Chevron’s Return to Venezuela Fuels Controversy Over Oil Payments to Maduro
Chevron will transfer part of the oil it produces in Venezuela to the Maduro government, Bloomberg has reported, citing unnamed sources. The deal follows the U.S. granting a sanction exemption to the supermajor so it could continue operating in Venezuela.
The terms of the deal are similar to those of other international oil majors operating in Venezuela, Bloomberg’s sources said, notably paying royalties in the form of crude. Chevron specifically was banned by the U.S. federal government from making any cash payments to the Venezuelan government. It was a condition for the license to return to Venezuela.
The U.S. government has made it clear it wants to prevent the Venezuelan government from reaping any financial benefit from the country’s oil wealth, but this has proved difficult, since U.S. refiners are sizable buyers of Venezuelan crude and the chief reason why Chevron was granted that sanction exemption. Last year, imports of Venezuelan crude in the U.S. hit peaks of some 300,000 barrels daily, per data from Kpler.
Before it had the sanction door slammed in its face earlier this year, Chevron was producing some 240,000 barrels daily in Venezuela. This supply is now set to return to the market, with ING noting this will happen gradually over the second half of the year, with the suggestion that prices for heavy crude grades are set to suffer a negative impact from this return.
With a portion of this now going to the Venezuelan government, it would betray the purpose of Washington’s condition since thus oil can be sold abroad at a profit. However, trying to prevent any form of benefit for the state of Venezuela from Chevron’s business activities in the country would likely trigger retaliation from the Maduro government, leading to the loss of these business activities and important barrels of heavy crude for Gulf Coast refiners.
By Irina Slav for Oilprice.com
Chevron Tops Profit Estimates on Record-High Oil and Gas Output
Chevron Corporation (NYSE: CVX) beat Wall Street estimates of its second-quarter profit as Permian production surged and U.S. and worldwide oil and gas output jumped to record highs.
Chevron reported on Friday adjusted earnings of $3.1 billion, or $1.77 per share, for the second quarter of 2025, compared to adjusted earnings of $4.7 billion, or $2.55 per share, for the same period last year.
The decline was the result of lower realizations due to lower crude oil prices, lower income from upstream and downstream equity affiliates, and an unfavorable fair value adjustment for shares of Hess Corp, Chevron said.
Last month, Chevron finally completed the $53-billion acquisition of Hess Corporation after winning an arbitration case against Exxon over the Guyana assets of Hess.
Despite the more than 40% slump in adjusted earnings, Chevron beat the analyst consensus estimate as its EPS came in at $1.77, higher than the $1.73 earnings per share expected in the analyst consensus in the Wall Street Journal.
At Chevron, the lower oil prices were partly offset by record quarterly oil-equivalent production in the Permian and elsewhere and higher downstream earnings in both the U.S. and overseas, due to higher refining margins on refined product sales versus Q2 2024.
Worldwide and U.S. net oil-equivalent production set quarterly records, Chevron said.
Worldwide production rose thanks to a 34% jump at Kazakhstan’s Tengizchevroil venture, a 22% increase in the Gulf of Mexico production, and a 14% rise in Permian basin output.
Chevron’s oil and gas production in the Permian Basin rose to 1 million barrels of oil equivalent per day (boepd) in the second quarter.
The U.S. supemajor also boasted cash flow from operations, at similar commodity prices, at one of the highest levels in company history.
“Second quarter results reflect continued strong execution, record production, and exceptional cash generation,” Chevron’s chairman and CEO, Mike Wirth, said in a statement.
“The completion of the Hess acquisition further strengthens our diversified portfolio and positions us to extend our production and free cash flow growth profile well into the next decade.”
By Tsvetana Paraskova for Oilprice.com
Trump’s Chevron Deal Is a Win for America
- The Trump administration reinstated Chevron’s licence to operate in Venezuela.
- Chevron's renewed license to operate may potentially add over 200,000 bpd of heavy crude to U.S. Gulf Coast refineries.
