Chevron CEO Mike Wirth Talks Venezuela JV, Hormuz Flows

**SPEAKER_1** (0:02)
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**Tyler Kendall** (0:07)
I'm Tyler Kendall, here in Venezuela, and pleased to say I am joined now by the Chevron CEO, Mike Wirth. Mr. Wirth, thank you so much for joining us here today on a day of some pretty massive news for your company. Seven billion dollars in investment to help bolster production in Venezuela. Let's just start with the basics. What is the condition that these fields are currently in terms of the infrastructure and how quickly will it take Chevron to get it up to the standard that you need it to be?

**Mike Wirth** (0:35)
Well, this is a win-win-win, really. It's a win for American and regional energy security. It's a win for US refiners who really prefer this type of crude oil. It's a win for the Venezuelan economy to see the investment that will be made. We've been here for a hundred years, so we're part of the past in this country. We're here today with jobs and investment, and we're really pleased that we've reached these agreements that will allow us to invest $7 billion through three different joint ventures over the next five years to more than triple production from where it was the year before President Trump came into office. So we have good facilities, we have good people, and through the last several years, when things have been more difficult, we've been able to maintain our assets, we've been able to invest and actually grow production from a flow of about 40,000 barrels a day to over 250 today, and we're on our way, as I said, to over 600,000 by 2031

**Tyler Kendall** (1:32)
So 600,000 by 2031, but broadly speaking, I've heard you say that this could be for decades and decades of development. Can you share just how much reserves are under these specific fields that are in this deal?

**Mike Wirth** (1:46)
Yeah, so we're doing a lot of technical work right now, as we've added some acreage to our portfolio to do the engineering assessments, to really characterize the size of the resource. I'll just say it is many billions of barrels. And so it's heavier oil, which takes some different technologies to produce.
But over time, that production will last here for decades. This is not for a few years. This will last for decades.

**Tyler Kendall** (2:08)
Seven billion dollars, that's a pretty big number. It's the most that we've seen an oil major commit to Venezuelan production since Nicolas Maduro's ouster. Can you just give me a little bit more detail on where that investment is coming from? Is this split with the joint venture partner? And then also, how are you thinking about CapEx? Are you changing anything in terms of your outlook in order to accommodate this Venezuelan investment?

**Mike Wirth** (2:33)
So the seven billion dollars is a hundred percent basis. So it's the three joint ventures. It's us and the state company, PEDAVASA, who is our partner here, who will make those investments over a period of time.
Our capital guidance to our investors is unchanged. We've accounted for this in our forward guidance and our forward planning. And so our overall capital spending won't change. We've got room for this as part of that plan.

**Tyler Kendall** (2:55)
And as you make these plans, of course there is always risk. And you said this morning that there are, quote, significant protections built into this deal. Can you give us any more detail on what that will look like, including whether you got any assurances from the US government?

**Mike Wirth** (3:10)
Well, I can't share the details of these contracts, but I will tell you that as important as the commercial and fiscal terms were the legal terms and the protections for investors, which is an issue that we deal with in many, many countries around the world. And so we have provisions in there that are very strong relative to other contracts as it relates to resolving disputes, ensuring that the tax and royalty regime that we've agreed to and will invest under isn't changed on us. And so there are very strong legal protections in Venezuela and beyond that are part of this deal that give us the confidence to make this investment.

**Tyler Kendall** (3:49)
A senior US official told me that a big part of today, your announcement, the government's announcement, is a bid to try to convince other companies to boost Venezuelan oil production. Can you just give me some clarity here? Why is it safer now to invest in Venezuela?

**Mike Wirth** (4:04)
Well, the first thing is it's more economic.
And under the prior rules, it was very difficult to get a competitive return on investment here in Venezuela. And so I think that was hurdle number one.