Chevron Pours $7 Billion into Venezuela Amid Improved Economics and Stronger Protections
Chevron CEO Mike Wirth highlighted two key factors behind the $7 billion-plus investment in Venezuela. Better economics and stronger legal protections are the main reasons for the planned expansion of Chevron's operations in the country.
Wirth emphasized that earlier it was 'very difficult to get a competitive return on investments' in Venezuela, but under new agreements, Chevron expects total costs of less than $20 per barrel. The company has also received additional acreage in the 50,000-square-km Orinoco Belt.
The second issue Wirth addressed was protecting Chevron's investment. In 2007, Exxon Mobil and ConocoPhillips left Venezuela after their projects were nationalized, but Wirth stated that 'there are very strong legal protections in Venezuela and beyond that are part of this deal' that give Chevron the confidence to make the investment.