- The move marks a strategic pivot away from years of neoconservative, regime-change-driven policy, favoring pragmatic engagement.
The Trump administration has taken the decision to reinstate Chevron’s licence to operate in Venezuela, marking a decisive and long-overdue shift in its Venezuela policy.
The decision, which will see Chevron resume operations in the world’s largest proven oil reserves after being barred in May 2025, is more than an economic arrangement. It is a significant foreign policy recalibration.
For too long, US engagement in Venezuela has been driven by a neoconservative agenda and the false promise of regime change - an approach that has only harmed US national security.
The reinstatement of Chevron’s licence follows months of interdepartmental infighting that left the President’s Venezuela policy out of step with his broader doctrine of non-interference and pragmatic realism.
This marks a clear pivot away from costly ideological crusades abroad and a renewed focus on core US interests.
Chevron’s return to Venezuela is, first and foremost, a victory for American economic and energy security.
Global instability and conflict in the Middle East have placed enormous strain on energy markets, driving volatility at home. Reopening access to Venezuelan oil, under American oversight, delivers a major strategic gain for US supply chains.
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Bloomberg has reported the deal could add more than 200,000 barrels per day to US refineries, much of it heavy crude that powers facilities across the Gulf Coast.
The timing is critical. Summer brings a surge in demand as families travel, and business activity intensifies.
The President has secured an immediate energy boost without the entanglements that often accompany deals with other major producers. Venezuela has already stockpiled the equipment required to resume pipeline operations.
This decision also puts US national security at the forefront of hemispheric policy.
Chevron’s presence allows the White House to reassert American commercial leadership in an energy market where China and Russia have been making inroads. The revocation of Chevron’s licence acted as an invitation for adversaries to deepen ties with Caracas and build an energy nexus hostile to American interests.
The new authorisation, which may also cover European firms such as Eni and Repsol, ensures that America and its allies maintain preferential access to a critical supply source, while retaining influence over the Western Hemisphere’s energy future.
It sends a clear message to adversaries: hostile interference in the Western Hemisphere will not be tolerated.
Beyond oil, the agreement signals an opening for renewed American involvement in other important strategic sectors. Venezuela holds vast reserves of rare earths and critical minerals, resources that have increasingly become targets of Chinese and Russian investment.
Reintroducing American capital and expertise in these sectors won’t just push back against adversaries but also bolster America’s manufacturing and high-value export markets.
These are the outcomes of a regional strategy rooted in strategic calculation, not performative ideological purity.
Trump’s decision directly undercuts Secretary of State Marco Rubio’s years-long fixation on regime change in Venezuela, a policy that has proven ineffective and contrary to American interests.
Rubio has long worked with the Cuban-American congressional lobby in South Florida, using Venezuela policy as political theatre to appease voters hostile to the Maduro administration. But this approach has failed to produce any breakthrough.
It has also contributed to increased migration, while denying American companies access to a valuable energy market. His grandstanding may resonate in narrow political circles, but it has done little for ordinary Americans.
President Trump’s decision to proceed with the Chevron agreement marks a return to results-based foreign policy.
The conflict between Rubio and the President’s special envoy, Richard Grenell, exposed a deeper tension between ideological legacy and pragmatic leadership. In this case, pragmatism prevailed - and rightly so.
The recent release of American detainees from Venezuela, coupled with Caracas’s agreement to take back hundreds of its nationals held in El Salvador, offers a concrete example of how this pragmatism can deliver results.
The administration’s move is not an endorsement of Maduro. It is an acceptance of reality. Regime change has failed. The costs have been high, the returns non-existent. It is time to deal with the world as it is, not as some wish it to be.
By restoring Chevron’s licence, President Trump has signalled a return to realism. He has prioritised energy security, immigration enforcement, and American business, while rejecting the failed fantasies of toppling foreign governments.
