Venezeuela May Raise Proven Oil Reserves to Largest in the World

Rigzone reported the following regarding Venezuela's oil reserves:

Venezuela's proven oil reserves total 81 billion barrels (Bb) and could grow to 316Bb by 2008, newspaper El Universal quoted state oil firm PDVSA president Rafael Ramirez as saying.

"We are sure that we will incorporate into our proven reserves, in our books, 235Bb of oil that can be recovered from the Orinoco oil belt," the paper quoted him as saying. ...

"We are in a program that should wrap up in November 2008," Ramirez said of the program.

If Ramirez is right, the program could bring Venezuela's reserves to 316Bb, the highest in the world.

In a separate article they reported:

Venezuela is the world's fifth-largest crude oil exporter. However, its production is heavier than other types and commands a lower price. For example, a barrel of Venezuelan oil last week had an average price of US$64.37, while West Texas Intermediate (WTI), Brent and the Organization of Petroleum Exporting Countries (OPEC) barrels were all above US$70.

And in another article:

Venezuela's state oil company PDVSA aims to produce an extra 520,000 barrels a day (b/d) at the Orinoco heavy crude belt by 2012, officials from the state firm's R&D unit Intevep told BNamericas. ... Orinoco presently produces 500,000-600,000b/d.

It appears that Venezuela is following Canada's lead by including part of its enormous heavy oil reserves in its official 'proven oil reserves'. The problem with heavy oil is that it is more expensive to process than conventional oil. The proportion of oil reserves classified as unconventional oil, which includes heavy oil, keeps increasing as production of conventional declines (past peak). As far as the US is concerned, we have to wonder how much of this oil we will receive, considering Chavez's attitude toward the US, but in the end all of the oil that is produced is probably going to be consumed somewhere and if possible we would like to get our hands on as much conventional oil as possible, no matter where it comes from.  US refineries continue to be upgraded to handle heavy, sour oil so we can probably handle oil no matter where it comes from. An extra 520,000b/d is not too significant considering our crude oil distillation capacity is almost 18 million barrels per calendar day (including Puerto Rica and the Virgin Islands) per EIA, but supplies are getting more scarce as the demands of China and India keep increasing.

I found the following while looking up the data on our refinery capacity, which is more encouraging than you would expect from listening to and reading the popular press.

Total crude distillation capacity increased by 214,000 BPCD (+1.25%) in 2005. U.S. refiners are responding to the growing demand for gasoline and diesel by making significant investments to increase refining capacity. Refining companies have announced plans to add between 1.4 and two million barrels per day of new U.S. refining capacity, much of which could be on-line by the end of 2010. (source: National Petrochemical & Refiners Association)

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Comments

[amazeindrag]

Heavy crude is expensive to refine, like you say. So even if worldwide reserves keep going up, if much of those reserves are heavy crude, the cost of oil stays high. Keeping the oil cost high in the face of high reserves is good for the development of renewable energies (but bad for peak oil empresarios). I'm more afraid of new discoveries of lighter crude, or a big recession somewhere that drives down oil prices.

[Harvey D.]

All industrialized countries could harmonize their carbon/gas taxes (upward) to reduce fossil fuels consumption and generate the funds required to actively promote cleaner alternatives such as extreme PHEVs and BEVs etc.

A global fossil fuel average retail price of $8 to $10/gal within 10 to 15 years would be required (and probably sufficiant) to significantly reverse the current fossil fuel consumption trend.

Otherwise, the number of gas guzzlers and inefficent ICE vehicles will keep on increasing and GHG will soon reach unmanageable levels.

[amazingdrx]

Raising taxes is very hard Harvey.

But cutting subsidies to big oil multinationals and the oil wars fought in the interests of oil corporations would boost gas prices and at the same time save taxpayer's money, and the precious lives of US soldiers and civilians in countries located over vast pools of oil.

This actually has a similar effect to raising gas/carbon taxes.

Some of the taxpayer funds saved could be aimed at renewable electric powered vehicle tax incentives to consumers. The rest could be used to fight the huge deficit and debt that is making we the people ever poorer in terms of standard of living.

I think it's a winning political issue if it could be explained clearly enough. Cut corporate welfare, pay down the deficit and help americans save money on high fuel costs.

Electric power in a car costs 75 cents per gallon equivalent in gasoline. Drive 35 miles for 75 cents instead of 3,4,5.. bucks? As gas prices soar..that helps we the people to thrive and survive oil monopoly price gouging and manipulation.

Hit that Saudi (terrorist funding)shiek where he lives, in his swiss bank account! Don't buy his oil.

