Venezuela Unveils Strategy to Preserve Oil Production Without Chevron

According to internal documents obtained from Venezuela’s state oil company PDVSA, the firm has created three operational scenarios to maintain oil production after Chevron’s license expires in April.

The Venezuelan oil giant aims to continue producing between 105,000 and 138,000 barrels per day of Hamaca heavy crude at the Petropiar project. PDVSA plans to split crude output between domestic refineries and export markets outside the United States.

The company will process some vacuum gasoil byproducts to produce low-octane gasoline for domestic consumption. This strategy aims to minimize disruption from the departure of the American oil major.

The state-owned company faces several technical challenges in maintaining operations. PDVSA will recycle a larger portion of imported naphtha and supply additional diluents from its Paraguaná refining complex.

These measures seek to prevent shortages of essential materials needed for heavy oil production. Chevron currently contributes approximately $200 million monthly to Venezuela’s economy through its operations.

The American company handles about 25% of Venezuela’s oil production through various joint ventures with PDVSA. Analysts expect Venezuela’s total oil output to drop from 900,000 to 700,000 barrels per day after Chevron’s departure.

Venezuela’s Oil Industry Decline and Economic Impact

Venezuela’s oil industry has experienced dramatic decline over recent years. Production fell from a peak of 3.2 million barrels per day in its prime to current levels below 1 million barrels.

This decrease stems from years of underinvestment, mismanagement, and international sanctions. Economists predict significant economic consequences for Venezuela from this transition.

The country may face inflation exceeding 100% by the end of 2025 and minimal economic growth. The Maduro government actively seeks new partnerships with countries including Turkey, India, and China to offset Western companies’ departure.

The loss of Chevron‘s expertise and resources may impact PDVSA’s ability to maintain equipment and oil wells. Global oil markets could see tighter supplies of heavy crude, potentially driving up prices. U.S. refiners now must find alternative sources like Canadian heavy crude, which carries a 10% import tax.

President Maduro remains defiant about the situation, stating that no international threats intimidate Venezuela. His government pursues what he calls an “Absolute Productive Independence Plan” to counter the effects of Chevron’s departure.