Under the U.S.-Venezuela agreement, Venezuelan oil may enter U.S. reserves in November; Chevron plans to invest $7 billion in Venezuela to expand production, hitting a record high in stock price

Oil cooperation between the United States and Venezuela is accelerating. Energy giants such as Chevron and ENI signed multiple expansion agreements in Caracas on Wednesday, committing to large-scale investments to boost the oil production of this OPEC member. On the same day, the White House announced that crude oil under the agreements could enter U.S. reserves as early as November.

Chevron announced it will invest $7 billion in Venezuela over the next five years through joint ventures, expecting to produce about 600,000 barrels per day in the country by 2031, more than doubling the current level. Chevron stated that the total extraction cost for the projects is expected to be below $20 per barrel, while Brent crude was trading at about $95 per barrel on Wednesday.

Chevron shares closed up 0.35% on Wednesday at $211.78, surpassing the high in March and setting a new record.

White House spokesperson Anna Kelly stated in an interview on the same day that crude oil obtained under the agreement with Venezuela could reach the U.S. reserve system as early as November.

According to CCTV News, on September 2, Venezuela's acting president Rodríguez met with U.S. Secretary of Energy Wright. After the meeting, the two countries formally signed multiple cooperation agreements.

Recently, U.S. President Trump announced on social media that the U.S. has reached an agreement with Venezuela, gaining "majority control" over more than 65 billion barrels of "proven oil reserves" in Venezuela.

Venezuela's acting president Delcy Rodríguez stated that the oil cooperation agreement with the U.S. will last for 25 years, with the goal to increase crude oil production to 1.5 million barrels per day and maintain Venezuela's sovereignty over its natural resources.

Venezuela currently produces about 1.25 million barrels per day, far below its late 1990s peak of 3 million barrels per day.

The signing ceremony was held at the Miraflores presidential palace in Caracas. Chevron is one of the few major international oil companies that remained in the Venezuelan market after former President Hugo Chávez nationalized assets in 2007, and this agreement further strengthens its strategic position in the country.

ENI CEO Claudio Descalzi stated directly at the ceremony, "What we need is not just signing documents, but actual barrels of output."

Most of the above agreements are not the result of standalone negotiations, but rather parts of the migration of dozens of energy contracts to new terms under Venezuela's major oil reform framework approved in January this year, with negotiations underway for months.

Other participants in this signing include power company GE Vernova, energy firm Primavera, as well as Denver-based oil field services company Aspect.

GE Vernova has established a strategic alliance with PDVSA and signed agreements with the national power company Corpoelec to repair and strengthen Venezuela's aging and deteriorating power and energy infrastructure. Venezuela's fossil fuel industry has long been battered by mismanagement, corruption, and sanctions, with power and infrastructure bottlenecks long restricting output growth.

The Role of Washington: NABEP Equity Negotiations Underway

The U.S. government’s role in this round of deals is extending from policy maker to a potential direct stakeholder. Earlier this week, the U.S. entered negotiations to acquire a 35% stake in NABEP.

NABEP is a private company holding a century-long concession to 17 oil fields in Venezuela; if the deal is successful, Washington will indirectly be involved in core asset development and revenue allocation.

At the signing ceremony in Caracas, U.S. Secretary of Energy Wright said these deals are worth "tens of billions of dollars," marking a "transformation for Venezuela," and stressed, "We (the U.S.) are very interested in expanding energy production in the Americas—it’s our neighborhood."

Venezuela's acting president Delcy Rodríguez stated that these "historic" measures will soon bring economic growth, and thanked the Trump administration for driving a "win-win" agreement.

Wirth also noted that new Venezuelan supply will enter the market "gradually" and that disruptions in the Strait of Hormuz are not a "quick fix"; "these investments will take years." Even if Chevron’s expansion goes smoothly, Venezuela’s output will still be far below the nearly 3.5 million barrels per day in the late 1990s.