed appreciation for the Trump administration’s commitment to seeking “commercial solutions” that benefit both countries. “The U.S. government has recognized that Venezuela’s energy resources can serve as an engine for both U.S. energy security and Venezuela’s economic recovery.”

He stated that Chevron has included “important safeguards” in the agreement to protect its investment, but refused to disclose contract details. He also indicated that the company expects to put some Venezuelan oil reserves back on its books after having written them off several years ago.

Claudio Descalzi, CEO of Italy’s Eni Group, announced at a ceremony in Caracas’ presidential palace that, Eni will launch drilling operations on Thursday in Block Junin 5. Descalzi said the Junin 5 block contains over 35 trillion cubic feet of natural gas and holds “tremendous potential.” Eni stated that its 25-year contract makes it the exclusive operator of the Junin 5 Block. Eni plans to announce its development plan for the block in October.

According to details released at the ceremony, GE Vernova has committed to forming a strategic alliance with Venezuela’s national oil company PDVSA to restore and strengthen the power and energy infrastructure. The Venezuelan national power company Corpoelec also signed an agreement with GE Vernova. According to the U.S. Department of Energy, GE Vernova plans to add 1 GW of generating capacity in the next 24 months and an additional 5 GW within four years. 1 GW is equivalent to the generating capacity of a typical nuclear reactor.

In an interview in Caracas, Wright said efforts are also underway to reorganize Venezuela’s debt. “Venezuela is burdened with heavy historical debt. The development of these oil fields will benefit the people of Venezuela, the United States, and the global energy market,” he said in the interview.

In a separate interview in Caracas, Wirth said that the increase in Venezuelan supply will have a “gradual” impact on the market and cannot quickly alleviate disruptions in shipping through the Strait of Hormuz. “These projects have different development cycles, and investments in Venezuela take years,” he said.

So far, smaller private companies have dominated U.S.-Venezuela oil deal negotiations. Progress has been slow, and compared to Chevron, these entities lack the financial muscle needed to purchase large-scale drilling and production equipment to boost output.

Chevron expects to reach a daily oil output of about 600,000 barrels in Venezuela by 2031, more than double its current production. The company announced in a press release that Venezuela’s abundant oil resources will last “for decades,” with total costs expected to be under $20 per barrel.

Brent crude oil was priced at around $95 per barrel on Wednesday, implying a significant profit margin. Chevron typically exports its Venezuelan crude to refineries on the U.S. Gulf Coast, where it is processed into products such as gasoline, diesel, and jet fuel.

Chevron’s plan to provide an additional 300,000 barrels per day over the next five years will increase Venezuela’s crude output by nearly 30% to about 1.1 million barrels per day. Still, without further investments, Venezuela’s daily oil production will remain far below the nearly 3.5 million barrels per day seen in the late 1990s, before former President Hugo Chávez nationalized the oil sector.

Rival companies ExxonMobil (XOM.US) and ConocoPhillips (COP.US) exited Venezuela after their assets were nationalized in the mid-2000s. However, Chevron chose to remain, negotiating agreements that allowed it to continue production. This unusual arrangement has drawn criticism in both the United States and Venezuela.

U.S. critics accuse the company of channeling funds to a corrupt regime, while some in Venezuela see it as a lasting symbol of American imperialism. Over the past decade, the fluctuating imposition and lifting of U.S. sanctions severely limited Chevron’s activities, restricting its operations mainly to maintaining equipment and pursuing debts owed by its partner, Venezuela’s national oil company PDVSA.

Chevron maintains its presence in Venezuela has contributed to economic stability, providing U.S. dollars during periods of hyperinflation and turmoil, while keeping oil flowing to the global market. Earlier this year, after the Trump administration toppled the Maduro regime, Chevron found itself in a favorable position.

Wirth said this deal is a result of Chevron’s strong existing operations in the country. “This is thanks to the dedication and commitment of our talented employees, who overcame years of uncertainty and anxiety.”