Chevron will invest more than $7 billion in Venezuela over the next five years and more than double its oil production in the country to about 600,000 barrels per day, Reuters reported Wednesday.

The investment follows new agreements with Venezuela that grant Chevron improved fiscal, commercial and legal terms, along with additional acreage in the Orinoco Belt. Chevron said its three Venezuelan joint ventures will deploy the money through 2031, with total production costs remaining below $20 per barrel — a cost level that places Venezuelan heavy oil among the cheaper sources of new supply globally, though Orinoco Belt crude requires blending with lighter diluents before it can be exported. Improved fiscal and legal terms address a core reason foreign companies have been reluctant to redeploy capital in the country since the 2007 nationalizations.

Chevron currently produces about 290,000 bpd in Venezuela, all of which is exported to the United States, making it by far the largest foreign producer in the country. Venezuela's national output stands at roughly 1.1 million to 1.2 million bpd, down from more than 3 million bpd in the late 1990s, leaving substantial shut-in capacity and undeveloped acreage that a $7 billion program could begin to restore.

The new acreage includes the Carabobo-1 and Carabobo-2-South-A areas in the Orinoco Belt, assigned to Petroindependencia, the joint venture in which Chevron holds a 49% interest. Chevron raised its Petroindependencia stake to 49% in April and also received rights to develop the Ayacucho 8 area next to its Petropiar venture. The company's three Venezuelan joint ventures have increased production by 15% so far this year.

Wednesday's announcement puts a dollar figure and a production target on the Chevron agreements that were nearing completion earlier this week. Those agreements had previously been described only as being of "significant size," with Chevron seeking additional Orinoco Belt acreage. A concrete target of 600,000 bpd gives observers a measurable benchmark for tracking whether the expansion stays on schedule through 2031.

Chevron's investment is separate from Washington's agreement to take a majority stake in 17 Venezuelan oilfields containing about 65 billion barrels of proved reserves. President Donald Trump has also called for roughly $100 billion of investment to rebuild Venezuela's oil industry following the U.S. capture and removal of Nicolás Maduro in January.

ExxonMobil and ConocoPhillips have yet to return to the country after their Venezuelan assets were nationalized under Hugo Chávez in 2007. Both companies were awarded multi-billion-dollar arbitration awards against Venezuela over those seizures, and whether they follow Chevron back in remains one of the key open questions for the sector's rebuild. Both companies have declined to comment on their plans for the country.

By Michael Kern for Oilprice.com