Chevron, the only US oil company with a major presence in Venezuela, announced on Wednesday that it has been assigned additional acreage in the Orinoco Belt. This expansion includes two adjacent areas in the Carabobo region, where the company has an established position.

Chevron’s Century-Long Presence in Venezuela

Chevron’s history in Venezuela spans more than a century, and its expanded position reflects confidence in the country’s deep resource potential and its ability to compete for investment within the company’s portfolio for decades, according to Chevron CEO Mike Wirth. He made the remarks in a statement released by the company.

The announcement comes just days after US President Donald Trump revealed an rare deal involving a fifth of Venezuela’s oil reserves; Under the deal, the US government took an equity stake in a private oil firm operating in the country. Chevron’s expansion is separate from that initiative but aligns with Trump’s broader efforts to expand output in Venezuela.

Venezuela’s Oil Production Challenges

Venezuela has the world’s largest oil reserves, but its current output is only about 1.25 million barrels per day, down from more than 3 million barrels per day two decades ago. The decline follows years of mismanagement and underinvestment by state-run oil firm PDVSA and US sanctions.

According to US Energy Secretary Chris Wright, Venezuela’s total oil output is expected to reach 2 million barrels per day by the end of this decade. Chevron said its new agreements also provide enhanced fiscal, commercial, and legal terms to protect long-term investments; the company added that total production costs are expected to be less than $20 per barrel.

Chevron’s joint venture infrastructure is in good shape, and development in the new areas will build off of existing facilities and pipeline infrastructure. Wirth explained in a CNBC interview that the company’s ability to grow at low cost is quite different from what would be required in a greenfield area that lacks roads, water, and power.

Broader Energy Agreements in the Works

Along with Chevron, oil producer ENI, investor KEO Capital, and energy firm Primavera—cofounded by billionaire Fred Ehrsam to invest in Venezuela—are among the companies set to sign energy agreements in the country as soon as Wednesday, according to two sources close to the preparations who spoke to Reuters.

Most of these agreements imply project expansions that have been in negotiation as part of the migration of dozens of energy contracts to new terms under a sweeping oil reform approved in January. Wright, who arrived in Caracas late on Tuesday, and Venezuela’s oil minister, Paula Henao, are expected to oversee the signing of the contracts, according to officials.

Following the US administration’s move in January to transition former President Nicolas Maduro out of office, Trump pushed a $100bn reconstruction plan for Venezuela’s energy sector. The plan encourages US oil companies to invest in the country.

While Chevron’s Venezuela operations have continued uninterrupted for at least 100 years, fellow oil producers ExxonMobil and ConocoPhillips exited the country in 2007 when their assets were nationalised under the previous government of President Hugo Chavez. They have since remained on the sidelines.

Chevron has operated in Venezuela since 1923 and has three joint ventures in the country, Petroindependencia and Petropiar operate in the Orinoco Belt, while Petroboscan operates in western Zulia state. The additional Carabobo sites expand existing operations where joint ventures are increasing extra-heavy oil production, Chevron said.