By Cyril Widdershoven for Oilprice.com
Chevron, SLB Deals Signal U.S. Return to Iraqi Oilfields
- The U.S. and allies are ramping up energy and infrastructure deals to bolster ties with Iraq and its semi-autonomous Kurdistan region.
- U.S. firms like Chevron, SLB, and Baker Hughes have signed new agreements or are in talks with Baghdad to develop oil and gas fields.
- Iraq’s vast oil reserves (estimated up to 215 billion barrels), critical trade routes, and its role in China’s Belt and Road Initiative make it a high-value prize.
Western Firms Eye Multiple Deals In Major Offensive To Take The Iraq Initiative Back From China And Russia
There are two distinct superpower strategies at play to capture the very heartland of the Middle East – Iraq. On the one hand, China and Russia want to end the semi-independent status of Kurdistan in the north, have it rolled into the rest of Iraq as a regular province, and then expel all Western firms from the then-unified country. The objective for Beijing and Moscow in so doing was delineated by a very senior member of the Russian administration to a senior source who works closely with Iran’s Petroleum Ministry, and then exclusively relayed to OilPrice.com: “By keeping the West out of energy deals in Iraq, the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise.” On the other hand, the U.S. and its allies want to bolster the independence of the Kurdistan region to act as leverage to extend their influence in the rest of Iraq to the south. Their objective is to have the Kurdistan region expel all Chinese, Russian and Iranian companies from the region, and then to gradually push for the same to happen in the rest of Iraq. Last week saw further evidence of this renewed impetus by the West to do just this.
Perhaps the most pertinent example of these zero-sum game strategies at play involved U.S. energy firm HKN. On the very same day that its Sarsang block in Kurdistan was hit by drone strikes from ‘unknown assailants’ (Kurdistan has posited that it was Iran-backed Iraq paramilitaries, while the Iraq government has said it was not) HKN also signed an agreement with the Iraq government-owned North Oil Company to develop the Hamrin field in Salah ad Din province in the country’s north. Moreover, just prior to the signing of the Hamrin deal, the same firm was threatened with legal action by the Iraq government for signing another deal with Kurdistan to develop its Miran gas field in Sulaymaniyah without the approval of the federal government in Baghdad. On this occasion, then, it could be said the Baghdad, Beijing, and Moscow won that round. Indeed, every production shutdown in Kurdistan that resulted from the recent drone attacks can be regarded by the Iraq government and its twin sponsors of China and Russia as a very useful reminder to Western firms that doing business with the federal government is a lot less troublesome and costly than doing business with Kurdistan. An additional reminder that even if these firms continue to operate in Kurdistan they only do so by the good graces of Baghdad came in the form of its recent reiteration of original 2014 ‘Budget Payments-for-Oil Deal’ that was supposed to govern all Kurdistan oil deals, as analysed in my latest book on the new global oil market order. This latest manoeuvre would involve the immediate transfer of all oil produced in the Kurdistan region to the federal government of Iraq-controlled State Organization for Marketing of Oil (SOMO) for export. Baghdad has offered to provide Kurdistan with an advance of $16 pb (cash, or in-kind benefit), based on a minimum delivery of 230,000 bpd, with any additional production to be included under the same mechanism. This would effectively put the control of Kurdistan’s oil sales -- and therefore finances – back in Baghdad’s hands. This deal in the past has seen the Iraq government perennially fail to meet its budget payments requirements and keep Kurdistan on the back foot by having to beg for the money due it and Western firms operating their under consistent pressure.
