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PDVSA's head Rafael Ramirez said that level of output will be reached in 2020 thanks to “an accelerated development plan” that includes plans to invest a total of some $80 billion in a series of oil blocks
CARACAS – State oil company Petroleos de Venezuela SA and its joint-venture partners will eventually extract 4.6 million barrels of oil per day from the Orinoco Belt, the head of PDVSA said.Rafael Ramirez, who is also Venezuela’s energy minister, said that level of output will be reached in 2020 thanks to “an accelerated development plan” that includes plans to invest a total of some $80 billion in a series of oil blocks.
The Orinoco Belt is a 55,000-sq.-kilometer (21,235 sq.-mile) area of northeastern Venezuela that contains some 234 billion barrels of heavy and extra-heavy crude, according to the Venezuelan government’s preliminary estimates.
PDVSA and its operating partners in Orinoco currently produce some 600,000 bpd, according to official Venezuelan figures.
Ramirez noted that multi-national oil firms from China, Vietnam, Italy, Spain, the United States and Russia, among other countries, thus far have agreed to form joint ventures – with PDVSA holding at least a 60 percent stake – to develop two areas of the Orinoco Belt, Junin and Carabobo.
No blocks have yet been awarded in two other Orinoco areas, Boyaca and Ayacucho.
Four joint ventures have been formed to develop an equal number of blocks in the Junin area, with the foreign firms paying a combined $2.23 billion in “entry bonuses,” Ramirez said, adding that total production from those blocks is projected to reach 1.29 million bpd.
In the Carabobo area, “two joint ventures (have been created) to extract 800,000 bpd,” while $1.55 billion in entry bonuses have been paid and $2.05 billion in financing provided to PDVSA, Ramirez said.
He added that joint ventures will be formed in the near future to develop the Carabobo 1 and Carabobo 3 blocks and that PDVSA’s partners will pay out $1.05 billion and $500 million, respectively, for their participation.
U.S. oil major Chevron, Spain’s Repsol, Russia’s Gazprom and Lukoil, China’s CNPC, Italy’s Eni and Japan’s Mitsubishi are some of the companies that have formed joint ventures with PDVSA to develop Orinoco blocks.
The U.S. Geological Survey said earlier this year that the Orinoco Belt holds an estimated 513 billion barrels of technically recoverable heavy oil, or almost double the Venezuelan government’s current estimate.The USGS, which said the Orinoco belt was the largest oil accumulation it had ever assessed, noted that the oil in that region is very thick and does not flow easily but added that through the use of specialized production and refining processes a wide range of petroleum products can be generated.
Part of the money invested in Orinoco will be spent on upgraders to turn the heavy oil into lighter, higher-quality crude.
Venezuela, which currently produces 3.1 million bpd, most from other areas of the country, is the world’s fifth-leading oil exporter and – despite its leftist government’s poor relations with Washington – one of the leading suppliers of crude to the United States.
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