Chevron has commited $7 billion in Venezuela to double production at low cost.
This comes just days after the Trump administration’s historic oil deal in Venezuela.
Oil major Chevron (NYSE:CVX) plans to invest more than $7 billion in Venezuela through 2031 to double its oil production in the country to nearly 600,000 barrels per day.
This is a massive development as it aligns straight with President Donald Trump’s big push in the region. Chevron is the only oil major with an active presence in Venezuela and has been operating in the country since 1923.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Here’s what that means for Chevron investors.
Image source: Getty Images.
Despite sitting on the planet’s richest proven crude deposits, Venezuela produced a mere 1.01 million barrels of oil per day in 2025. That’s almost one-third of the oil it pumped a couple of decades ago. The industry collapsed because of chronic political mismanagement, U.S. sanctions, and underinvestment.
President Donald Trump wants to revive Venezuela’s oil industry to replenish America’s dwindling oil reserves amid the ongoing turmoil in the Middle East and to build a crude-oil heavyweight in the Western Hemisphere.
On Aug. 31, the Trump administration announced a landmark oil agreement with Venezuela. The country granted privately held North American Blue Energy Partners (NABEP) 100-year rights to develop 17 oil fields with an estimated 65 billion barrels of reserves. The Pentagon gets a 35% stake in NABEP, and the State Department rights to buy 20% of the oil output at cost.
Two days later, Chevron announced its expansion plans in Venezuela, focusing on the crude-rich Orinoco Belt, which holds most of Venezuela’s extra-heavy crude oil reserves. The oil giant has been granted additional development acreage (Carabobo 1 and Carabobo-2-South-A).
While Chevron plans to double production, it expects to do it at production costs averaging only $20 per barrel.
While doubling Venezuelan output provides a substantial volume boost, the bigger takeaway is cost efficiency. Extraction costs of $20 per barrel should allow Chevron to lock in healthy margins even in low-price environments.
This low-cost expansion strengthens a production portfolio already anchored by high-margin growth in the Permian Basin, offshore Guyana, and the Bakken, especially after last year’s $53 billion acquisition of Hess.
With Hess, Chevron expects to grow earnings per share and adjusted free cash flows at compound annual growth rates above 10% each through 2030. It also expects to buy back 3% to 6% outstanding shares annually while raising dividends every year.
Crucially, the $7 billion Venezuelan commitment breaks down to roughly $1.4 billion annually over five years, which is less than 10% of Chevron’s $18 billion to $21 billion annual capital expenditure budget.
The road ahead will not be easy, though.
The ramp-up won’t happen overnight, as Venezuela’s energy infrastructure will require extensive repairs and modernization. Meanwhile, operations in Venezuela remain constantly exposed to political changes, and potential shifts in diplomatic relations and regulatory frameworks.
Still, the move reinforces Chevron’s dominance in South American oil. If things pan out as planned, Chevron can unlock a powerful catalyst for long-term cash flow by securing low-cost production without overextending capital expenditure. That should be a win-win for the company and its shareholders.
Before you buy stock in Chevron, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $435,803!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,334,577!*
Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 211% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 2, 2026.
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