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Ultimately, the idea is that these Western firms become so tired of these adjunct financial pressures placed on Kurdistan, and of constant threats of litigation from the Iraq government for engaging in oil sales independent of SOMO, that they either sign new contracts directly with the Iraq government – which has been offered by Baghdad – or just give up and leave Kurdistan. In either of those events, the already intense financial strain placed on Kurdistan by the fundamentally flawed (in that Baghdad does not want it to work and never has done) ‘Budget Payments-for-Oil Deal’ will increase and, so the argument runs, Kurdistan would have little alternative but to accept being rolled into the rest of Iraq. Moving towards this end was the series of legal rulings by Iraq’s Federal Supreme Court (FSC) on 21 February 2024 which underlined that the planned New Oil Law being worked on at that time by the government of Iraq in Baghdad would be the final agent of change aimed at ending any semblance of independence for Iraqi Kurdistan. To begin with, the FSC ruled that the Kurdistan region was compelled to turn over “all oil and non-oil revenues” to Baghdad. This marked the end of any meaningful debate over whether the KRI could count on continuing independent oil sales unimpeded by Baghdad. The final statement of intent came from Iraq Prime Minister, Mohammed Al-Sudani, who clearly highlighted that the new Unified Oil Law – run in every respect out of Baghdad - will govern all oil and gas production and investments in both Iraq and its semi-autonomous Kurdistan region and will constitute “a strong factor for Iraq’s unity”.
There are, of course, several huge reasons why both superpower groupings want to control Iraq. One is that it has a very conservatively-estimated 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East’s total, and the fifth biggest on the planet), according to the Energy Information Administration. Unofficially, it is extremely likely that it holds around 215 billion barrels. Another is that its geographical location puts it square in the centre of routes from the East to the West, with independent borders running into Syria (and the Mediterranean Sea) to the west and Turkey to the north. Its position here also allows it to act as a front for whatever Iran (and the same twin sponsors, China and Russia) wants to export into world markets, especially oil that can simply be rebranded as Iraqi oil and sent on. Its positioning makes it vital as well to China’s multi-generational power-grab project ‘The Belt and Road Initiative’, which includes a corollary build-out of infrastructure and personnel that could be used to a dual civilian and military purpose. These broad and deep objectives are part of the far-reaching deals made by Chia with Iraq over the years – most notably, the foundation stone ‘Oil for Reconstruction and Investment’ agreement signed in September 2019, which allowed Chinese firms to invest in infrastructure projects in Iraq in exchange for oil, and then the ‘Iraq-China Framework Agreement’ of 2021, also fully analysed in my latest book on the new global oil market order.
Denying China and Russia these advantages is reason in itself for the West to act to reassert its influence in Iraq, although it benefits from the same positive aspects of a presence there as well. It is little wonder, then, that the biggest Western firms are now looking to either re-establish themselves in the country or expand their activities. Just last week, the Iraqi Cabinet authorised the Oil Ministry to sign a non-binding memorandum of principles with U.S. oil supermajor Chevron. This would focus on the huge Nasiriyah oil project, and the Balad oil field in the first instance. Around the same time, the U.S.’s SLB signed a contract with the Oil Ministry to increase natural gas production at the enormously strategically vital Akkas gas field, as analysed in full by OilPrice.com, following the cancellation of a previous agreement with the Ukrainian company Ukrzemresurs. And Prime Minister Al-Sudani himself received a delegation from U.S. oil services firm Baker Hughes to discuss potential cooperation and investment opportunities, including the development of oil fields and the capture of associated gas. “Many more deals” are to come from the U.S. and its allies, according to highly-placed security and energy sources in Washington and London spoken to exclusively by OilPrice.com last week. With Iran’s regional security threat having been significantly downgraded, a new U.S.-backed rebuilding strategy underway in Syria, and Russia’s regional geopolitical influence having been dented, the timing of the U.S. and its allies to reassert their influence in Iraq could hardly look better.
By Simon Watkins for Oilprice.com
What to Expect From Chevron’s Massive Guyana Investment
- Chevron completed a $53B acquisition of Hess, gaining a 30% stake in Guyana’s Stabroek block after winning a legal dispute with Exxon.
- The deal boosts Chevron’s long-term oil production outlook amid falling reserves and operational setbacks in other regions.
- Guyana is rapidly becoming a top global oil producer, with massive reserves and fast-growing output led by Exxon, CNOOC, and now Chevron.
