Chevron Corporation is seeking clearer and more competitive fiscal terms in Venezuela as it looks to expand oil production. This push comes as Guyana, its eastern neighbor, continues to see rapid offshore development at the Stabroek Block under stable contractual conditions.
Chevron’s Chief Executive Officer Mike Wirth made the remarks about the Venezuela framework on March 23 at the CERAWeek by S&P Global conference in Houston, according to Reuters.
“There’s still things that need to happen to encourage investment at the scale that people would like to see,” Wirth stated. He pointed to gaps in the country’s updated oil law.
Chevron to build on momentum in post-Maduro Venezuela, as Trump promises windfall | OilNOW
“At one end of the range we have investments that look attractive. At another of the range, you have investments that probably wouldn’t. So there’s discretion and some ambiguity or uncertainty that still exists in the law that I think you can tighten up,” Wirth explained.
Reuters reported that Chevron is producing about 250,000 barrels per day in Venezuela through joint ventures with PDVSA, accounting for roughly a quarter of the country’s output. The company has indicated it can grow production further if conditions improve .
“There is significant potential in our assets and in the country. We’re optimistic the future holds a more competitive and robust pathway to deliver value to Venezuela, the United States and Chevron,” Wirth stated during a recent earnings call.
In contrast, Guyana’s offshore developments have advanced under attractive, clearly defined fiscal terms in the Stabroek Block, operated by ExxonMobil, with co-venturers Hess and CNOOC.
The Stabroek Block Production Sharing Agreement includes a 2% royalty and a 75% annual cost recovery ceiling, with the remaining profit oil split equally between the government and contractors. The agreement provides defined fiscal terms and cost recovery rules, which have supported multiple project approvals since first oil in 2019.
Guyana has since introduced updated terms for new blocks, including a 10% royalty and a 65% cost recovery ceiling.
Chevron gained exposure to Guyana’s offshore sector through its acquisition of Hess, which holds a 30% stake in the Stabroek Block.
