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Chevron Is Betting Billions On Venezuela—Brilliant Or A Huge Mistake?

Chevron is preparing to make one of the oil industry’s most intriguing geopolitical bets. The company is reportedly nearing an agreement that could add two Venezuelan heavy-oil fields to its existing portfolio, potentially requiring billions of dollars of investment to restore infrastructure and increase production. The opportunity is enormous: Venezuela possesses some of the world’s largest proven oil reserves, while the U.S. is pushing for greater production and more heavy crude supplies for American refineries. Yet the risks are equally difficult to ignore. ExxonMobil and ConocoPhillips remain cautious after their Venezuelan assets were nationalized in 2007, while many new fields still lack basic infrastructure and reliable electricity. Chevron, however, enters this situation differently. It already operates three joint ventures in the country, has dramatically increased their production, and says additional opportunities are progressing.