The relationship between California and Venezuela goes back more than a century with Chevron

Was it a wonder drug? A great, great business opportunity? Both? Whatever you call President Trump’s dramatic military intervention in Venezuela this weekend, one company with deep ties to California stands to benefit – Chevron.

This is because Venezuela has the largest oil reserves in the world and Chevron – an international petroleum conglomerate with a large refinery in El Segundo and headquartered, until recently, in San Ramon – is the only foreign oil company that has continued to operate in Venezuela during decades of socialist revolution.

Other major oil companies, including ConocoPhillips and Exxon Mobil, pulled out of Venezuela in 2007 when then-President Hugo Chávez demanded that they cede majority ownership of their operations to the country’s state-controlled oil company, PDVSA.

But Chevron remained, playing the “long game,” according to industry analysts, hoping to one day reap the big returns on the investments the company began making there nearly a century ago.

Venezuela is like Chevron’s “high school sweetheart,” said Paasha Mahdavi, associate professor of political science at UC Santa Barbara. “They have found a way to stay there through thick and thin.”

It looks like their patience may pay off in the end.

In his press conference on Saturday, after US Special Forces kidnapped Venezuelan President Nicolás Maduro and his wife in Caracas and brought them back to face drug trafficking charges in New York, President Trump said the US will “run” Venezuela and open up more large oil reserves to US corporations.

“We’re going to have our biggest oil companies in America, the biggest in the world, come in, spend billions of dollars, fix the broken infrastructure, the oil infrastructure, and start making money for the country,” Trump said during a news conference on Saturday.

While oil industry analysts are furious at the prospect, warning that it could take years to start reaping big profits given Venezuela’s long-neglected, dilapidated infrastructure — and everyday Venezuelans worry about the profits going into the pockets of American investors — there’s one group that can be forgiven for jumping with unreserved joy: Chevron insiders who championed all these decisions to stay in Venezuela.

But the company’s official response to the turn of events was poker-faced.

“Chevron remains focused on the safety and well-being of our employees, and the integrity of our assets,” spokesman Bill Turenne wrote to The Times on Sunday, the same statement the company sent to news outlets over the weekend.. “We continue to operate in full compliance with all relevant laws and regulations.”

Turenne did not respond to questions about potential financial rewards for the company stemming from this weekend’s US military action.

Chevron, a direct descendant of a small oil company founded in Southern California in the 1870s, has grown into a $300 billion global corporation. The company was headquartered in San Ramon, just outside of San Francisco, until management announced in August 2024 that they were fleeing more expensive California to Houston.

Texas’ relatively low taxes and easy regulation have been an indicator for many California companies, and many of Chevron’s competitors are based there.

Chevron began exploring in Venezuela in the early 1920s, according to the company’s website, and ramped up operations after discovering the large Boscan oil field in the 1940s. Over the past decades, it has grown to become Venezuela’s largest foreign investor.

The company continued for decades as the Venezuelan government slowly moved to the left; began nationalizing the oil industry by creating a state-owned petroleum company in 1976, then sought majority ownership of foreign oil assets in 2007 under Chávez.

While other companies fled Venezuela and filed complaints with international regulatory bodies — essentially suing in an attempt to recover their seized assets — Chevron stayed and made a series of deals with the governments of Chavez and Maduro.

The company has also made deals with the Trump and Biden administrations to obtain licenses to continue operating in Venezuela despite US sanctions.

According to the latest figures published, Chevron is now between 39%-61% of the revenue split with the Venezuelan government from the oil produced by its largest project in the country. But Chevron’s take is actually much lower than if you include other taxes and benefits received by Maduro’s government.

If Chevron can get a better deal following the US military intervention — perhaps a 50-50 split with lower taxes and fees — it could double its returns, Mahdavi said.

“In Chevron’s eyes, that will make it worth the wait,” Mahdavi said.

Venezuela has the world’s largest proven reserves of crude oil – meaning they are safe to tap – at about 303 billion barrels, according to the US Energy Information Administration.

But even with those huge reserves, Venezuela produced less than 1% of the world’s crude oil. Production has fallen slightly from 3.5 million barrels a day pumped in 1999 to just over 1 million a day now.

Currently, Chevron’s operations in Venezuela employ approximately 3,000 people and produce between 250,000 and 300,000 barrels of oil per day, according to published reports.

That’s less than 10% of the estimated 3 million barrels the company produces from assets spread around the world, from the Gulf of Mexico to Kazakhstan and Australia.

Trump did not hide that he is willing to help American oil companies “drill, baby, drill” – as long as they serve his interests.

Campaigning for a second term in office in 2024, Trump met with the nation’s top oil executives and told them that if they raised $1 billion for his campaign, he would loosen environmental regulations and take other steps to help their businesses, according to the Washington Post, which first reported the candidate’s remarks. Chevron and Exxon executives were among those who attended the meeting.

Yet pumping more Venezuelan oil has its own political risks for Trump. The global market already has more purchases than demand, so continued production could lower oil prices. That would be welcome news for American drivers, but bad news for American manufacturers, whom Trump pledged to help during his presidential campaign.

The Associated Press contributed to this report.