Chevron is in advanced talks to significantly expand its operations in Venezuela, and a deal could be announced as early as next week, according to people familiar with the negotiations between the oil company and Venezuelan officials.
Any new investment by Chevron, the second-largest U.S. oil company and the only one with a major presence in Venezuela, would bolster the country’s efforts to revitalize its ailing oil industry and struggling economy.
Such a deal would also be a significant win for the Trump administration, which has been pushing American companies to play a bigger role in Venezuela’s energy industry after U.S. forces seized the country’s leader, Nicolás Maduro, in January.
Chevron’s negotiations over new investments in Venezuela were reported earlier by The Wall Street Journal.
Several other U.S. oil companies have also been pursuing opportunities in the South American country, though much of what has come to fruition so far this year has been preliminary or relatively small.
Talks could still fall apart. But Chevron’s effort to beef up its presence in Venezuela builds on a wager the company made two decades ago to remain in that country after its government changed the terms under which foreign oil companies could operate. Several other U.S. oil companies, including Exxon Mobil and ConocoPhillips, refused to agree to the new terms and left Venezuela.
While much of Venezuela’s oil industry fell into disarray because of corruption, mismanagement and U.S. sanctions, Chevron’s operations emerged as a beacon of stability in the country, and now account for roughly a quarter of Venezuela’s production.
The negotiations point to the major shift underway in the energy landscape of Venezuela, which has some of the world’s largest oil reserves. Maintaining domestic control over its natural resources has shaped the country’s politics for decades, and many Venezuelans view oil as a birthright and a cornerstone of national identity.
But the Trump administration has also made Venezuela’s oil central to its campaign to assert U.S. energy dominance across the Western Hemisphere, where rising production has helped blunt the loss of oil coming out of the Middle East over the past six months because of the Iran war.
Previous U.S. leaders often shied away from any suggestion that gaining control of another country’s natural resources was a primary objective of U.S. military and foreign policy, wary of the international backlash. But President Trump and some of his top advisers have made it clear that oil is an important part of their foray into Venezuela.
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Even before removing Mr. Maduro from power, U.S. officials bluntly claimed that the United States had created Venezuela’s oil industry and that the country’s government had effectively stolen American oil fields through nationalizations.
Under U.S. pressure just weeks after the capture of Mr. Maduro, Venezuela’s National Assembly approved an overhaul of legislation governing its oil industry, granting foreign oil companies greater control over their operations in the country. This move reversed much of Venezuela’s nationalization of oil projects in 2007 and opened the way for Chevron to expand its foothold.
The nationalization had been a pillar of Chavismo, the political movement created by Hugo Chávez, Mr. Maduro’s predecessor, which wielded control over Venezuela until this year.
Mr. Maduro’s successor, Delcy Rodríguez, facing U.S. threats that she could meet a similar fate, has been much more open to working with the U.S. government and frequently talks to and meets with top Trump administration officials.
That said, negotiations between some U.S. oil companies and Venezuela’s state oil company have advanced slowly.
Bryan Sheffield, managing partner of Formentera Partners, a small oil producer based in Austin, Texas, said that as attractive as Venezuela’s resources were, he was losing interest because his company was struggling to get the attention of officials in Caracas.
“I just can’t get momentum with them,” said Mr. Sheffield, whose team has visited Venezuela several times in recent months. “What we’re facing is stagnation in dealmaking.”
Representatives for Venezuela’s communications ministry did not respond to a request for comment about Mr. Sheffield’s comments.
The post Chevron Is in Talks to Expand in Venezuela, a Potential Win for Trump appeared first on New York Times.
