Chevron (NYSE:CVX) stock has climbed steadily over the past few months and is now hovering near its all-time high as investors weigh the latest developments in its Venezuelan operations. Shares trade at $201, just a few points below the record of $210.
Chevron is Eyeing a Big Investment in Venezuela
President Donald Trump announced a big deal in which US companies will take part in developing Venezuelan oil resources. In a statement, Delcey Rodriguez said that the deal would last for 25 years and would target an increase in crude output to 1.5 million barrels a day.
American companies are expected to make over $100 billion investment in the country, with the government receiving over $209 billion in taxes. Chevron, one of the top American companies with a presence in Venezuela is expected to be the main beneficiaries of the deal. According to the New York Times (NYSE:NYT), it could announce a deal to expand its operations this week.
Still, the deal faces substantial challenges, with Venezuelan politicians in all sides criticizing it. Also, the company will need to spend billions of dollars to develop these resources. There is also a possibility that oil prices will drop by the time it starts producing in the new locations.
