California-based oil company Chevron is planning to boost its oil production in Venezuela by adding at least two new oil rigs in the country, Reuters reported Monday.
The proposed rigs would reportedly add some 65,000 barrels per day (bdp) as part of the company’s goals of increasing its Venezuelan oil output to 200,000 bdp by the end of 2024.
The plan marks Chevron’s first major drilling campaign in Venezuela since the Biden administration eased oil sanctions on the socialist regime of dictator Nicolás Maduro in November. The Biden administration granted the first license issued to import Venezuelan oil into American markets to Chevron.
The new oil rigs that Chevron’s plans reportedly call for would help Venezuela recover its lost crude oil production output, left in near ruins after two decades of socialism. It would also expedite Chevron’s recovery of $3 billion in unpaid dividends and debts from its Venezuelan ventures.
The Biden administration’s license to Chevron has allowed Venezuela to boost its oil production and shipments throughout 2023.
Reuters’ report, which cites three anonymous sources familiar with the matter, stated that Chevron’s joint ventures with Venezuela’s state-owned Petróleos de Venezuela (PDVSA) oil company now produce some 135,000 bpd and have exported an average of 124,000 bpd to the United States in 2023.
According to independent estimates and shipping data reviewed by Reuters, Venezuela has now neared the oil output levels it had before 2019, when the administration of former President Donald Trump sanctioned PDVSA to punish the Maduro regime for years of human rights atrocities committed against its own people, banning the United States from buying Venezuelan oil.
Chevron’s plans, according to Reuters, would initially see the installation of equipment on the Petroindependencia project located in Venezuela’s main oil production region, the Orinoco Belt. Chevron also plans two additional joint ventures, one in the Belt’s Petropiar project and another in Petroboscan located near Lake Maracaibo — a lake that has been left severely contaminated due to constant oil spills caused by socialist mismanagement.
One of the sources told Reuters that the idea is to “drill two wells per month at the Orinoco [Belt].”
Reuters’ report continues by stating that Chevron’s aims of reaching 200,000 bpd by the end of 2024 could help Venezuela output 1 million bdp, an amount higher than 2023’s current average of 785,000 bpd but still short from the 2 million that socialist dictator Nicolás Maduro promised in 2022.
In 1998, before the election of late socialist dictator Hugo Chávez and the Bolivarian Revolution’s rise to power, Venezuela was able to output an average of 3.5 million bpd.
Chevron told Reuters that it “continues to conduct business in compliance with laws and regulations, as well as the sanctions framework provided by the U.S. Office of Foreign Assets Control (OFAC).”
Chevron’s drilling plans, according to the report, would not require the United States to issue new licenses or approvals, as the areas involved by the proposal are already included in the license granted by the Biden administration in November.
The sources, however, told Reuters that the plans call for an oilfield supplier able to provide Chevron with 1,000-1,5000 horsepower rigs, which, given Venezuela’s current environment, is a difficult task, as the current licenses granted to U.S. oil service providers in Venezuela only allows them to keep existing assets and employees in the country, and require authorization to import new equipment or to take contracts with PDVSA or its joint ventures.
As a result, Reuters explained, Chevron either must “hire local contractors, whose access to modern equipment is limited, or await a modification to the U.S. oilfield firms’ licenses.”
Another source told Reuters that Chevron’s experience in this project is expected to serve as a benchmark for other foreign oil companies in joint ventures with PDVSA that have begun early planning for possible drilling campaigns.
The Biden administration has been reportedly holding negotiations with the Maduro regime throughout 2023, offering a temporary lifting of oil sanctions in exchange for “free and fair” presidential elections in 2024.
Maduro, however, has repeatedly insisted that there will be no “free and fair” elections in Venezuela unless all sanctions imposed on the rogue socialist regime and its officials are lifted. The Maduro regime has dubbed this demand as “sanctions-free fair elections.”
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.
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