Chevron has restarted drilling at a key Venezuelan oil field despite signals from the White House the sanction noose around Caracas is about to tighten.
Work at the Petroindependencia field in the Orinoco Belt has been ongoing since the middle of last month, Bloomberg reported today, citing unnamed sources. That work’s part of preparations to drill 30 new wells at the field, the report also said.
The new wells should increase Chevron’s total output from its joint ventures with PDVSA in Venezuela by 35% to some 250,000 barrels daily by next year.
Back in September last year, Reuters reported that Chevron was eyeing an increase of 65,000 bpd from its ventures with PDVSA by the end of 2024. At the time, the ventures were producing 135,000 barrels daily, which was 70% higher than a year earlier.
While Chevron is the only Western supermajor with special authorization to operate oil fields and export from Venezuela, Washington had indicated that more authorizations could be in the future amid tight global supply.
The mood has changed since September last year, however, as Maduro staked an open claim to the Essequibo region in neighboring Guyana with a December referendum. The move prompted a warning from Rystad Energy that if the situation escalated, Chevron would suffer a setback in its plans for Venezuelan oil.
Venezuela is home to the largest crude oil reserves in the world, though production has been in decline due to corruption and lack of investment in and mismanagement of state-run PDVSA. In 2022, production hit a 50-year low of around 700,000 bpd. Late last year, Washington eased some sanctions on Venezuela, allowing Chevron to resume work in the country to enable exports to make up for lack of access to Russian heavy crude as a result of the war in Ukraine.
By Charles Kennedy for Oilprice.com
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