Chevron Plans Venezuelan Output Push to 400,000 Barrels a Day by 2028, Grid Failure the Obstacle
Record Q2 earnings and an $8.4bn debt paydown back Chevron's 400,000 b/d Venezuela target, but grid failure threatens more than 95% of its Orinoco wells.
Chevron posted record second-quarter earnings on Friday (2026-07-31), with adjusted earnings of $6.06 a share, 41 cents above the Bloomberg survey consensus, as group-wide production surged 20% to 4.07 million barrels of oil equivalent a day. Bloomberg has reported the company intends to lift Venezuelan output from 280,000 to 400,000 barrels a day by 2028, a 43% increase from a joint venture that operates in partnership with PDVSA, Venezuela's state oil company.5
ICE Brent crude front-month closed at $91.04 a barrel on Friday (2026-07-31), a price environment that makes Venezuelan heavy crude considerably more attractive than during the deepest sanctions period. The Q2 windfall also allowed Chevron to cut net debt by a record $8.4 billion, which the company said reinforced "the company's ability to fund the long-term investment needed to deliver reliable energy for decades to come." That debt reduction, combined with elevated crude prices, gives the Venezuela expansion a financial backing it lacked two years ago.5
Venezuela produced 1.179 million barrels a day in May 2026, according to OPEC data sourced from the US-backed administration in Caracas, reflecting the broader opening set in motion by sweeping hydrocarbon reforms earlier in 2026.3 Those reforms cut royalties and taxes payable to Caracas and introduced stronger legal protections for privately-controlled drillers.3
The Economist in May 2026 reported that Chevron reckoned it could boost its then-240,000-barrel-a-day Venezuelan output by roughly half within two years, in joint production with PDVSA.1 Bloomberg's figure of 280,000 barrels a day as the current baseline suggests production climbed in the months since that assessment.
But the national power grid sits across the expansion path as a recurring constraint. More than 95% of Chevron's wells in Venezuela's Orinoco fields depend on the national grid, while less than 5% of rigs in the area run on generators, according to people familiar with operations.2 Hydro plants across Venezuela operate at just 60% of capacity, and thermoelectric plants at 20% of their potential, according to Miguel Lara, an energy adviser to foreign companies working in the country.2
The production impact of grid failures is direct. "Every time one of those major power failures occurs — the kind where everyone's refrigerator starts to suffer and our computers crash — just imagine what that does," one person familiar with Orinoco operations told Bloomberg.2
Caracas has responded by requiring incoming energy companies to supply their own power. New regulations instruct operators to bring portable generation capacity to shield wells from grid disruptions.2 How Chevron will comply in the Orinoco, and at what capital cost, has not been disclosed. The state-led joint venture Petrozamora, which accounts for as much as 8% of Venezuela's total oil output, is separately helping PDVSA upgrade the San Timoteo gas-powered plant, though the additional capacity and completion timeline remain unclear.2
Chevron's broader Q2 performance reinforces its operational momentum. US Gulf of Mexico and Kazakhstan assets both raised output during the quarter, and integration of Hess Corporation's portfolio, acquired in a $55 billion deal last year, added further production. US refineries ran at above 97% utilization, and profit from US fuel-making reached $2.4 billion, more than 10 times the prior quarter's return.5
Chevron shares were up about 23% for 2026 as of Friday (2026-07-31), though most of those gains came in the first six weeks of the year. Since the start of the US-Iran war, shares have advanced only about 3%, indicating the market priced much of the geopolitical windfall into the stock early.5
Venezuela's upstream sector has shifted from a regulatory challenge into an execution one, oilprice.com reported in July 2026, with services capacity and physical infrastructure now the primary constraints.4 Petrozamora's San Timoteo progress, Chevron's self-supply build-out, and the durability of the national grid under renewed load will be the signals to watch for any trader pricing Venezuelan barrels into 2028.2,4