Chevron Corp. seeks to expand U.S. operations in Venezuela
September 2, 2022
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Chevron Corporation Intrinsic Value –
Chevron($NYSE:CVX) has applied for an expanded license to operate in Venezuela, after agreeing to restructure joint ventures with state-run PDVSA. The Biden administration earlier this year granted Chevron permission to negotiate with Venezuelan officials, and the U.S. Treasury Department’s Office of Foreign Assets Control recently asked the company for clarification and details of the deal with PDVSA. At stake are millions of barrels of Venezuelan oil that could help replace Russian supplies that the U.S. and some European countries have banned following the invasion of Ukraine. It is not yet clear how the expanded license will affect Chevron’s market and earnings in the long term.
However, the company’s ability to continue operating in Venezuela despite U.S. sanctions is likely to be positive for its reputation and business prospects.
Price History
On Thursday, Chevron Corporation stock opened at $156.5 and closed at $155.5. Venezuela has the largest proven oil reserves in the world and Chevron is looking to increase its production in the country.
VI Analysis – Chevron Corporation Intrinsic Value
Chevron Corporation’s fundamentals reflect its long term potential, and the company’s stock is currently undervalued by 5%. The fair value of Chevron Corporation’s stock is around $163.7, as calculated by VI Line.
However, the stock is currently traded at $155.5. This presents a good opportunity for investors to buy shares of Chevron Corporation at a fair price.
Summary
The company has been working to develop the country’s oil and gas reserves, and has been in talks with the Venezuelan government about increasing its investment in the country. The company’s expansion plans come as Venezuela’s economy is struggling. The country is facing an economic crisis, and its currency, the bolivar, has lost value. Inflation is also high, and the country’s government is in debt. Despite the challenges, Chevron believes that Venezuela has potential. The country has the largest oil reserves in the world, and its oil is relatively easy to extract. Chevron is hopeful that its investment will pay off in the long run.
