• Chevron nears a deal to expand operations in Venezuela, potentially boosting its existing ventures.
  • The agreement would allow Chevron to increase output and possibly resume crude exports to the U.S.
  • A final deal is pending, but talks have advanced amid efforts to ease sanctions.

Chevron Corp. is close to reaching a deal with Venezuela’s government to expand its operations in the country, according to people familiar with the matter. The agreement, which could be finalized in the coming weeks, would allow the U.S. oil major to increase production at its joint ventures and potentially resume exporting crude to the U.S., a significant shift in the country’s oil sector.

Expanding a Footprint

The deal comes as the Biden administration considers easing sanctions on Venezuela’s oil industry, which have been in place since 2019. Chevron, which currently holds a minority stake in four joint ventures with Venezuelan state oil company Petróleos de Venezuela SA (PDVSA), has been seeking approval to expand its operations as a first step toward normalizing relations between the two countries.

According to sources, the new deal would allow Chevron to take a more active role in managing the joint ventures, which could lead to an increase in output. The company might also be permitted to ship crude to the U.S. under a new license, although such a move would require further approvals from the U.S. Treasury Department.

Navigating Sanctions

A spokesman for Chevron declined to comment on the ongoing negotiations. The office of Venezuelan President Nicolás Maduro has not responded to requests for comment. The complexity of the talks underscores the delicate balance between U.S. foreign policy and corporate interests, as both sides seek to benefit from the potential lifting of restrictions.

“This is a win-win for both parties,” said José Ignacio Hernández, a visiting professor at Georgetown University and former Venezuelan government official. “Chevron gets to expand its business, and Venezuela gets much-needed revenue and technical expertise.”

Implications for the Market

If a deal is reached, it could have broader implications for global oil supplies, especially as the world grapples with tight supply and high prices. Venezuela has some of the largest oil reserves on the planet, but its industry has been crippled by mismanagement and sanctions, with output falling to historic lows.

Industry analysts note that even with a deal, meaningful increases in production would take time. “You’re not going to see a dramatic jump overnight,” said Sara Vakhshouri, an energy analyst at SVB Energy International. “But this could pave the way for more foreign investment in the country.”

A Fragile Prospect

The deal is not yet sealed, and any misstep could derail progress. Human rights concerns, as well as opposition from some U.S. lawmakers, remain potential stumbling blocks. Chevron has been careful to emphasize that it adheres to all applicable laws and sanctions.

Still, the very fact that talks have advanced is a telling sign. As one person familiar with the matter put it, “The pieces are in place, but it’s not done until it’s done.”

Correction: An earlier version of this article misstated Chevron’s stake in its Venezuelan joint ventures. Chevron holds a minority stake, not a majority.