Chevron expands Venezuela operations under Trump's controversial oil deal

Chevron announced this week that it will deepen its foothold in Venezuela, committing more than $7 billion over the next five years to nearly double its daily oil production in the country's Orinoco Belt. The move comes after President Trump's administration brokered a sweeping agreement with Venezuela's government that includes a stake for the Pentagon in the profits. U.S. Energy Secretary Chris Wright attended a signing ceremony in Caracas on Wednesday alongside executives from Chevron, Italy's Eni, and other energy firms, framing the deal as a pathway to prosperity for Venezuelans and energy security for Americans.

Chevron is the only major U.S. oil company currently operating in Venezuela, a position it has held since 1923. The company said it has been assigned additional acreage in the Orinoco Belt and aims to reach production of roughly 600,000 barrels a day—more than double its current output. CEO Mike Wirth said in a statement that the expansion reflects confidence in Venezuela's resource potential. Venezuela sits atop the world's largest proven oil reserves, holding more than 303 billion barrels according to OPEC's 2025 data, far exceeding Saudi Arabia's 267 billion barrels. Yet the country's actual production capacity tells a different story: it pumps just over 1 million barrels daily, crippled by decaying infrastructure and international sanctions, while Saudi Arabia produces 10 to 11 million barrels a day and the U.S. produces nearly 14 million.

The Trump administration has moved aggressively to capitalize on Venezuela's reserves. The White House confirmed Monday that it is partnering with North American Blue Energy Partners, or NABEP, as part of the broader push into the Venezuelan oil sector. Wright defended the arrangement at the Caracas ceremony, saying the deals signed represent tens of billions in investment and thousands of jobs. Trump himself has repeatedly touted the move, saying in January that major U.S. oil companies—Exxon, Chevron, and others—were preparing to enter or return to the country. Yet other oil majors have shown little enthusiasm. Exxon Mobil's CEO called Venezuela "uninvestable" in January, and an Exxon spokesman said this week that nothing has changed.

The skepticism reflects hard history. Venezuela nationalized its oil industry in 1976, creating the state-owned Petróleos de Venezuela. A second nationalization came in 2007 when President Hugo Chávez forced foreign companies into state-controlled joint ventures or seized their assets outright. Exxon and ConocoPhillips refused and lost their holdings. Chevron accepted a joint venture arrangement and remained. That experience explains why other majors are wary of betting billions on a country with a track record of seizing foreign assets.

The current deal faces significant legal and political questions. Venezuela's constitution requires that arrangements of this scope be approved by the National Assembly. The ruling party-controlled assembly expressed support during a Tuesday session but held no debate and took no formal vote. Ian Vásquez, vice president for international studies at the Cato Institute, wrote that the agreement lacks legitimacy because it was negotiated with an unelected government that has held power through violence and what he described as probably the largest electoral fraud in Latin American history in 2024. He noted the deal was reached under overwhelming pressure from the United States, military and otherwise, and warned that any future Venezuelan democracy would likely challenge it, undermining confidence in the arrangement.

Wright pushed back on criticism Wednesday, calling the deal "a massive win" for both countries. He argued it would extract resources from underground and bring them to the surface through capital, technology, and investment, benefiting Venezuelans and supplying energy to Americans. Trump has promised the agreement would "substantially lower" gasoline prices in the U.S. Yet energy analysts have repeatedly cautioned that Venezuela's oil infrastructure is so degraded that reviving it will take years and tens of billions of dollars. Amy Jaffe, director of the Global Energy, Climate, and Sustainability Lab at New York University, said new facilities in the Orinoco region could take two to four years to come online, with other locations requiring even longer due to missing pipeline and support infrastructure.

The promise of lower gas prices appears distant. The national average price for a gallon of regular gasoline jumped overnight to $4.12 according to AAA, 93 cents higher than a year earlier. The gap between the administration's optimistic timeline and the technical reality of Venezuela's energy sector remains wide, and whether Chevron's $7 billion investment will ultimately deliver the promised benefits—or face the same political and legal obstacles that have plagued foreign oil ventures in Venezuela for decades—remains an open question.