Will Chevron increase its capital spending in Venezuela?

No, Chevron will not increase its capital spending this year to fast-track expansion in Venezuela, focusing instead on boosting production from existing operations.

What is Chevron's production growth target in Venezuela?

Chevron aims to grow its current production of 250,000 barrels a day by up to 50 percent within the next 18 to 24 months.

Why are U.S. oil companies hesitant to invest in Venezuela?

U.S. oil companies require strong financial, legal, and security guarantees due to Venezuela's history of political instability and asset expropriation.

Home / Business and Economy / Chevron Cautious on Venezuela Oil Amidst US Push

Chevron Cautious on Venezuela Oil Amidst US Push

30 Jan

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Summary

Chevron will not increase capital spending for Venezuela expansion.
The company aims to boost existing production by 50% within 18-24 months.
Chevron is the only US oil company with current operations in Venezuela.

Chevron Cautious on Venezuela Oil Amidst US Push

Chevron is proceeding with caution regarding potential investments in Venezuela's oil sector, despite encouragement from the U.S. government. The company's chief financial officer stated that while there is optimism for growth, capital spending will remain unchanged for the current year. The immediate focus is on enhancing production from existing operations.

Chevron aims to increase its daily output by 50%, potentially reaching 375,000 barrels per day within 18 to 24 months. This expansion is dependent on securing additional U.S. government authorizations. The company, which is the only U.S. oil firm currently operating in Venezuela through a joint venture with PDVSA, reported fourth-quarter earnings that exceeded expectations, though year-over-year earnings per share decreased due to lower oil prices.

Analysts suggest Venezuela could present a competitive opportunity for Chevron, provided favorable terms are available. However, the U.S. oil industry has expressed a need for robust financial, legal, and security guarantees before committing capital. Other U.S. oil majors, such as ExxonMobil, have deemed Venezuela "uninvestable" due to political instability and a history of asset expropriation.