Chevron Corporation CVX recently announced that it has not held any discussions with President-elect Donald Trump’s team regarding the company's operations in Venezuela.
CVX’s Unique Position in Venezuela’s Oil Fields
Since 2019, Chevron, holding a significant role in Venezuela as the only U.S.-based oil producer, has been trying to align its activities with the U.S. policies, which were imposed to restrict Venezuela's oil revenues and force the ouster of president Nicolás Maduro, prompted by electoral fraud. The company emphasized its dual focus of supporting the U.S. policy objectives for Venezuela as well as providing a better future to Venezuelans.
Since 2022, CVX, under relaxed restrictions by the Biden administration, has been able to export Venezuelan oil to the United States, averaging 238,000 barrels per day to recover unpaid dividends from the joint venture partners.
Despite all the hurdles and tensions, CVX has been trying to hang in there and work with the government so that its place does not get replaced by companies from Russia and China, which will lead to changes in the country’s energy framework.
CVX Anticipates Policy Shifts: From Biden to Trump
The ever-evolving U.S. policy decides CVX’s role in Venezuela. The temporary relaxation of norms under the Biden government allowed Chevron to continue operations in Venezuela under strategic cooperation. Meanwhile, the company is uncertain about its future in the country following the formation of the new Trump administration, wherein the company is committed to balancing the U.S. policies and Venezuelan interests.
Global Energy Challenges: Beyond Venezuela
Chevron’s chief executive officer (CEO) addressed broader energy issues relating to the U.S. Strategic Petroleum Reserve, which the government has been trying to replenish since 2022 after it reached its lowest levels in 40 years. The CEO advocated clearer guidelines on its use that are a little stronger than the ones that exist now. He also pointed out the limited effectiveness of sanctions on countries like Iran, which have merely rerouted oil supplies rather than reducing global output.
CVX’s Zacks Rank and Key Picks
The U.S. energy major Chevron, one of the world’s largest publicly traded oil and gas companies, with operations that span almost every corner of the globe, is currently holding a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like ARC Resources Ltd. AETUF, Flotek Industries, Inc. FTK and Nine Energy Service, Inc. NINE. Arc Resources, Flotek Industries and Nine Energy Service each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Canada-based ARC Resources is engaged in the exploration, acquisition and development of oil and natural gas properties. AETUF’s expected EPS (earnings per share) growth rate for next year is 51.59%, which aligns favorably with the industry growth rate of 12.60%.
Flotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2024 earnings indicates 125% year-over-year growth.
Houston, TX-based Nine Energy Service, Inc. provides onshore completion and production services to unconventional oil and gas resource development. NINE’s expected EPS growth rate for the current quarter is 33.33%, which aligns favorably with the industry growth rate of 9.04%.
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