Chevron Could Boost its Venezuelan Production by 50% This Year

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Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The last U.S. major operating in Venezuela said this week that its production is recovering and could experience further increases with low investments.

During its quarterly call, Chevron Corporation (NYSE:CVX) (San Ramon, California) Chief Executive Officer Mike Wirth said that the company's oil production in Venezuela is averaging about 100,000 barrels of oil per day (BBL/d), double the amount it had in November when the United States issued a license allowing Chevron to return to normal operations in the South American nation.

Additionally, Wirth reported that the company's oil output in the country could increase by another 50% this year.

The U.S. license granted to Chevron allows it to export its production to the U.S., where companies can access Venezuelan heavy crude. In January, the U.S. saw its first imports of Venezuelan oil since July 2019, when U.S. refiners received the last shipment of crude from the South American nation following the sanctions imposed in January of that year.

During the first quarter, Chevron has exported 8.7 million barrels of Venezuelan crude to U.S. refiners, a trend that is expected to continue as Chevron maintains operations in the South American country.

Despite the higher production, Wirth highlighted that a major boost in exports could take time: "it's limited by our position there and the entities that we're involved in and what our portion of that production that we're entitled to market is."

Meanwhile, the U.S. government announced last month that it is not considering further sanctions relief unless it saw concrete steps by the government of Nicolas Maduro in negotiations with the Venezuelan opposition ahead of next year's presidential elections.

Besides Chevron's license in November, the U.S. government eased sanctions on crude imports from Repsol S.A. (Madrid, Spain) and Eni SpA (Rome, Italy), which also have operations in the South American nation. Moreover, the U.S. treasury has also allowed Trinidad and Tobago to develop the offshore Dragon gas field in Venezuelan waters.

For Chevron, however, the outlook seems positive, though uncertain: "we'll see how things unfold and hopefully pointed in a good direction, but it's been a bit of an up and down situation, and we have to we just have to take this one step at a time," concluded Wirth on the company's situation in Venezuela.

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