Chevron, Shell Near First Major Oil Deals in Venezuela Since US Sanctions on Maduro

• Chevron is negotiating to expand its Petropiar project to the undeveloped Ayacucho 8 area in the Orinoco Belt, potentially making it the largest private producer in a region holding over three-quarters of Venezuela's crude reserves
• Shell signed preliminary agreements to develop the Carito and Pirital fields in Monagas North, an eastern region producing light and medium crude plus natural gas critical for blending with Venezuela's heavy oil
• Venezuela's total oil production currently stands at around 1.05 million barrels per day, with Chevron-PDVSA producing approximately 110,000 bpd at Petropiar and the government reviewing all oil contracts with completion expected by end of March

Summary

Key Developments:

Chevron and Shell are finalizing the first major oil production deals in Venezuela since President Nicolas Maduro's capture by U.S. authorities in January. These agreements mark the initial steps in what President Trump has described as a $100 billion effort to rebuild Venezuela's oil industry.

Chevron's Expansion:

Chevron is negotiating to expand its largest project, Petropiar, by adding production rights to the Ayacucho 8 area in the Orinoco Belt. This would become Chevron's fifth oil area in Venezuela, potentially making it the biggest private producer in the Orinoco region, which contains over 75% of Venezuela's crude reserves. Current Petropiar production stands at approximately 90,000 bpd of upgraded Hamaca crude and 20,000 bpd of vacuum gasoil.

Shell's Entry:

Shell signed preliminary agreements covering the Carito and Pirital fields in the Monagas North region, focusing on light/medium crude and natural gas production. The area currently produces 94,000 bpd of crude and 1.03 billion cubic feet per day of gas. Shell is partnering with McDermott & Prom and Baker Hughes on various opportunities.

Market Context:

Venezuela's total production is approximately 1.05 million bpd. A January oil law reform grants foreign companies autonomy to operate, export, and sell Venezuelan oil even as minority partners of state-owned PDVSA. The government is conducting a comprehensive review of all oil and gas projects, expected to conclude by end-March. Other companies, including Spain's Repsol (owed over $5 billion) and Maurel & Prom, are also seeking expansion opportunities.