California’s Chevron Stands to Benefit from US Intervention in Venezuela
As the world grapples with the implications of the US government’s sudden intervention in Venezuela, a California-based company with deep ties to the Golden State could emerge as one of the prime beneficiaries. Chevron, the international petroleum conglomerate with a massive refinery in El Segundo and formerly headquartered in San Ramon, has maintained its operations in Venezuela despite decades of revolution and political turmoil.
Venezuela boasts the largest proven oil reserves on the planet, with approximately 303 billion barrels, according to the US Energy Information Administration. Chevron, which began exploring in Venezuela in the early 1920s, has grown into the country’s largest foreign investor. The company’s decision to remain in Venezuela, even as other major oil companies such as ConocoPhillips and Exxon Mobil pulled out in 2007, may finally pay off.
A Long-Term Investment
Industry analysts describe Chevron’s strategy as playing the “long game,” hoping to someday resume reaping big profits from its investments in Venezuela. With the US government’s announcement that it will “run” Venezuela and open more of its massive oil reserves to American corporations, Chevron’s patience may be rewarded. President Trump stated that US oil companies will “go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country.”
While oil industry analysts caution that it could take years to start extracting significant profits due to Venezuela’s dilapidated infrastructure, Chevron insiders who championed the decision to remain in the country may be justified in their optimism. The company’s official response to the recent events has been measured, with a spokesman stating that Chevron “remains focused on the safety and well-being of our employees, as well as the integrity of our assets.”
A Complex History
Chevron’s history in Venezuela dates back to the 1920s, and the company has navigated the country’s shifting political landscape, including the nationalization of the oil industry in 1976 and the demand for majority ownership of foreign oil assets in 2007. Currently, Chevron’s operations in Venezuela employ approximately 3,000 people and produce between 250,000 and 300,000 barrels of oil per day.
According to some analysts, Venezuela could potentially double or triple its current output relatively quickly, leading to a significant windfall for Chevron. However, everyday Venezuelans worry about the proceeds flowing out of the country and into the pockets of US investors. As the situation continues to unfold, Chevron’s role in Venezuela will likely be closely watched.
For more information on the ties between California and Venezuela, which go back more than a century, with Chevron at the forefront, visit Here.
Image Source: www.latimes.com
