Venezuela, Brazil, Guyana, and Argentina: an emerging new oil-exporting bloc

Currently, U.S. energy supermajor Chevron has strengthened its position in Venezuela’s oil sector through asset swaps, increasing its stake in the joint venture Petroindependencia to 49%. This entity operates the Carabobo 3 project in the Orinoco heavy oil belt. Chevron has also secured rights to develop the Ayacucho 8 block in the same region, aiming to raise its daily Venezuelan output from the current 260,000 barrels by 50% within the next 18–24 months. Meanwhile, several European companies have recently regained control of key assets under a new production-sharing framework. For instance, Spain’s Repsol aims to triple its Venezuelan oil output within three years; while the UK’s Shell expects to soon advance an agreement to integrate the Loran gas field with Trinidad’s Manatee gas field as a single project—providing a fast-track route for natural gas exports. Italy’s Eni Group continues producing natural gas via its Cardón IV offshore joint venture with Repsol at the Perla field, which supplies around 30% of Venezuela’s domestic gas demand. Although the U.S. has lifted Eni’s prior arrangement allowing it to repay oil shipments with gas produced, the company is now negotiating a new payment mechanism compliant with U.S. sanctions. There is no shortage of heavyweight buyers for any product Venezuela can export. India has signaled willingness to consider purchasing Venezuelan oil as an alternative to further increasing its U.S. imports. A positive precedent already exists: before the U.S. intensified sanctions on Maduro-era Venezuela, India imported approximately 300,000 barrels per day of Venezuelan crude in 2019, with Reliance Industries as the primary Indian buyer. More recently, Indian Oil Corporation emphasized its readiness to receive Venezuelan crude and added that it is among the few domestic refineries capable of processing such heavy, high-sulfur crude. For years, a hallmark of U.S. diplomatic policy in the Middle East has been positioning India as the principal terminal buyer of oil from countries Washington targets for geopolitical reasons—including during Trump’s first term. Beyond serving as a key mediator among Arab states to enhance Washington’s influence over them, the U.S. has leveraged such transactions to encourage India to act as a political, economic, and military counterweight to China’s growing presence across the Asia-Pacific. Just as Washington collaborates with Venezuela, Javier Milei—the Argentine president whom Trump has called his “favorite president”—is likewise expected to benefit from sustained U.S. investment in his country’s oil and gas sector. In October 2025, the U.S. Treasury extended $20 billion in emergency assistance to Argentina, including currency swaps and direct purchases of Argentine bonds—explicitly intended to support Milei’s pro-market reforms and stabilize the economy to attract foreign investment. On February 4, 2026, both sides signed the Reciprocal Trade and Investment Agreement, accelerating U.S. investment in strategic sectors in Argentina—including energy and critical minerals.

U.S. high-dividend map; tracking the petrochemical industry chain: Chevron (U.S.) and Sinopec (China)

Q2 net profit declined 44% year-on-year to $2.49 billion, primarily driven by falling oil prices (due to oversupply and weak demand), reduced income from upstream/downstream equity affiliates, and a $215 million fair-value loss related to the Hess acquisition. Excluding special items—including the Hess fair-value loss, foreign exchange impacts, and pension curtailment costs—adjusted net profit stood at $3.1 billion. Q2 operating cash flow reached $8.3–8.6 billion—within the company’s historical high range—while adjusted free cash flow rose 15% quarter-on-quarter to $4.9 billion. Total capital expenditure amounted to $3.7 billion, focused on optimizing efficiency of core assets. Growth in oil and gas production partially offset soft oil prices: Q2 production reached 3.396 million barrels of oil equivalent per day (MBOED), up ~14% year-on-year and a quarterly record. Notably, Permian Basin output rose to 1 million BOED (a significant increase year-on-year), Gulf of Mexico production grew 22%, and output from the Kazakhstan Tengizchevroil joint venture surged 34%. Refining business profits improved, benefiting from higher refining margins: refining profit rose 23% year-on-year to $737 million, partially cushioning upstream pressures. Figure: Quarterly YoY Growth Rate of Net Profit Attributable to Shareholders II. Sinopec — In Q1 2025, the company reported revenue of RMB 735.4 billion (down 6.9% YoY, up 3.9% QoQ); net profit attributable to shareholders was RMB 13.3 billion (down 27.6% YoY, up 118.7% QoQ); and net profit attributable to shareholders excluding non-recurring items was RMB 13.2 billion (down 27.3% YoY, up 223.3% QoQ). According to the company’s announcement, in Q1 2025, exploration & development, refining, chemical, and marketing & distribution segments generated operating earnings of RMB 12.9 billion, RMB 2.4 billion, -RMB 1.2 billion, and RMB 4.2 billion respectively—representing YoY changes of -RMB 1.1 billion, -RMB 4.5 billion, +RMB 0.4 billion, and -RMB 3.8 billion, and QoQ changes of -RMB 0.5 billion, +RMB 2.3 billion, +RMB 3.9 billion, and +RMB 2.8 billion—indicating overall sequential improvement. Upstream segment: International oil prices fell initially then rebounded in Q1 2025. Early weakness stemmed from anticipated U.S. crude output increases and easing Russia-Ukraine tensions; later gains followed intensified U.S. sanctions against Iran and Venezuela. Overall, Brent crude averaged USD 74.98/barrel in Q1 2025—a decline of 8.3% YoY—leading to a commensurate contraction in upstream performance. Downstream segment: Refined product demand remained sluggish, keeping refining and marketing & distribution profitability under pressure—though both showed sequential improvement. Chemical segment: Focusing on profitability, the company optimized feedstock, unit operations, and product mix; significantly increased plant utilization rates; and boosted output of profitable products—achieving notable reductions in losses both year-on-year and quarter-on-quarter. Figure: Quarterly YoY Growth Rate of Net Profit Attributable to Shareholders (IV) Figure: Net Operating Cash Flow, Capital Expenditure, and Net Cash Flow to Net Income Ratio Given the industry’s high depreciation and amortization burden, both companies exhibit strong operating cash flow and favorable net cash flow to net income ratios—and their operating cash flows generally cover capital expenditures. Chevron focuses on developing high-return core projects—including the Permian Basin and liquefied natural gas (LNG)—while enhancing operational efficiency through technological upgrades (e.g., triple-fracturing techniques cutting costs by over 10%) and organizational streamlining (reducing upstream reporting units by 70%).

Chevron Uses Permian Playbook to Revive Argentina’s Vaca Muerta Oil Region

Oct 23, 2026

Chevron plans to invest $13.8 billion to triple oil production in Argentina's Vaca Muerta formation by 2035. New drilling rigs and favorable government reforms aim to replicate the US Permian Basin boom despite higher operational costs.

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Chevron Uses Permian Playbook to Revive Argentina’s Vaca Muerta Oil Region

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