Chevron has announced plans to invest over $7 billion in its Venezuela joint ventures to boost oil production to around 600,000 barrels per day within the next five years. The expansion will take place in the Carabobo region of Venezuela’s Orinoco Belt as part of new agreements with the Petroindependencia joint venture.

Chevron’s CEO, Mike Wirth, expressed confidence in Venezuela’s resource potential and its competitiveness for long-term investments. This initiative is separate from a recent deal involving a fifth of Venezuela’s oil reserves, where the U.S. government acquired an equity stake in a private oil company operating in the region.

Venezuela, home to the world’s largest oil reserves, currently produces only about 1.25 million barrels per day, a significant decline from its peak production levels two decades ago. The country aims to increase its output to two million barrels per day by the end of the decade.

Chevron’s new agreements in Venezuela come with favorable fiscal and legal terms to ensure sustainable investments with total production costs anticipated to be below $20 per barrel. The company plans to leverage existing infrastructure and facilities for the expansion.

In addition to Chevron, other companies such as ENI, KEO Capital, and Primavera are expected to sign energy agreements in Venezuela soon. These agreements are part of a broader shift in the country’s energy sector following a comprehensive oil reform earlier this year.

The U.S. has been actively encouraging energy investments in Venezuela, particularly after the change in government earlier this year. Chevron’s long-standing presence in Venezuela contrasts with other oil companies that exited the country when assets were nationalized in the past.

Chevron’s expansion in Venezuela is a strategic move amid evolving dynamics in the energy sector. The country’s partnership with North American Blue Energy Partners for developing significant oil reserves indicates a shifting landscape in the industry, according to energy experts.