Ties between California and Venezuela go back more than a century with Chevron

Was it a spectacular drug bust? A big, beautiful business opportunity? Both? Whatever you call President Trump’s stunning military intervention in Venezuela over the weekend, one company with deep California ties stands to benefit: Chevron.

That’s because Venezuela has the largest proven oil reserves on the planet and Chevron — the international petroleum conglomerate with a massive refinery in El Segundo and headquartered, until recently, in San Ramon — is the only foreign oil company that has continued operating in Venezuela through decades of socialist revolution.

Other major oil companies, including ConocoPhillips and Exxon Mobil, pulled out of Venezuela in 2007 when then-President Hugo Chávez required them to surrender majority ownership of their operations to the country’s state-controlled oil company, PDVSA.

But Chevron remained, playing the “long game,” according to industry analysts, hoping to someday resume reaping big profits from the investments the company started making there almost a century ago.

Venezuela is like Chevron’s “high-school sweetheart,” said Paasha Mahdavi, an associate professor of political science at UC Santa Barbara. “They’ve found a way to stay there through thick and thin.”

Looks like the company’s patience might finally pay off.

At his news conference Saturday, after U.S. special operations forces snatched Venezuelan President Nicolás Maduro and his wife in Caracas and extradited them to face drug-trafficking charges in New York, President Trump said the U.S. would “run” Venezuela and open more of its massive oil reserves to American corporations.

“We’re going to have our very large U.S. oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said during a news conference Saturday.

Although oil industry analysts temper expectations by warning it could take years to start extracting significant profits given Venezuela’s long-neglected, dilapidated infrastructure — and ordinary Venezuelans worry about the proceeds flowing into the pockets of U.S. investors — there’s one group who could be forgiven for jumping with unreserved joy: Chevron insiders who championed the decision to remain in Venezuela all these years.

But the company’s official response to the turn of events has been poker-faced.

“Chevron remains focused on the safety and well-being of our employees, as well as the integrity of our assets,” spokesman Bill Turenne emailed The Times on Sunday, the same statement the company sent to news outlets all weekend. “We continue to operate in full compliance with all relevant laws and regulations.”

Turenne did not respond to questions about the possible financial rewards for the company stemming from the U.S. military action.

Chevron, which is a direct descendant of a small oil company founded in Southern California in the 1870s, has grown into a $300-billion global corporation. It was headquartered in San Ramon, just outside San Francisco, until executives announced in August 2024 that they were fleeing high-cost California for Houston.

Texas’ relatively low taxes and light regulation have been a beacon for many California companies, and most of Chevron’s competitors are based there.

Chevron began exploring in Venezuela in the early 1920s, according to the company’s website, and ramped up operations after discovering the massive Boscan oil field in the 1940s. Over the decades, it grew into Venezuela’s largest foreign investor.

The company held on over the decades as Venezuela’s government moved steadily to the left; it began to nationalize the oil industry by creating a state-owned petroleum company in 1976, and then demanded majority ownership of foreign oil assets in 2007 under Chávez.

Whereas other companies fled Venezuela and filed grievances with international governing bodies — essentially suing in an attempt to recover their seized assets — Chevron stayed and made a series of deals with the Chavez and Maduro governments.

The company has also made deals with the Trump and Biden administrations to secure licenses to continue operations in Venezuela despite U.S. sanctions.

By the latest published figures, Chevron is now in a 39%-61% revenue split with the Venezuelan government on the oil produced by its largest project in the country. But Chevron’s take is actually far lower than that when you factor in other taxes and royalties tacked on by Maduro’s government.

If Chevron could get a better deal after the U.S. military intervention — maybe a 50-50 split with lower taxes and fees — it could easily double its return, Mahdavi said.

“In Chevron’s eyes, that would make it very much worth the wait,” Mahdavi said.

Venezuela has oil reserves of about 303 billion barrels, more than the next most oil-abundant nation, Saudi Arabia, according to the U.S. Energy Information Administration.

But even with those massive reserves, Venezuela has been producing less than 1% of the world’s crude oil supply. Production has steadily declined from the 3.5 million barrels per day in 1999 to just over 1 million barrels per day now.

Currently, Chevron employs about 3,000 people and produces between 250,000 and 300,000 barrels of oil per day, according to published reports.

That’s less than 10% of the roughly 3 million barrels the company produces from holdings across the globe, from the Gulf of Mexico to Kazakhstan and Australia.

Trump has made no secret about his willingness to help U.S. oil companies “drill, baby, drill” — so long as they serve his interests.

Stumping for a second term in office in 2024, Trump met with some of the nation’s top oil executives and told them if they raised $1 billion for his campaign, he would relax environmental regulations and take other steps to help their businesses, according to the Washington Post, which first reported the candidate’s remarks. Executives from Chevron and Exxon were among those who reportedly attended the gathering.

Yet pumping more Venezuelan oil carries political risks for Trump. The global market already has more supply than demand, so further production could depress oil prices. That would be welcome news for U.S. motorists, but bad news for U.S. producers, whom Trump pledged to help during his presidential campaign.

The Associated Press contributed to this report.