Chevron CEO Mike Wirth says the plan to invest $7 billion over the next five years through its joint venture partnerships to more ...
What Michael Wirth said
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Michael Wirth discussed Chevron's $7 billion investment in Venezuela, describing it as a 'win-win-win' for American and regional energy security, US refiners, and the Venezuelan economy. He stated the investment spans three joint ventures with PDVSA over five years, aiming to more than triple production from pre-2025 levels. Wirth noted production has grown from 40,000 to over 250,000 barrels a day and targets over 600,000 by 2031. He emphasized strong legal protections in the deal, including dispute resolution and tax/royalty regime stability. Wirth said the $7 billion is on a 100% basis and the company's capital guidance is unchanged. He declined comment on a separate Pentagon equity stake in another venture. Regarding Middle East disruptions, Wirth said Venezuelan growth will take years, while strategic reserves and actions like the Jones Act waiver address near-term supply. He acknowledged alternative routes around Hormuz but noted they take time.
Key takeaways
Chevron will invest $7 billion in three Venezuelan joint ventures with PDVSA over five years.
Production will rise from 250,000 barrels a day to over 600,000 by 2031.
Chevron's capital guidance is unchanged; the investment is already accounted for.
Venezuelan supply growth will take years, not offset immediate Middle East disruptions.
0:07What is the condition that these fields are currently in in terms of the infrastructure, and how quickly will it take Chevron to get it up to the standard that you need it to be?
1:32Can you share just how much reserves are under these specific fields that are in this deal?
2:08Are you changing anything in terms of your outlook in order to accommodate this Venezuelan investment?
2:55Can you give us any more detail on what that will look like, including whether you got any assurances from the US government?
8:28Can you just give us an update on how you're looking at the global inventory picture and what the recent uptick in fighting means for these oil outputs getting out?
I'm Tyler Kendall here in Venezuela and pleased to say I am joined now by the Chevron CEO Mike Wirth. Mr. Wirth, thank you so much for joining us here today on a day of some pretty massive news for your company: $7 billion in investment to help bolster production in Venezuela. Let's just start with the basics. What is the condition that these fields are currently in in terms of the infrastructure, and how quickly will it take Chevron to get it up to the standard that you need it to be?
Well, this is a win-win-win really. It's a win for American and regional energy security. It's a win for US refiners who really prefer this type of crude oil. It's a win for the Venezuelan economy to see the investment that will be made. We've been here for a hundred years, so we're part of the past of this country. We're here today with jobs and investment, and we're really pleased that we've reached these agreements that will allow us to invest $7 billion through three different joint ventures over the next five years to more than triple production from where it was the year before President Trump came into office. So, we have good facilities with good people, and through the last several years when things have been more difficult, we've been able to maintain our assets. We've been able to invest and actually grow production from a low of about 40,000 barrels a day to over 250 today, and we're on our way, as I said, to over 600,000 by 2031.
So 600,000 by 2031. But broadly speaking, I've heard you say that this could be for decades and decades of development. Can you share just how much reserves are under these specific fields that are in this deal?
Yeah. So, we're doing a lot of technical work right now as we've added some acreage to our portfolio to do the engineering assessments to really characterize the size of the resource. I'll just say it is many billions of barrels. And so, it's heavier oil which takes some different technologies to produce. But over time, that production will last here for decades. This is not for a few years; this will last for decades.
$7 billion, that's a pretty big number. It's the most that we've seen an oil major commit to Venezuelan production since Nicolás Maduro's ouster. Can you just give me a little bit more detail on where that investment is coming from? Is this split with the joint venture partner? And then also, how are you thinking about capex? Are you changing anything in terms of your outlook in order to accommodate this Venezuelan investment?
So the $7 billion is 100% basis. So it's the three joint ventures. It's us and the state company PDVSA, who is our partner here, will make those investments over a period of time. Our capital guidance to our investors is unchanged. We've accounted for this in our forward guidance and our forward planning. And so, our overall capital spending won't change. We've got room for this as part of that plan.
And as you make these plans, of course, there is always risk. And you said this morning that there are, quote, "significant protections" built into this deal. Can you give us any more detail on what that will look like, including whether you got any assurances from the US government?
Well, I can't share the details of these contracts, but I will tell you that as important as the commercial and fiscal terms were the legal terms and the protections for investors, which is an issue that we deal with in many, many countries around the world. And so we have provisions in there that are very strong relative to other contracts as it relates to resolving disputes, ensuring that the tax and royalty regime that we've agreed to and will invest under isn't changed on us. And so there are very strong legal protections in Venezuela and beyond that are part of this deal that give us the confidence to make this investment.
A senior US official told me that a big part of today—your announcement, the government's announcement—is a bid to try to convince other companies to boost Venezuelan oil production. Can you just give me some clarity here? Why is it safer now to invest in Venezuela?
Well, the first thing is it's more economic, and under the prior rules, it was very difficult to get a competitive return on investment here in Venezuela. And so I think that was hurdle number one. And then hurdle number two was the experience that some other companies have had in the country where contracts have seen the terms changed. And I think people are rightly asking questions: how do we protect from that happening again? And I think those are the things that have been certainly at the top of our list in discussions with the US government, with the Venezuelan government. And I'm very pleased with the support we've seen from both and the true alignment of interests to encourage economic development in this country and energy supply that's good for not only Venezuela, the United States, but for the entire region.
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