Chevron & European Oil Firms Urge Continued Access to Venezuela

Chevron Corporation CVX, along with several European oil companies, is actively engaged in high-level negotiations with the Trump administration to retain stakes in joint ventures with Venezuela’s state-owned oil firm, Petróleos de Venezuela, S.A.  (“PDVSA”), according to Reuters. These talks follow the U.S. government’s decision in March to revoke longstanding licenses that previously allowed limited operational continuity between international firms and PDVSA amid ongoing sanctions.

Revoked Licenses Disrupt Foreign Investment in Venezuela

The U.S. Treasury Department's revocation of key licenses has thrown major energy partnerships into disarray. These licenses allowed Chevron, a Houston, TX–based integrated oil and gas company, Repsol S.A. REPYY, a Spain-based integrated oil and gas company, and others to maintain a foothold in Venezuela’s lucrative oil sector. Without these authorizations, companies are required to wind down their operations by May 27, leaving critical questions unanswered regarding asset management, staffing and the legal future of billions of dollars in energy infrastructure investments.

The uncertainty comes as PDVSA, grappling with economic instability and reduced oil production, has shifted to a model of accepting only prepaid or barter-based oil transactions, canceling multiple cargoes, including those allocated to Chevron.

Foreign Oil Majors Request Status Quo Extension

Industry insiders reveal that energy giants are appealing to Washington for a reinstatement of the 2020-2022 license framework, which permitted continued presence in Venezuela without allowing production expansion or oil exports. This middle-ground solution would prevent a complete foreign exodus and shield companies from total asset loss while ensuring Venezuela’s state-owned oil and natural gas company does not resume a pattern of unpaid dividends and accumulating debts to its partners.

Chevron’s Critical Stake in Venezuela’s Oil Production

Chevron remains the last standing U.S. oil firm in Venezuela, holding minority shares in four key joint ventures responsible for approximately 25% of the country's oil output. This unique position gives Chevron not only a strategic advantage but also places it at the center of the United States's geopolitical energy calculus.

Despite canceled shipments and a recent suspension at the Petropiar upgrader, Chevron continues to maintain its staffing and logistical framework, leveraging local presence to remain poised for potential license reissuance.

Implications for U.S. Energy Security

Chevron’s CEO, Mike Wirth, has publicly highlighted the strategic value of a continued U.S. corporate footprint in Venezuela. In interviews, he warned that a full withdrawal would create a vacuum quickly filled by oil firms from Russia and China, potentially undermining U.S. interests in the hemisphere.

"We are the only American company that remains on the ground in Venezuela," Wirth stated. "If we were to leave, American energy interests would be displaced by foreign competitors."

European Stakeholders Eye License Renewal

European players like Spain's Repsol are following suit. Josu Jon Imaz, CEO of Repsol, confirmed that it is still in contact with U.S. officials, citing a shared desire to maintain operational continuity and strategic interests in Venezuela's oil industry.

These companies, while refraining from public disclosure of their formal license requests, are unified to retain minimum operational capacities, including local offices, key employees and access to pre-sanctioned infrastructure, even if oil exports remain restricted.

Cost of Departure: Billions in Debt and Infrastructure Risk

Chevron was previously owed $3 billion by PDVSA, a debt largely recovered through export allowances granted under a 2022 license. However, pending dividend repayments remain unresolved and a forced withdrawal would not only jeopardize recovery but also lock billions in stranded assets.

As PDVSA continues plans to nationalize joint ventures and self-manage crude exports, foreign partners are scrambling to mitigate risks and negotiate terms that prevent wholesale asset seizure or indefinite deferment of outstanding debts.

Venezuela’s Oil Output Faces Uncertain Future

With oil production in Venezuela already suffering due to years of underinvestment, mismanagement and international sanctions, experts estimate a 15-30% decline in national output by 2026 if foreign firms are forced out without licensing alternatives.

Despite holding the world’s largest proven crude reserves, Venezuela lacks the capital and technology to revitalize its energy sector without international collaboration. The current standoff could further cripple the country’s output, isolate its economy and deepen global oil supply instability.

Conclusion: Strategic Balance Between Sanctions and Presence

As Chevron and Europe’s oil firms await a decision from the Trump administration, the situation highlights a delicate balance between implementing sanctions and preserving U.S. influence in global energy markets. A renewed license regime could offer a pragmatic path forward, maintaining pressure on the Maduro government while safeguarding American and allied investments in one of the most oil-rich nations on Earth. The coming weeks will prove decisive, not only for Chevron and its European counterparts but for the broader geopolitical alignment in Latin America’s energy sector.

CVX's Zacks Rank & Key Picks

Currently, CVX holds a Zacks Rank #5 (Strong Sell), while REPYY has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Comstock Resources, Inc. CRK and Expand Energy Corporation EXE, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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