Chevron Invests $2bn In Venezuelan Oil

Courtesy of The Financial Times, a report on Chevron’s recent decision to invest $2bn in Venezuelan oil:

While many inhabitants of Venezuela’s north-western state of Zulia are screaming blue murder about the onset of petrol rationing, US oil major Chevron has quietly just agreed to invest $2bn to ramp up production in the region.

Chevron’s announcement is good news for Zulians. Oil production in and around the state’s Lake Maracaibo, once the jewel in the crown of Venezuela’s vast oil reserves, has been declining for years.

Venezuela has the largest oil reserves in the world. The bright future of oil production in the country is focused in the vast extra-heavy crude reserves on the north bank of the Orinoco river.

This is a source of concern for Zulians. After profiting handsomely for decades during their region’s oil boom, their glory days are over. Venezuela’s first oil was discovered there, and the blowout in 1922 of the Barroso No 2 well on the far side of the lake from the city of Maracaibo marked the beginning of Venezuela’s modern history as a major oil producer.

Lately, though, the oil industry in Zulia has lagged, with a lack of investment in its mature oil fields largely responsible for production falling by as much as half in the last decade – some say more. The expropriation of dozens of oil service companies in 2009 made matters even worse.

So attempts by Chevron to revert the problem – doubtless with a bit of arm-twisting from Hugo Chávez’s revolutionary government – should be some solace for Zulians.

Goodness knows they need it – it must certainly be irksome to be told, after their region (which most Zulians would probably be happy to see independent) has provided the rest of the nation with its oil wealth for decades, that their petrol consumption needs to be regulated while people in the rest of the country can carry on using as much as they like.

This entry was posted on Thursday, July 19th, 2012 at 6:42 pm and is filed under Venezuela.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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