Chevron has decided not to increase its capital spending this year to speed up its expansion in Venezuela. This comes as major U.S. oil companies respond cautiously to former President Donald Trump’s call for more investments in the country.
Eimear Bonner, Chevron’s chief financial officer, expressed a hopeful outlook for growth in Venezuela but emphasized the need to manage spending carefully while focusing on enhancing production from existing operations. She mentioned that Chevron currently produces 250,000 barrels of oil per day, with the potential to increase that by 50% over the next 18 to 24 months, pending additional U.S. government approvals. However, she confirmed that there would be no changes to the company’s capital guidance for the year regarding Venezuela.
In December, Chevron projected capital expenditures for 2026 to be between $18 billion and $19 billion, which is on the lower end of their long-term expectations. The company’s recent fourth-quarter results surpassed analysts’ predictions, showing adjusted earnings per share of $1.52, although this was a decline from $2.06 during the same period last year due to a significant drop in oil prices.
Chevron remains the only U.S. oil company actively operating in Venezuela through a joint venture with the state oil company, PDVSA. Analysts believe Chevron is well-positioned to help the U.S. government’s goals of encouraging companies to invest $100 billion to develop the country’s significant oil reserves.
Jason Gabelman, an analyst with TD Cowen, indicated that Venezuela could be a promising opportunity for Chevron if the investment terms are favorable. The U.S. oil sector, however, has stated that robust financial, legal, and security guarantees are crucial before committing any capital to Venezuela, which has a past marked by political instability and the nationalization of foreign oil assets.
Gabelman noted that Chevron could make relatively limited investments to boost production by around 200,000 barrels per day within two years, potentially increasing cash flow from operations by $400 million to $700 million annually. However, he pointed out that the company might hesitate to invest heavily until there is a more stable political environment.
Darren Woods, the CEO of ExxonMobil, recently said at a meeting with oil executives that Venezuela is “uninvestable” at the moment, which elicited a sharp response from Trump. Exxon’s earnings report did not mention Venezuela, but Woods is expected to address the company’s strategy during upcoming analyst calls.
Despite this, Chevron has other appealing investment options and is currently achieving record oil production levels following its $53 billion acquisition of Hess. The company produced 4.05 million barrels of oil equivalent per day in the last quarter and anticipates a growth rate of 7-10% by 2026, significantly higher than the previously projected 2-3% growth rate until 2030. Bonner stated that future production increases would mainly come from projects in Guyana, the Gulf of Mexico, and the eastern Mediterranean, adding that recent production disruptions in Kazakhstan would not negatively affect Chevron’s cash flow from that venture.