US’s Chevron, Italy’s Eni to expand oil projects in Venezuela

Chevron and several other global energy companies have signed multibillion-dollar deals to boost Venezuela’s oil output at a ceremony in Caracas, overseen by interim President Delcy Rodriguez and United States Energy Secretary Chris Wright.

The deals on Wednesday are separate from a recently unveiled Caracas-Washington agreement that gives the US access to ۱۷ Venezuelan oilfields, representing about a fifth of the country’s total reserves.

Most of the new contracts relate to project expansions that have been under negotiation with Venezuela’s Oil Ministry and ⁠state oil company PDVSA since a sweeping oil reform approved in January following the US’s abduction of former President Nicolas Maduro.

Wright, who had travelled to Caracas to oversee the signing ceremony, said the deals signed by Venezuela with the US’s Chevron and GE Vernova, as well as Italy’s Eni, were “critical in starting this ball rolling of peace, opportunity, and prosperity” in the country.

“We are trying to work at what I call Trump-speed. [US] President [Donald] Trump didn’t want a nudge or a slow drift in a positive direction,” Wright said. “He wanted to see as fast as possible transformation in Venezuela.”

The new contracts will see Chevron and Eni ramp up their operations in Venezuela while gaining greater stakes in the oil fields.

Chevron, the US’s second-largest oil company and the top private oil producer in Venezuela, has valued its deal to develop two additional oil fields in the Orinoco Belt at $۷bn, and the project’s output will more than double in five years.

Eni said it had gained exclusive rights to explore the giant Junin ۵ oilfield.

US energy company GE Vernova, an offshoot of General Electric, meanwhile, will help repair Venezuela’s battered electricity grid.

US ‘not stealing Venezuelan oil’

The ceremony took place amid growing questions about Venezuela’s sovereignty following the larger Caracas-Washington deal, which grants a US-led company ۱۰۰-year concessions over the ۱۷ oil fields in the country.

Critics in both the US and Venezuela accuse Trump of holding the country for ransom after abducting Maduro in a raid and warning that Rodriguez could face a similar fate if she does not fall into line with Washington’s demands.

But Wright insisted that the US was not “stealing Venezuelan oil”.

“All we’re doing is taking an idle, underground asset that isn’t doing anything for Venezuelan people, and bringing the money, the technology to develop it,” he told reporters on Wednesday.

Wright added that the total oil output in Venezuela, which holds the world’s largest proven oil reserves, will reach ۲ million barrels per day (bpd) by the end of the decade, up from ۱.۲۵ million bpd today.

That would still be far off Venezuela’s peak of more than ۳ million bpd in the late ۱۹۹۰s.

Rodriguez, meanwhile, denied she was surrendering her country’s riches, saying that cutting the US in on Venezuela’s oil wealth is necessary to secure investment in the oil sector.

More oil “translates into more jobs, higher wages, better public services, hospitals, schools and food”, she said.

Rodriguez has estimated that Venezuela will make $۲۰۹bn in profit from the deals over ۲۵ years.

The pivotal role in the deal, played by fraud-accused Venezuelan businessman Alejandro Betancourt, has come under scrutiny. He was not seen at Wednesday’s ceremony.

Betancourt has been linked to a corruption scandal at state oil company PDVSA and runs North American Blue Energy Partners (NABEP), Venezuela’s second-largest private oil company, in which the US government is taking a ۳۵ percent stake under the deal.

Wright on Wednesday defended NABEP’s “highly successful track record of producing large volumes of oil in Venezuela”, adding: “That’s a business partner you can believe in.”

The agreement is a major about-face for the “Chavismo” movement of late socialist firebrand Hugo Chavez, Maduro’s mentor, who nationalised Venezuela’s oil fields two decades ago on an anti-imperialist platform.

It has amplified fears that the Trump administration is entrenching former Maduro loyalists, like Rodriguez, who have shown no readiness to hold democratic elections eight months after Maduro’s overthrow.

Trump on Wednesday rebuffed calls from several Republican lawmakers for quick polls in Venezuela.

“I just don’t think they’re ready yet. You know, it’s very new. We took them out of a dictatorship, and we’re getting along great with the government,” he said.

Rodriguez took a similar line, saying there would be “an electoral process” when “Venezuela is ready”.