Chevron’s production rise in Venezuela is limited by political risk

Chevron Corp is producing around 90,000 barrels a day at its Venezuelan oil joint ventures, nearly double the number in 2022, the oil company’s Chief Executive Michael Wirth said on Tuesday, warning that political risks could limit profits.

The largest US producer still operating in Venezuela, which is under Washington sanctions, has returned some employees to operations in the South American country under US authorization.

Production is hovering around 90,000 barrels per day (bpd), compared with 50,000 bpd before the easing of US sanctions last year. Chevron received in November an American license for six months, which can be automatically renewed each month.

However, Chevron’s output in Venezuela could remain modest, Wirth said, and the outcome of future elections is a factor.

“I would expect us to go slow” in Venezuela, Wirth told analysts during the company’s annual investor day, adding that production “is a little higher than that (90,000 bpd) probably today.”

The company has exported oil to its own US refineries and those of other companies since January. Chevron was on track to ship more than 100,000 bpd of Venezuelan crude to the United States this month, according to shipping documents and data seen by Reuters.

Wirth said the US government’s policy change is relatively recent and the company could face challenges when the next elections are held in Venezuela.

The main opposition parties abstained from participating in the 2018 presidential elections and the 2020 parliamentary elections in the country, considering that they lacked electoral guarantees.

The United States, which has had a hostile relationship with Venezuelan President Nicolás Maduro, has said it wants the country to hold new elections open to all candidates, including members of the opposition.

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