Chevron, the only foreign oil company left in Venezuela

NEW YORK: The US oil company Chevron is walking a tightrope amid tensions between Washington and Caracas to retain its fragile position as the only foreign company allowed to exploit Venezuela’s oil reserves – the largest in the world.

Washington’s total blockade of oil tankers, added last week to punishing US sanctions, has put Chevron and its presence in Venezuela back in the spotlight.

Why is Chevron in Venezuela? –

The Venezuelan Gulf Oil Company, Chevron’s predecessor in Venezuela, was founded in April 1923 and began operating its first well in August 1924.

Initially operating near Lake Maracaibo, it then moved on to new deposits such as Urumaco and Boscan. Most reserves are now in the Orinoco Belt.

Gulf Oil merged with Standard Oil of California in 1984, forming the giant now known as Chevron.

The group currently extracts oil from four fields and offshore gas from another field, covering a total area of nearly 30,000 hectares (115 square miles).

This is part of a partnership with the state-owned company PDVSA and its affiliates that employs around 3,000 people.

According to the International Energy Agency (IEA), in 2023, Venezuelan territory contained around 303 billion barrels, or about 17 percent of the world’s reserves.

The US embargo on Venezuelan crude oil, in place since 2019, was relaxed in 2023 with licenses to operate in the country.

But President Donald Trump revoked them all in the first half of 2025 before granting an exception to Chevron.

Yet, according to an industry expert, recent presidential decisions do not affect the group’s activities.

“We believe our presence continues to be a stabilizing force for the local economy, the region and US energy security,” the company told AFP, assuring that it operates in compliance with the law and “sanctions frameworks provided by the US government.”

Other foreign oil companies do not operate inside Venezuela because of the US embargo and a Venezuelan law that requires foreign firms to partner with PDVSA in majority state-owned ventures, a structure Chevron accepted when it was imposed.

How many barrels?

According to Stephen Schork, an analyst at the Schork Group consulting firm, Venezuela’s total production is around 800,000 to 900,000 barrels per day compared to more than 3 million at its peak.

With its license, Chevron generates around 10 percent of Venezuela’s production, although sources differ on the exact figure.

This currently represents around 150,000 to 200,000 barrels per day, 100 percent of which is exported to the United States.

But the oil is high-sulfur “sludge,” said Schork.

“It is heavy, nasty stuff. You can’t move this oil in a pipeline,” and it’s the hardest to refine, he explained.

Because of the embargo, Caracas is forced to sell its oil on the black market at heavy discounts, mainly to Asia.

But the new US blockade is expected to significantly reduce these illicit exports — by up to 50 percent according to experts.

Does US need the oil?

The United States has refineries around the Gulf of Mexico that were specifically designed decades ago to process this highly viscous Venezuelan oil.

Due to its lower quality, it is converted into diesel or by-products such as asphalt, rather than gasoline for cars.

“The United States does not need this oil,” noted Schork.

If they want it, he believes, it is for political reasons.

They want to “prevent the vacuum created by their departure from being filled by countries that do not share their values, such as China and Russia,” according to a source close to the matter.