With the perforation of the two first wells under the Orinoco Magna Reserve Project, Venezuela began the process of “quantifying and certifying” its Orinoco belt oil reserves on Thursday, which could recognize Venezuela as the country with the largest petroleum reserves in the world by 2008.
Chavez stated on Thursday that by 2008, Venezuela will have officially certified “316 billion barrels” in reserves, the total reached by adding the 235 billion barrels of Orinoco reserves to the current 81 billion barrels already certified in the country. Venezuela is now considered the country with the fifth largest reserves in the world. Proven Orinoco reserves were previously estimated at only 36 billion barrels.
Chavez indicated that total certified Orinoco reserves should rise to almost 91 billion barrels by November of next year, putting Venezuela in second place in proven oil reserves with 171 billion barrels. Currently Saudi Arabia has the largest petroleum reserves in the world with 262 billion barrels of crude.
“The inauguration of this program for the quantification and certification of the existing hydrocarbons in the Orinoco Oil Belt is the energy strategy of Venezuela. It has power over the integration of South America, the project of endogenous industrialization, local development and our indigenous communities; for them, what is occurring has a great impact.” Said President Chavez
Chavez made the announcements in the Venezuelan state of Anzoategui, during the inauguration of the Orinoco Magna Reserve Project and the perforation of the second well of the Carabobo block I, where 5% of the total Orinoco reserves are believed to be located. According to PDVSA, the Orinoco belt has been divided into 27 blocks, according to their “technical characteristics and strategies.” Thursday’s perforation was part of the first.
The Orinoco Magna Reserve Project comes under the Sowing the Petroleum Plan, 2005- 2030, with the goal of “achieving the quantification and certification of the existent hydrocarbon reserves in the Orinoco Oil Belt,” according to the Venezuelan state-owned oil company, PDVSA. Venezuela will incorporate the first 9.2 billion barrels of reserves by the end of this year.
According to Ultimas Noticias, Venezuela invited a group of international observers for the certification. The Brazilian state oil company Petrobras is already participating in the project and energy companies from India, China, and Argentina have been invited to help evaluate the quantity of hydrocarbons found.
Venezuela currently produces approximately 3 million barrels of crude per day, of which approximately 600,000 barrels of synthetic crude is currently extracted from the Orinoco oil belt daily. This crude, until recently, was too costly to produce because of the make-up of the petroleum and the location of the wells, but with oil prices high and increasingly on the rise, as well as improvements in technology and infrastructure in the Orinoco region, it has become increasingly cost-effective to open up the region to development.
Current Orinoco oil production is carried out by PDVSA in conjunction with the foreign oil companies such as ExxonMobil, ConocoPhillips and Chevron.
During last Thursday’s perforation event, Chavez also again reiterated that there are no plans to cut supply to the United States. Venezuela currently exports approximately 1.5 million barrels to the United States daily.