Pentagon-backed NABEP aims to overtake Chevron's Venezuelan oil output

Chevron signs $7 billion Venezuela deal as Pentagon-backed rival scales up

North American Blue Energy Partners is racing to overtake Chevron as Venezuela’s largest private oil producer, a position the U.S. major has held for years through decades of political uncertainty and U.S. sanctions.

The Pentagon-backed company, led by Venezuelan businessman Alejandro Betancourt, currently produces roughly 220,000 barrels a day in Venezuela — second to Chevron’s roughly 280,000 — and is expected to surpass Chevron’s output by the end of this year or early next, according to people familiar with NABEP’s operations. NABEP has set an ambitious longer-term goal of 500,000 barrels a day by late 2028.

Under a deal announced last month, the U.S. Department of Defense holds a 35% passive stake in NABEP and has preferential rights to purchase 20% of its production at cost. The company secured rights to 17 oil fields said to contain 65 billion barrels of oil — roughly one-fifth of Venezuela’s proven reserves — through the deal. It is expected to reap substantial production gains in its more developed fields in a relatively short amount of time.

“NABEP is increasing oil production for the Western Hemisphere, as promised,” a company spokesman said. “We are only in a race against ourselves.”

The Pentagon-backed challenger has assembled the equipment to scale up rapidly. NABEP said it has lined up 60 drilling rigs, 30 steam boilers that generate hot steam to move heavy oil, and 70 pieces of heavy equipment. Two drilling rigs were scheduled to depart Houston on Monday aboard a cargo vessel called the BBC Washington for a six-day voyage to Venezuela, the company said.

Under Betancourt, NABEP became the second-largest private producer in Venezuela in roughly two years, boosting its output elevenfold. Oil experts project NABEP could add another 180,000 barrels a day over the coming year. The company faces structural challenges — Venezuela’s oil fields are dilapidated after decades of mismanagement and corruption, analysts said — but for a private company navigating the terrain, NABEP is moving at unusual speed, people familiar with its operations said. Chevron isn’t expected to raise production as quickly.

A day after the White House officially announced the Pentagon’s stake in NABEP, Chevron chief Mike Wirth signed a separate agreement in Caracas to pour $7 billion into Venezuelan oil fields over five years through the company’s joint ventures with state-run Petróleos de Venezuela, the country’s biggest producer. Chevron said it will take on two new oil fields and hopes eventually to more than double its Venezuelan output to 600,000 barrels a day; it plans to more than double its drilling rigs there as well.

At an energy conference in Austin, Texas, earlier this month, Wirth framed the investment as financed from revenue the joint ventures generate, rather than cash from outside the country. Asked what would prompt additional outside capital, he said the industry was looking for evidence Venezuela has become “a better investment environment.”

“I think some of that likely eventually becomes elections that the world supports the outcomes on,” Wirth said. “I think people are going to look for tangible signs, and they’ll look at companies like ours that are maybe taking more risk to see how it works out for us.”

Chevron has three joint ventures with PDVSA and has navigated decades of political uncertainty to remain Venezuela’s largest foreign investor. The company stayed after the government of Hugo Chávez nationalized the oil industry in 2007, a decision that prompted rivals Exxon and Conoco to exit. Chevron also worked through multiple rounds of U.S. sanctions and, in 2018, the kidnapping of two of its executives, who were held for two months by the Maduro government.

Both the Trump and Biden administrations regularly discussed Venezuela’s political and economic fortunes with Wirth, the Journal reported. The CEO and others at Chevron repeatedly told officials that the U.S. and Venezuela benefited from allowing an American company to keep pumping the country’s oil. One such conversation occurred in 2024, a few days after Maduro lost the presidential election but declared victory anyway. Chevron’s pole position in Venezuela garnered it some measure of political esteem in Washington and Caracas.

Privately, Chevron executives have expressed skepticism that NABEP can reach its output targets as quickly as outlined, and some therefore do not view Betancourt’s company as a threat to Chevron’s place in Venezuela’s pecking order, according to people close to Chevron. Exxon and Conoco are not active in Venezuela but have been evaluating prospects there.

Executives at the three American majors have privately said the presence of a U.S.-backed company in Venezuela could create an uneven playing field and discourage investment, people close to the industry said.

“For all international oil companies getting into Venezuela, it’s concerning that this deal might generate additional political risk instead of reducing it, which is supposed to be the intended objective,” said Francisco Monaldi, director of the Latin America energy program at the Baker Institute at Rice University.