Venezuela raises proven oil reserves by 23 %

[Judi Lynn]

Venezuela raises proven oil reserves by 23 %

19-03-10 Venezuela announced its proven oil reserves rose to 211.17 bn barrels at the end of 2009, a 23 % increase thanks mostly to heavy crude oil finds that are difficult to extract.
The new aggregate reserves -- an additional 39.24 bn barrels -- came mainly from the Orinoco Heavy Oil Belt, a south-eastern area where Venezuela has intensified its investments in exploration and development, and only a small part from traditional oil fields. In March 2009, the country's proven reserves stood at 172.32 bn barrels.

Venezuela, the top crude oil exporter in South America, now holds the second-largest proven reserves in the world, behind Saudi Arabia (266 bn barrels) and ahead of Iran (138 bn barrels), according to the Organization of the Petroleum Exporting Countries. After its proven reserves fell to 76 bn barrels of oil in 1998, Venezuela launched a "socialist project" in 2005 to boost reserves to 314 bn barrels, which would give it the world's largest reserves.
"This project would confirm that thecountry has the world's biggest crude reserves, and it would put them to work for humanity," state-owned oil company PdVSA said.

Venezuela is estimated to have 235 bn barrels of oil in the Orinoco basin, but the oil there is heavy, difficult to extract and more costly to refine than conventional crude.
Following oil nationalizations in 2007, US groups ExxonMobil and ConocoPhillips left Venezuela. But other oil firms have accepted to work under new partnerships where PdVSA has the controlling stake. US-based Chevron and Spain's Repsol have indicated they stand ready to invest billions of dollars, and have already seen some payback when they were attributed projects in the Orinoco basin.

http://www.gasandoil.com/goc/news/ntl102068.htm

[ChangoLoa]

1. There's still a lot of margin to raise them.

The issue is how to actually raise the production. We've been hearing about many contracts being signed for the last 5 years and still our production isn't taking off. Only "rattrapage". Not being able to fully exploit our potential in the oil industry is the essence of the development trap we've been in since the late 70's.

[protocol rv]

3. They won't be raising production this year, that's for sure

PDVSA is too distracted with the electric power crisis, and now they have them taking over aluminum industry plants as well. So their management is barely able to cope with all the distractions being thrown at them by Chavez and Ramirez. This lack of focus on their core business is showing.

Check this interesting website with oil production records, on pages 31 and 32 we see the evolving production history for Latin American countries.

http://www.peakoil.nl/wp-content/uploads/2010/04/2010_April_Oilwatch_Monthly.pdf

If the data is reliable (and i don't have a reason to think a dutch site discussing peak oil is unreliable), then we see production in Venezuela, Ecuador, and Argentina dropping. We see production in Brazil and Colombia increasing.

The conclusion is fairly clear, Venezuela does have huge oil reserves, but production is decreasing. This is due to a combination of PDVSA distraction and lack of internal capability, their lack of payments to the service companies, which are increasingly reluctant to work for PDVSA, and the lack of foreign investment by multinationals, some of which sign agreements, but fail to carry out work.

[Peace Patriot]

2. "...the second-largest proven reserves in the world"? The USGS just said that Venezuela has TWICE

the oil reserves of Saudi Arabia--and that Venezuela's is the biggest oil reserve on earth. Perhaps the word "proven" ("proven reserves") is the key to this discrepancy? I'm not sure if this is an error (by gasandoil.com) or a consequence of how reserves are measured. (The USGS is an estimate? A "proven reserve" would be based on exploratory wells?).

Dunno. But I thought I'd mention it. And Venezuelan signed more than Chevron and Repsol. They signed a total of eight companies, from as many countries, to develop the Orinoco Belt, and a few weeks ago added China. One of them, Italy's ENI, was thrilled to get the business, and said so in the press conference. Exxon Mobil aced itself out of this huge oil field by being total greedy corporate monopolist shits in the negotiations. They don't want ANY of 'THEIR' oil profits to go to poor schoolchildren in Venezuela. They wanted it ALL. So they get nothing--unless the Pentagon intervenes.

One other error in this article. The Chavez government did NOT "nationalize" Venezuela's oil. It was nationalized prior to Chavez. What the Chavez government did was to renegotiated the oil contracts to give Venezuela and its social programs a better deal. And they got all of these companies to agree to Venezuelans' terms. Now THAT'S a FREE MARKET! Made competitive by a FREE and SOVEREIGN people! And, believe me, that is why our government and the corpo-fascist press hate Chavez so much.

[protocol rv]

4. Correction

During the Carabobo bid round, two consortia bid in two blocks. One block was left deserted - meaning no company bothered to vote. The 8 companies you mention were allied into the two bidding combines, led by Chevron and Repsol respectively. Some of them took tiny shares in the consortia, as low as 1.5 %, something they apparently did so they could gather information and help their sister companies sell equipment in Venezuela. ENI was "delighted" to have signed their deal, but hasn't done anything since then. They continue to express "delight" - and they are still waiting.

ExxonMobil has been very clear regarding the reasons why they did not agree to contract conversion. They wanted international arbitration, and PDVSA denied this clause.

I don't think the US government hates Chavez. He is bothersome, but the US government is more focused on the Middle East. What Chavez does to cozy up to Iran, Belarus, and other dictators does bother the US, so of course there is no love lost. But the US has excellent relations with Brazil, for example, even though Brazil is somewhat jealous because it wants to become the USA of South America, which it seems well on its way to achieve. In the end, with its economy imploding, Venezuela will likely end up becoming a Brazilian satellite. But this will probably take 20-30 years.

[protocol rv]

5. Comments?

Every time I correct your comments, you don't engage. Trust me, I'm really trying to help you evolve into a more rounded revolutionary. If you get the right information, then you won't have me correcting what you post this way.

[naaman fletcher]

6. Saudis vs. VZ

In regards to your comment, VZ has lots of oil, but a lot of it is very difficult to extract. The Saudi oil is very easy to extract, hence the apparent discrepancy in the reporting.

[protocol rv]

7. Saudi have real oil muscle, and they control the market

The Saudis build about 3 million bpd spare capacity, that's more than Venezuela produces today. So their spare, what they leave closed, is sufficient to put another Venezuela on the market. Which means they can flood it and drop the price if they wish. And this means other OPEC nations have to do exactly as they say.