[DG]

Unfortunately, the latest polls I have seen on the issue show that about 2% of Americans think higher gas taxes will help solve the energy crisis. Sadly, the number of people wanting higher CAFE standards isn't much higher. Most folks are just either hoping there will be some magic-bullet alternative fuel that allows them to continue to drive SUVs at 85 mph and put 25K miles per year on their cars. Either that, or they're playing "blame the oil companies" and just wanting government to mandate lower gas prices.

So as much as higher gas taxes might seem to make sense economically, especially if the revenue was entirely directed towards programs to end oil dependence, it's just not going to happen. It seems like most Americans would rather murder their own children then pay an extra nickel in taxes.

[Phil Degrave]

"It seems like most Americans would rather murder their own children then pay an extra nickel in taxes."

Not really, but they would rather not see that money go to $2000 credit cards for "Katrina Victims" to get lap dances after they had already been living off the taxpayers for their whole useless lives already.

[Paul Dietz]

The question is not how much of this oil will the US receive, but rather how much Venezuela will actually produce, and how fast. Chavez has gutted the technical and managerial competence of Venezuela's state oil company. He's turned the thing into a charity and slashed the reinvestment of capital needed to keep current oil production going, let alone produce large new reserves.

The very heavy oil also needs special refining, and given Chavez's politics (and the risk it imposes) others may be reluctant to invest in new refineries capable of handling it.

[amazingdrx]

Interesting guessing on oil production from Jan 2003. This illustrates the difficulties involved in prediction of supply in a world at war. But 80 dollar oil provides a lot of cash for investment in production and refining of heavier oil.

"In fact, if the conflict affects other parts of the gulf, oil prices could even reach $75 a barrel or more, says Lehman Brothers Inc. global chief economist John Llewellyn in London. But he says there is only a 5% chance that the conflict won't be contained. Far more likely, with a 70% chance of happening, the U.S. will not strike or will have a swift war with Iraq, causing oil prices to go down to $20 a barrel, says Llewellyn."

http://news.thomasnet.com/IMT/archives/2003/01/war_dictates_oi.html?t=archive

[Ender]

The extra heavy oil is not heavy sour crude. Extra Heavy oil needs processing similar to Tar Sands to even get it to Heavy Sour grade. This process requires energy of some sort usually Natural Gas - where does that come from? I guess you can use the EHO however that drastically lowers the energy return down to less than 10. At that rate you would just be better to use wind or PVs to generate the energy.

[Nucbuddy]

Ender,

Nuclear power plants can provide process energy.

[amazingdrx]

Forget the oil and nuclear waste and fuel (which will run out if nukes are used for processing oil). Just power vehicles with wind and solar electricity.

Why give Chavez more power over our economy? We can see how well OPEC is managing it now. Do you really want Chavez to have nuclear reactors he can use to develop weapons?

[Nucbuddy]

Internationally-monitored nuclear power programs cannot easily be used to develop weapons, Dr. X. And weapons proliferation might not be so undesirable if the US an dother nations would embark on civil hardening.

Why do you think nuclear fuel would run out?

[amazingdrx]

less than six years of fuel left if nukes start refining oil and providing all power needed besides!

http://gristmill.grist.org/story/2006/6/8/165835/4175

What is "civil hardening"? How would one internationally moniter what Chavez is doing?

Sanctions? We need his oil, so that's right out.

Invasion, occupation, and nation building? That might disrupt oil supply, destroy the US economy, and cost trillions and last decades like the Iraq project seems to be doing?

I wonder if Chavez could hire a few layed off Soviet scientists to make plutonium in his oil refining nuclear plants? With trillions in oil profits? I bet he could.

[Paul Dietz]

The bit about uranium running out is another instance of the kind of reasoning that has predicted many nonexistent shortages in the past. It's hooey.

The problem is that it doesn't make sense to invest the time and money to prove new resources if those resources will not be used soon. As a result, reserves (stuff you are confident you can extract below a price point you expect to reach) typically are around 30 years worth of consumption.

If you look at the basic science, though, there's enormous amounts of uranium out there. Seawater uranium, for example can probably be extracted for $100-200/lb (the Japanese have tested the basic technology to do this, absorption on suspended amidoxime fibers, in the ocean at a small scale). At that price, it's still quite affordable for a once-through cycle. The oceans contain 4 billion tons of uranium.

[Nucbuddy]

What is "civil hardening"?

It is hardening of civil infrastructure against potential insults. In this case, the insults would be those that derive from nuclear blasts.

[oilfield equipment]

you know why this is because the president chavez wants to run the world.