Chevron to expand Venezuela operations under Trump's oil deal with Pentagon stake

Chevron announced Wednesday that it will significantly expand its operations in Venezuela, committing more than $7 billion over the next five years to nearly double its current production in the country's Orinoco Belt. The expansion comes after President Trump announced a sweeping deal to develop Venezuela's vast oil reserves, with an unusual arrangement that gives the Pentagon a financial stake in the profits. Chevron, the only major US oil company currently operating in Venezuela, has been assigned additional acreage and aims to reach production of roughly 600,000 barrels per day.

The scale of Venezuela's resource base is staggering. The country holds the world's largest proven crude reserves at more than 303 billion barrels—far exceeding Saudi Arabia's 267 billion barrels. Yet this abundance masks a profound paradox. Venezuela's daily output sits just above one million barrels, a fraction of what Saudi Arabia produces at 10 to 11 million barrels daily, and less than a tenth of US production at nearly 14 million barrels per day. The gap exists because Venezuela's energy infrastructure has deteriorated severely over decades, and the country remains under international sanctions that have crippled its ability to develop and export oil.

Chevron's century-long presence in Venezuela—dating to 1923—gives it institutional knowledge and existing infrastructure that other US oil companies lack. CEO Mike Wirth framed the expansion as confidence in Venezuela's resource potential, noting the company's deep historical roots. The Trump administration has partnered with North American Blue Energy Partners as part of its broader push to reopen Venezuela's oil sector to American business. Energy Secretary Chris Wright characterized the effort as restoring confidence among private companies to negotiate directly with Venezuela's government.

But the deal faces substantial skepticism from multiple quarters. Energy experts warn that reviving Venezuela's oil industry will require years of intensive work and tens of billions in capital investment. Amy Jaffe, director of the Global Energy, Climate, and Sustainability Lab at New York University, estimated that new production facilities in the Orinoco region could take two to four years to become operational, with other areas requiring even longer due to missing pipeline and support infrastructure. The timeline is not merely technical—it reflects the depth of Venezuela's industrial decay.

Legitimacy questions loom larger still. Venezuela's constitution requires that arrangements of this magnitude receive approval from the National Assembly, a step that has not occurred. The deal grants Chevron 100-year rights over 17 oil fields holding an estimated 65 billion barrels of reserves—an extraordinary commitment made with Venezuela's acting president, Delcy Rodríguez, whose authority to make such commitments is contested. Ian Vásquez, vice president for international studies at the Cato Institute, argued that the agreement lacks legitimacy because it was negotiated with what he characterized as a dictatorship that has maintained power through violence and what he described as possibly the largest electoral fraud in Latin American history in 2024. He warned that any future Venezuelan democracy would likely challenge the deal, potentially undermining the entire arrangement.

Trump has been explicit about his ambitions for Venezuela's oil since the capture of Nicolás Maduro. In January, he stated that Exxon and Chevron were entering Venezuela, and he suggested other major US oil companies were preparing to follow. Yet Exxon Mobil CEO Darren Woods called Venezuela uninvestable in January, and an Exxon spokesman said this week that nothing has changed. The hesitation reflects hard lessons from history. Venezuela nationalized its oil industry in 1976, creating the state-owned Petróleos de Venezuela S.A. A second nationalization in 2007 under Hugo Chávez forced foreign companies into state-controlled joint ventures or seized their assets entirely. Chevron accepted the joint venture terms; Exxon and ConocoPhillips refused and lost their holdings.

Trump has claimed the Venezuela deal will substantially lower US gasoline prices, a promise that rests on assumptions about both the speed of production increases and global oil markets. Analysts have been cautious about such projections, emphasizing instead the formidable infrastructure challenges ahead. The question now is whether Chevron's $7 billion commitment and the Trump administration's diplomatic pressure can overcome decades of decay and political uncertainty—or whether Venezuela's oil will remain, as it has for years, largely trapped beneath the ground.