Guyana has been the hot new spot for oil exploration in recent years, following several big discoveries. Multiple oil majors are investing in operations in the South American country, as they aim to pump “low-carbon oil” in a bid to continue developing their fossil fuel production with support from governments and consumers. In July, Chevron entered Guyana, alongside Exxon and other oil majors.
In mid-July, the U.S. oil major Chevron announced it had completed the $53-billion acquisition of Hess Corporation following the win of an arbitration case against Exxon over Hess’s Guyana assets. The deal, which would provide Chevron with stakes in the Bakken in North Dakota, as well as a 30 percent stake in Guyana’s Stabroek offshore oil field, had been in the works since 2023.
Exxon operates the Stabroek block and holds a 45 percent stake, with China’s CNOOC holding the remaining 25 percent stake. The takeover was delayed for two years as Exxon and CNOOC claimed they had the right of first refusal for Hess’s stake under the terms of a joint operating agreement (JOA) for the Stabroek block. Hess and Chevron countered by saying the JOA did not apply in the case of a full corporate merger, with the court eventually ruling in favour of Chevron.
Chevron, based in Houston, is the second-largest oil company in the U.S. after ExxonMobil. The acquisition of Hess will make Chevron more competitive both in the U.S. and abroad. Upon the announcement of the takeover and Chevron’s new stake in Guyana, Exxon responded positively, after its initial reluctance to share the Stabroek block with the oil major. “We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved,” an Exxon spokesman saidin a statement.
Chevron will now take over Hess’s assets in the U.S. and Guyana. “The combination enhances and extends our growth profile well into the next decade,” Chevron’s CEO Mike Wirth said about the completion of the acquisition.
Until the recent acquisition, it was highly uncertain where Chevron’s domestic oil production was going to come from. The amount Chevron can potentially extract from its oil and gas fields fell to 9.8 billion barrels at the end of last year, the lowest point in at least a decade. Following the acquisition, Chevron’s production volumes are expected to reach around 4.31 million bpd by 2030, compared to 3.3 million bpd in 2024.
As President Donald Trump encourages higher levels of oil and gas output from U.S. companies in the coming years, several oil firms have assessed the potential for expanding operations, both at home and abroad. By solidifying its stake in Guyana, Chevron can now be sure of the future of its oil supply, as it will reap the rewards of the shared production operations of the South American country’s vast untapped reserves.
David Byrns, a portfolio manager at American Century Investments, explained that “[Chevron’s] acquisition plugs a free cash flow hole that Chevron had looming at the end of this decade into the 2030s.” Byrns said that it was previously uncertain how Chevron would maintain free cash flow.
Guyana presents a great new oil perspective from companies looking to tap into untouched reserves, as other oilfields in several parts of the world mature. In recent years, companies operating in Guyana have made several promising discoveries. Exxon began exploratory drilling with CNOOC and Hess around a decade ago, and it now estimates Guyana’s oil reserves to stand at around 11 billion barrels.
Exxon began producing oil from these reserves in 2019 and now has an average output of 650,000 bpd. By 2027, the company expects to achieve an output of 1.3 million bpd, and by 2030, this figure should rise to 1.7 million bpd, which would make the tiny country of Guyana one of the world’s largest oil producers per capita.
Chevron had faced months of challenges up to the acquisition, which resulted in widespread global layoffs. The oil firm has experienced serious safety failings in its Angola operations. It also lost oil exports from Venezuela, as the state-owned company PDVSA suspended most of the loading windows it had assigned to Chevron in April and ordered the return of some oil cargoes bound for the U.S. due to payment uncertainty related to the enforcement of U.S. sanctions. These disruptions have caused Chevron shares to fall by 7.5 percent over the last year.
Chevron’s acquisition of Hess will allow the U.S. oil major to pump oil domestically and abroad for decades to come, should the global demand for fossil fuels remain high enough to warrant it. Its new assets will also help the firm to become more competitive with other oil majors, such as Exxon, after several months of challenges and stock price decline.
By Felicity Bradstock for Oilprice.com
