An internal Chevron plan to increase Venezuelan oil production to 200,000 b/d by mid-2023 relies on efforts to rehabilitate some 18,000 wells in various states of disrepair in the country’s once-prolific Occidente region.
By Argus Media – Carlos Camacho
Dec 21, 2022
According to a report from Venezuela state-owned PdV obtained by Argus, about 7pc of existing wells in Occidente are operating. The 1,400 or so “Category 1” wells are producing oil, but many at declining rates.
About 8,700 wells fall into Category 2, which includes non-operating wells that may just need minor work to become operational. These wells may need around $500,000 each in new investment to be viable, according to sources familiar with the field.
In Category 3 are more than 7,900 wells that need between $5mn-$6mn of investment each to be commercially viable.
Hundreds of wells in the PdV report are reportedly shut down just for a lack of reliable electricity, which plagues many parts of the country. Many more have been stripped bare of any surface equipment by thieves.
Production in Occidente has declined from 150,000 b/d earlier this year to around 90,000 b/d in November.
Much of Chevron’s work in Venezuela has been curtailed in recent years by US sanctions. The US eased some sanctions in late November when the government agreed to resume talks with the opposition about new elections, which will allow Chevron to sell crude from its Venezuela joint ventures.
Chevron was expected to send its first cargo of Venezuelan crude to a US Gulf coast refiner since 2018 by the end of December, but it is not yet clear if that will happen. Government officials are anxious to send a symbolic message with a cargo before the new year, while Chevron appears less concerned with rushing any shipments.
Chevron plans to increase its global spending in 2023 to $17bn, up from around $15bn in 2022, but has not disclosed any specific plans for Venezuela.
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