How Chevron secured its place as Venezuela’s largest foreign investor

The oil company is clinging to its role as the largest foreign investor in Venezuela, where it has operated for more than a century, as President Trump ratchets up his effort to squeeze strongman Nicolás Maduro.

The U.S. has amassed the biggest American military buildup in the Caribbean since the 1980s to exert pressure on Maduro, who Washington says is running a drug cartel financed by stolen oil. Trump ordered a blockade Tuesday of all sanctioned tankers moving crude in and out of Venezuela, leaving Chevron as one of last big shippers of the country’s oil.

Chevron and its chief executive, Mike Wirth, are familiar with the risks of operating in an authoritarian state in Washington’s crosshairs. Maduro’s regime has taken and released several American hostages over the years, including two Chevron executives for two months in 2018.

Yet Wirth has calculated his company has the means and resilience to outlast changing governments—in Caracas and Washington alike.

The potential reward is huge. Venezuela’s government says its proved oil reserves top 300 billion barrels, which, if true, would make its bounty the world’s largest.

“We play a long game," Wirth said last month at the U.S.-Saudi investment summit in Washington. “We are committed to the people of the country and would like to be there as part of rebuilding Venezuela’s economy in time when circumstances change."

Even Venezuela’s democratic movement led by María Corina Machado—which has criticized Chevron’s presence in the country—says the oil pumped by the company will play an important role in the country’s future.

Chevron’s catbird seat in the region is the culmination of Wirth’s yearslong effort to persuade Washington that his company is a stabilizing force that prevents China from controlling strategically important oil fields.

Maduro denies the drug-trafficking accusations and said the recent U.S. seizure of a supertanker carrying Venezuelan oil was an act of naval piracy.

Venezuela became a flashpoint in the early weeks of Trump’s second term.

In March, the U.S. revoked Chevron’s license from the Biden administration to pump oil there, part of its effort to end Maduro’s 12-year dictatorship. Wirth led a lobbying blitz in Washington ahead of the White House meeting later that month between Trump and oil industry CEOs.

At the gathering, Trump signaled he would explore extending Chevron’s license. Commerce Secretary Howard Lutnick told Wirth that tariffs or financial penalties on countries that buy oil from Venezuela could bring Maduro to the negotiating table.

In the months after the meeting, Wirth helped persuade U.S. officials why it should be allowed back in the country. By the summer, Trump urged his aides to hammer out a deal that would give priority to U.S. companies to access Venezuela’s oil wealth.

The administration in July gave Chevron its blessing with a new, more limited license. It is designed to prevent Maduro from profiting, though half the oil that Chevron and state-run Petróleos de Venezuela—known as PdVSA—pump goes to Maduro’s government.

A Chevron spokesman said the company’s operations in Venezuela are in full compliance with applicable laws.

Wirth and Trump are known to be tight. The oil executive is an eloquent speaker whose TV appearances entertain the president, and the men chat about Venezuela and other topics.

Wirth was among the first to embrace “the Gulf of America," Trump’s new moniker for the Gulf of Mexico. His company, which has donated to inaugural committees of both parties, gave $2 million to Trump’s, twice as much as Exxon Mobil and Occidental Petroleum.

Trump and Wirth appear to agree that opportunity abounds in Venezuela.

“It will only get bigger," Trump said on Truth Social of the U.S. naval armada parked in the Caribbean, “until such time as they return to the United States of America all of the oil, land, and other assets that they have previously stole from us."

Exxon Mobil and ConocoPhillips pulled out of Venezuela in 2007 after former President Hugo Chávez nationalized their assets. Conoco sued the Venezuelan government for more than $20 billion; Exxon sued for $12 billion.

BP and TotalEnergies exited the country over the following decades. Earlier this year, the U.S. revoked authorizations for Spain’s Repsol and Italy’s ENI to export Venezuelan oil. Shell recently received U.S. approval to develop gas offshore of Venezuela.

Chevron’s history in Venezuela can be traced through Gulf Oil, which opened its first offices there in 1923 and was acquired by Chevron in 1984. Venezuela nationalized its oil-and-gas assets in the 1970s, creating a state-owned oil company. In 1996, Chevron returned to the country as a joint-venture partner of PdVSA.

Despite the many challenges, Chevron has stayed put. The company and its joint ventures employ about 3,000 people in Venezuela. Chevron’s oil production in Venezuela has historically represented less than 10% of the company’s global output.

Chevron’s long-term future depends—as does every oil company’s—on replenishing the stock of oil and gas it can produce.

Around the world, big oil discoveries are becoming increasingly rare and valuable. Chevron plans to pour $7 billion next year into offshore projects in places such as Guyana and the eastern Mediterranean, a large increase from prior years, and is strengthening its exploration team.

Navigating the company’s future in Venezuela has become trickier. If Maduro relinquishes power, it isn’t guaranteed that Venezuela’s opposition leaders would come to power immediately, or if they did, that economic growth would follow quickly, analysts said. A military that wouldn’t fall in line with a new civilian government would be another potential hurdle. Venezuela’s next presidential election is expected in 2030.

“For the recovery of oil production, particularly in the first two years, there is no company poised to help more than Chevron," said Francisco Monaldi, director of the Latin America energy program at Rice University’s Baker Institute for Public Policy. “If they’re willing to invest money, it will be a tremendous signal for the others."

In the past, Venezuela’s democratic movement has urged the U.S. not to let Chevron operate there. But it recognizes a stark reality: If Maduro relinquishes power, the oil pumped by Chevron—and one day, perhaps others—would play a big role in the country’s economic recovery, they say.

The democratic movement is developing an economic plan that calls for Chevron and other major oil companies to raise Venezuela’s crude production by several million barrels a day in less than a decade. The movement envisions PdVSA as an energy regulator refereeing a privatized oil sector.

Venezuela now pumps about 900,000 barrels a day; Chevron is responsible for about one-third of that production.

Chevron hasn’t engaged with Venezuela’s democratic opposition, according to Rafael de la Cruz, director of the Washington office of Venezuela’s President-elect Edmundo González and Machado, the opposition figure.

“If Venezuela is going to grow as we think it is going to, it’s going to be basically because of massive private investment," de la Cruz said. “Chevron is going to be part of the oil industry in Venezuela, no doubt, along with many other companies that we would like to attract back to Venezuela."

Write to Collin Eaton at collin.eaton@wsj.com