Chevron Thrives in Venezuela Despite Threats by Trump

The Trump administration has doubled the bounty on Venezuela’s autocratic leader, calls him a “narcoterrorist” and is now threatening military strikes on Venezuelan soil.

But even as pressure builds on President Nicolás Maduro, he has found a pillar of support in one of the largest American oil companies.

Venezuelan oil exports climbed in September to a five-year high, driven in part by the resumption of Chevron’s work in Venezuela after a short ban by the Trump administration.

“I want Chevron here for another 100 years,” Mr. Maduro said after Chevron got a U.S. permit to restart pumping oil. The company has been in Venezuela since 1923.

Chevron’s oil exports are again channeling hard currency into Venezuela’s fragile economy, spotlighting the unusual standing an American capitalist icon enjoys in a country led by self-proclaimed socialists who have expropriated the assets of hundreds of other companies.

Chevron’s operations constitute nearly a quarter of Venezuela’s oil production. In the last two years, Chevron has accounted for as much as 80 percent of the growth in Venezuela’s oil output, said Francisco J. Monaldi, a Venezuelan oil expert at Rice University.

Given Venezuela’s overwhelming reliance on oil exports, economists say Chevron’s operations are allowing Venezuelan officials to spend at least some revenues on basic necessities like food and medicine.

“Oil revenues are what feeds Venezuela,” said Francisco Rodríguez, a Venezuelan economist. Chevron, he said, is helping prevent Venezuela from sliding back into the kind of humanitarian crisis that in recent years led millions to flee the country.

Chevron defended its record in Venezuela.

“We believe our presence continues to be a stabilizing force for the local economy, the region and U.S. energy security” said Bill Turenne, a Chevron spokesman.

Chevron’s prominence in Venezuela’s economy could help it gain from the outcomes of the standoff between Washington and Caracas. The company has seemingly cracked the code of working with Mr. Maduro, as well as maintaining good relations with the Trump administration. But if Mr. Maduro’s government falls, Chevron’s Venezuelan foothold might give it a competitive advantage in what would probably be a boom in oil investment.

In Washington, presidents from both parties have allowed Chevron to continue sending varying amounts of oil from Venezuela to American refineries, keeping the oil trade between the United States and Venezuela alive. Known for its lobbying muscle, Chevron this year hired the lobbying firm of Brian Ballard, a top Trump fund-raiser.

The immense potential of Venezuela’s oil fields has meant that Chevron has been willing to accept periodic setbacks and reputational risks.

Chevron has faced production interruptions, and Venezuela’s debt with the company at one point reached $3 billion. Venezuela has also jailed Chevron employees over contract disputes.

The oil giant’s ability to keep operating in Venezuela also reflects an argument made by some in Washington that if the company is barred from pumping oil its Venezuelan assets could fall into China’s hands. That notion has been amplified by Laura Loomer, a key Trump supporter and social media influencer.

Chevron’s current upswing in Venezuela comes after the Trump administration — under pressure from Secretary of State Marco Rubio, who supports pursuing a hard line against Mr. Maduro — canceled a previous license in March that allowed the company to export Venezuelan oil.

As a result, Venezuela’s oil exports to the United States plunged 90 percent in July from the previous month, according to U.S. government figures.

U.S. officials then crafted a new license, which has not been made public but has been widely reported, to make it more restrictive by barring Chevron from routing hard currency from exports directly into Venezuela’s banking system, according to a person familiar with the deal who was not authorized to disclose the terms.

But oil analysts and economists say that both Chevron and Venezuela still benefit from the new agreement.

Chevron’s prominence has placed it in the unusual position of being an American company praised by Mr. Maduro and his socialist allies, who see in it an important ally.

“Chevron’s importance is fundamental because it provides financing and technology,” said Willian Rodríguez, a pro-Maduro legislator, emphasizing the company’s expertise in reactivating wells that are complex to operate.

On the other hand, Chevron’s willingness to work with Venezuela’s government has opened it to attacks from opposition figures who see the company as bolstering the country’s autocratic leadership.

“Chevron has done everything possible to undermine the struggle for democracy in Venezuela,” said Pedro Mario Burelli, a former board member of the state-owned oil company, Petróleos de Venezuela.

Chevron’s role in shoring up Venezuela’s economy stretches back to a bet it made nearly two decades ago, when Hugo Chávez, then president, went on a campaign to nationalize foreign-owned oil assets.

Rivals like ExxonMobil and ConocoPhillips chose to leave Venezuela. But Chevron did not, basking in the warm rapport that Ali Moshiri, an Iranian-born Chevron executive, had at the time with Mr. Chávez.

A key factor in Chevron’s decision was a long-term view that the company should ride out any turbulence to remain in a country that has among the world’s largest proven crude oil reserves.

As Chevron finds itself in the unusual position of connecting two countries in conflict, Mr. Moshiri, who now runs an independent oil company in Houston, said he hoped Chevron’s Venezuelan operations could be a source of shared interests and potentially ease bilateral tensions.

“I’m very proud of what Chevron has done, and I’m very proud of Chevron being an instrument between the two governments to reach a solution,” Mr. Moshiri said in a telephone interview.

Chevron is no stranger to complicated arrangements. Industry veterans draw a parallel with Chevron’s operations in Marxist-led Angola in the 1980s, when Cuban troops guarded its assets against anti-communist rebels supported by the United States.

Crucial to Chevron’s success in Venezuela is its technical expertise in a region called the Orinoco Belt, where the oil is thick and heavy in sulfur, requiring specialized refining.

“If the oil were easy to produce, the Venezuelans would do it themselves,” said Edward Chow, a former Chevron executive who explored opportunities in Venezuela in the 1990s.

While Chevron remained in Venezuela, mismanagement, ideological purges, sanctions and graft in the broader oil industry led overall production to decline. Chinese and Russian oil ventures weren’t able to lift production to Chevron’s levels.

Sanctions on Venezuela during the first Trump administration constrained Chevron. But after Russia invaded Ukraine, the Biden administration allowed Chevron to restart oil exports from Venezuela to ease fears over global oil supplies.

Spain’s Repsol and Italy’s ENI got similar licenses under President Joseph R. Biden Jr., but the Trump administration has not granted them new ones, effectively strengthening Chevron’s position.

Chevron still faces risks. The Trump administration could change course, using threats to halt Chevron’s operations to extract concessions from Mr. Maduro.

Mr. Monaldi, the oil expert at Rice, also cited a growing “reputational cost” as Chevron faces criticism over its willingness to work with Venezuela’s government.

However, he added, it seemed unlikely Chevron would pay a steep price, emphasizing the company’s role in reviving Venezuela’s economy if a political transition takes place.

Opposition leaders “will have to swallow any hate for Chevron,’” Mr. Monaldi said, “and basically negotiate with them to invest very quickly.”

Julie Turkewitz contributed reporting from Bogotá, Colombia.