I spent the weekend in Toronto, where I joined 40 college mates from Peking University for the Chinese Soccer Invitational Tournament. I am pleased to have passed what was a physical test, playing four games in two days in the 58+ age group. The most fun, of course, was spending time embracing my brothers with drinks and laughter. My better half and I were also super impressed by the authenticity of the Chinese food in Toronto’s Markham suburb.
Now, let’s look into two pieces of energy news from the past week.
Shangyou Nie
Editor, Well Read
Chevron and ENI Ink New Deals for Growth in Venezuela
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Venezuela has been squarely back in the energy spotlight. After President Trump announced a mega deal with a Venezuelan company last week, incumbent majors Chevron and ENI signed two separate deals with PDVSA in Venezuela to expand their business in the country.
Chevron deal details:
On 2 September, Chevron announced it reached an agreement with the Venezuelan government to invest $7 billion over the next five years to double its production in Venezuela to 600,000 barrels of oil per day.
Chevron, through its subsidiary Petroindependencia, S.A.—a joint venture with PDVSA (51 percent)—secured the right to develop two areas, Carabobo-1 and Carabobo-2-South-A.
These areas are adjacent to Chevron’s existing business in the Orinoco heavy oil belt.
The new agreements have “enhanced fiscal, commercial, and legal terms” to support “durable and sustainable long-term investments.”
According to Chevron, the estimated total cost for the new oil production is less than $20 per barrel.
Chevron’s background in Venezuela:
Chevron has three oil-focused JVs in Venezuela: Petroindependencia and Petropiar for heavy oil in the Orinoco Belt, as well as Petroboscán for conventional oil in western Australia.
Unlike its counterparts ExxonMobil and ConocoPhillips, Chevron’s assets in Venezuela were not nationalized. The world’s second-largest IOC stayed in Venezuela despite political turmoil under former Presidents Hugo Chavez and Nicolas Maduro.
Chevron is one of the best-performing energy stocks recently. Its market cap climbed to $405 billion as of 7 September, with a 36 percent year-to-date share price hike.
ENI deal details:
Also on 2 September, ENI announced that it signed a strategic contract with the Venezuelan government, witnessed by Acting President Delcy Rodríguez and U.S. Secretary of Energy Chris Wright.
ENI signed the “contrato de Participación Productiva de Hidrocarburos” (CPPH) to take over operatorship for the Junín 5 giant oil field in the Orinoco heavy oil belt.
The CPPH will place Petrojunín JV—an existing joint venture between ENI and the Venezuelan government (ENI 40 percent, PDVSA 60 percent)—under the new contractual regime introduced by the Organic Hydrocarbons Law.
The Venezuelan National Assembly approved the law in January 2026.
The CPPH grants ENI exclusive operatorship for 25 years with the possibility of an extension.
ENI will have full responsibility for technical, financial, and commercial management of the field.
Junín 5 has 35 billion barrels of “certified oil in place.”
It currently produces about 12,000 barrels of oil per day.
ENI did not specify by how much it plans to increase oil production or its investment level.
ENI has six existing licenses in Venezuela.
In 2025, ENI produced about 64,000 barrels of oil equivalent in Venezuela, mostly from the Perla gas field alongside its 50:50 partner Repsol.
Secretary of State Marco Rubio and Secretary of War Pete Hegseth signed the deal.
The deal is with private Venezuelan company North American Blue Energy Partners (NABEP).
NABEP has been granted 100-year concessions for 17 oil fields with proven reserves of 65 billion barrels.
The U.S. Department of War’s Office of Strategic Capital will hold a 35 percent stake in NABEP’s parent company.
NABEP granted the U.S. Department of State the right to purchase, at production cost, about 20 percent of its production to refill the Strategic Petroleum Reserve.
NABEP gave the U.S. Department of State the right of first refusal to purchase the remaining 80 percent of its production.
The U.S. government will have veto power during NABEP board member appointments, and a majority of the board must be U.S. citizens.
The majority of the “incremental oil fields” that NABEP will now operate were previously controlled or operated by Russian and Chinese companies.
What they are saying: “With improved terms and additional acreage, we are strengthening a portfolio that we believe can deliver attractive low-cost oil growth,” said Mike Wirth, Chevron Chairman and CEO.
What to watch:
Will other incumbent Western companies such as Repsol and Perenco sign other, similar deals?
Will ExxonMobil and CoP sign deals to reenter Venezuela? If so, how will the terms of these deals shake out?
How will the Chinese government react to the new U.S. government deal with Venezuela?
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Shell Builds Exploration Partnership with BP and Chevron
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Shell, Europe’s largest energy company, struck two exploration deals with BP and Chevron to continue strengthening its exploration portfolio. The Shell-BP collaboration is for assets in Brazil and the U.S. Gulf of Mexico (America). Shell and Chevron confirmed that they signed a Memorandum of Understanding to enter Ghana.
The Shell-BP partnership:
On 2 September, BP announced that it will welcome Shell as its partner in two key exploration theatres: Brazil and the U.S. Gulf of Mexico (America).
BP will retain operatorship in both deals.
In Brazil, Shell will acquire a 50 percent stake in the Tupinamba exploration block in the Santos Basin.
In the U.S. Gulf of Mexico (America), Shell will take a 30 percent stake in five leases containing the Conifer exploration prospect, while BP retains 70 percent equity.
The terms of Shell’s farm-in agreements into BP blocks have not been released.
The Shell-Chevron partnership:
According to Upstream, Shell and Chevron both confirmed the partnership via a social media post published by the Ghana National Petroleum Corporation.
The MoU sets up the framework for Shell and Chevron to potentially take control of the deepwater South Tano block near the Ghana-Côte d’Ivoire border.
AGM Petroleum, a Gibraltar-registered company, previously operated the 3,480 square-kilometer block.
Background:
The Ghanaian government is reviewing its upstream legal framework and considering improving fiscal incentives to attract more IOCs.
All three majors, Chevron, Shell, and BP, are trying to upgrade their exploration portfolios, at a time when the pace of energy transition is slower than expected.
Shell, BP, and Chevron are the three biggest producers in the Gulf of Mexico (America).
Shell and BP have been the two major competitors in the U.S. Gulf of Mexico (America) for more than four decades, each pushing the other to new deepwater E&P frontiers. It is interesting that these two British majors are now teaming up to jointly take on the growth challenge.
All three majors have seen share prices increase significantly in 2026.
Chevron shares are up 35 percent year to date, with a market cap of $412 billion as of 8 September.
Shell’s shares are up 26 percent year to date to $266 billion.
BP’s shares are up 25 percent year to date to $113 billion.
What they are saying:
“Brazil and the Gulf of America are important regions for BP, and bringing together two experienced operators can help unlock the potential of both opportunities,” said Gordon Birrell, BP’s EVP for Upstream
“The Gulf of America remains a world-class basin, and we are continually looking for opportunities to grow our position and create value,” said Colette Hirstius, Shell EVP for the U.S. Gulf and President of Shell U.S.A.
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