Chevron, Shell Close In on Landmark Oil and Gas Deals in Venezuela

Political Reset and a $100 Billion Bet on Venezuela

Venezuela’s energy opening follows the capture and removal of President Nicolás Maduro, which ended years of strained relations with Washington and cleared the way for a rapid policy reset in the country’s oil and gas sector.

Backed by President Donald Trump, the White House has laid out a framework for at least $100 billion in investment by U.S. and allied oil companies to rebuild Venezuela’s deteriorated energy infrastructure and unlock its vast reserves.

The administration has framed the initiative as a dual‑benefit strategy: stabilizing Venezuela’s economy while bolstering long‑term oil supply security for North America and key global markets.

Trump has publicly promised “total safety” for participating firms and signaled that the U.S. government will closely manage which companies receive authorization to operate in the country.

For oil majors, that combination of political backing and legal clarity is central to sanction‑risk management and capital allocation decisions.

Chevron’s Push in the Orinoco Belt: Ayacucho 8 and Petropiar Expansion

Chevron has agreed preliminary terms with Venezuelan authorities to expand Petropiar, its largest project in the country, in the heavy‑oil‑rich Orinoco Belt.

Under the expected deal, Chevron would secure rights to develop the Ayacucho 8 block, a large, largely undeveloped area located just south of the existing Petropiar operations and containing proven extra‑heavy oil resources.

This would likely become Chevron’s fifth oil area in Venezuela and could turn the company into the country’s largest private producer in the Orinoco region, which holds over three‑quarters of Venezuela’s total crude reserves.

Chevron is also seeking a reduced royalty rate and preferential tax and trade incentives available under Venezuela’s new legislation for greenfield oil and gas projects, aiming to improve project economics and accelerate payback.

From an operational perspective, Chevron and state‑owned PDVSA could extend Petropiar’s existing well‑cluster production system into Ayacucho 8, enabling a relatively rapid ramp‑up of output once investment decisions are finalized.

Increased volumes of extra‑heavy crude from Petropiar and Ayacucho 8 would feed export markets, particularly U.S. Gulf Coast refiners configured to handle heavy and sour grades.

Shell’s Strategy: Carito, Pirital, and the Dragon Gas Project

In parallel, Shell has signed preliminary agreements to develop the Carito and Pirital fields in the Monagas North region, as well as to advance the offshore Dragon gas project in Venezuelan waters.

Carito and Pirital produce light and medium crude along with associated natural gas, which is crucial for blending Venezuela’s extra‑heavy Orinoco crude into exportable grades that meet refinery specifications.

Shell’s onshore Monagas investments are expected to support incremental liquids production, enhance local gas availability, and improve the quality and marketability of Venezuelan exports.

Offshore, Shell is moving ahead with the Dragon gas field, a long‑delayed project that holds an estimated 4.5 trillion cubic feet of natural gas and has faced years of setbacks due to shifting U.S. policy and sanctions.

Recent U.S. general licenses for oil and gas exploration in Venezuela have unlocked the ability for Shell to progress Dragon toward a final investment decision.

Current plans envision first gas from Dragon to Trinidad and Tobago by the third quarter of 2027, feeding the Atlantic LNG export complex, which is jointly owned by Shell, BP, and Trinidad’s National Gas Company.

Additional gas volumes from Dragon are intended to help offset recent gas shortages in Trinidad that have kept Atlantic LNG running below its 12‑million‑ton annual capacity.

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Shell Signs Oil and Gas Agreements with Venezuela to Advance Dragon Gas Project

To execute its Venezuela strategy, Shell has signed cooperation agreements with engineering firms Vepica and KBR, as well as oil‑services provider Baker Hughes, covering project engineering, field development, and workforce training.

Those partnerships are designed to bridge Venezuela’s skills and technology gaps after years of underinvestment and loss of technical personnel.

How the Deals Fit Trump’s Venezuela Energy Strategy

The Chevron and Shell moves align closely with the Trump administration’s broader Venezuela energy strategy, which prioritizes rapid restoration of production capacity under U.S. influence.

Trump has said U.S. and partner companies will invest “at least $100 billion” of private capital to rebuild Venezuela’s upstream, midstream, and refining infrastructure.

He has also claimed that, taken together, Venezuela and the United States hold roughly 55% of global oil resources, using that figure to underscore the strategic importance of securing Venezuelan barrels.

As part of the new framework, Venezuelan authorities have agreed that the United States can immediately begin refining and selling tens of millions of barrels of Venezuelan crude, with proceeds managed under U.S. oversight to ensure they benefit Venezuelan citizens and U.S. consumers.

In practice, that arrangement is expected to prioritize supply to U.S. refiners and help moderate domestic fuel prices over the medium term.

At the same time, the policy leaves open questions about long‑term governance, debt restructuring, and how incoming investment will be balanced against environmental and social considerations in a country with a recent history of economic collapse and institutional fragility.

What It Means for Oil Markets and Geopolitics

If Chevron’s Ayacucho 8 development and Shell’s Monagas and Dragon projects proceed on schedule, Venezuela could add meaningful new barrels and gas volumes into global markets over the next three to five years.

On the oil side, higher flows of extra‑heavy crude from the Orinoco Belt would give refiners another source of heavy feedstock at a time when supplies from countries like Mexico and some OPEC producers have declined.

That dynamic could marginally ease tightness in heavy‑sour markets and potentially narrow differentials between benchmark light crudes and heavier grades.

On the gas side, Dragon’s exports to Trinidad would support Atlantic LNG’s utilization, reinforcing Caribbean LNG supply into the Atlantic Basin and potentially freeing up other regional gas volumes for domestic use or alternative export projects.

For Trinidad and Tobago, securing Venezuelan gas is central to sustaining a critical pillar of its economy; for Shell, it is a way to optimize a key LNG asset with underused capacity.

Strategically, the deals further entrench U.S. and allied energy companies in a country that was, until recently, closely aligned with Russia, Iran, and China.

Reopening Venezuela to Western capital and technology may also influence OPEC+ dynamics over time, as incremental Venezuelan barrels re‑enter the system under a very different geopolitical umbrella than a decade ago.

Snapshot: Chevron vs. Shell in Venezuela