Chevron Bolstering Venezuelan Oil Output Amid Sanction Challenges: Report

Chevron Corp CVX has reportedly set an ambitious agenda to escalate its Venezuelan oil output by 65,000 barrels per day (bpd) by the end of 2024.

The effort could aid Venezuela in lifting crude production and speed Chevron's plan of recouping $3 billion in unpaid dividends and debt from its projects in the country, according to a report from Reuters.

The report further noted Chevron's joint ventures with Venezuelan state oil company PDVSA now produce some 135,000 bpd and have exported an average 124,000 bpd to the U.S. this year, according to independent estimates and shipping data, near levels they had before U.S. imposed sanctions in 2019.

The current metrics reflect a significant 70% upswing compared to the average output in 2022. Chevron's amplified input in the nation's crude production plays a pivotal role, particularly as Venezuela, an OPEC member, is striving to revert to its prolific output levels before the sanctions.

The cumulative increment in Venezuela's oil yield, pegged at 70,000 bpd for the current year, predominantly stems from Chevron-PDVSA initiatives. 

Chevron's production target of achieving 200,000 bpd by the end of next year could go far to helping Venezuela achieve its aim to surpass 1 million bpd, from an average of 785,000 bpd so far in 2023, the report added.

The game plan devised by the California-headquartered firm entails including a minimum of two drilling rigs. Initial setup is projected at the Petroindependencia venture in the Orinoco Belt – Venezuela's oil extraction hotspot.

Subsequent deployments are slated for the Petropiar and Petroboscan endeavors. The objective is to inaugurate two drilling operations monthly at the Orinoco.

However, the pressing challenge is procuring an oilfield supplier capable of delivering rigs in the 1,000-1,500 horsepower range, especially considering the prevailing Venezuelan scenario.

U.S. oil entities operating in Venezuela grapple with stringent U.S. permits, permitting only the sustenance of current assets and workforce.

Also Read: Chevron Faces Impasse In LNG Strike Talks With Unions In Western Australia - What's Next?

Price Action: CVX shares are trading higher by 1.32% at $168.48 on the last check Monday.

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.