Venezuela’s recoverable reserves of heavy and extra-heavy oils and natural bitumens are on the order of 286 billion barrels (Orinoco Oil Belt and Western Venezuela’s Maracaibo Lake Basin). These reserves in addition to current proven reserves of light- and medium-crude oil, some 26 billion barrels, give a grand total of 313 billion barrels. Present production amounts to some 3.4 million barrels per day of which 72 percent corresponds to conventional oil. As Petroleos de Venezuela (PDVSA), the national oil industry, plans to almost double its present crude oil production by year 2007, increasing amounts of non-conventional oil will need to be produced. V. Paglione of PDVSA-INTEVEP, discussed the steps which will help meet this goal at the Seventh UNITAR International Conference on Heavy Crude and Tar Sands held in Beijing, China, in October.

Technology Trends: Adoption, Adaption and Development by the Venezuelan Oil Industry

Continued application of new and existing technology, together with in-house developments carried out at PDVSA-INTEVEP, Petroleos de Venezuela’s research and technological support center, have been the main weapons to face challenges to reduce cost and to maintain the Venezuelan Oil Industry as an international enterprise in the face of relatively low oil prices.

3D and 4D seismic, advanced geological modeling and reservoir simulation techniques have provided an all-around understanding of existing reservoirs allowing selection of the most cost-effective way to produce from Venezuela’s vast reserves. The integration of geology and geophysics has accounted for a reduction in the risk of interpreting structurally and sedimentologically complex areas throughout the Venezuelan oil provinces. As a result average exploration costs are in the order of only $1 per barrel.

For several years, key production technologies, such as horizontal completions, electrosubmergible and progressive cavity pumps, multiphase pumping and metering, have been successfully deployed in the Orinoco Oil Belt. As a result, production costs have been cut by more than 50 percent during the last decade and are currently around $1.50 per barrel.

The development of Orimulsion by INTEVEP will allow commercialization of a great deal of the extensive natural bitumen reserves of Eastern Venezuela. Orimulsion is an emulsion of extra-heavy oil, water and a surfactant, developed to compete with coal as an environmentally preferred boiler fuel. The emulsion contains 30 percent water with a calorific value around 13,000 BTU per pound. On-going research at PDVSA-INTEVEP aims at a new generation emulsion containing only 20 percent water with less surfactant and higher calorific value. Present production reaches 4.1 million tonnes per year with plans to increase production to 32 to 34 million tonnes for the year 2007.

PDVSA-INTEVEP has also developed a new upgrading technology for heavy/extra-heavy oils and bitumens which can be utilized in the conversion of the vast resources of the Orinoco Belt. The process, called AQUACONVERSION, allows for the conversion of non-conventional oils with gravities in the range of 8 to 10º API, to a syncrude oil at 16º API or better. Scale-up and commercial application studies of this technology are being carried out throughout an alliance between PDVSA-INTEVEP, UOP and Foster Wheeler.

PDVSA-INTEVEP is also carrying out research to try to establish the actual production mechanisms for the heavy/extra-heavy oils and natural bitumens of the Orinoco Belt by means of "foaming crudes." This concept by which certain heavy oils can be produced as gas-oil dispersions, is being thoroughly studied and characterized. Promising results have permitted the development of a methodology to evaluate foam stability and gas entrapment behavior in a variety of viscous crudes. The increased recovery factors associated with this phenomenon, (more than 15 percent in some cases), are beginning to be observed at field operations in the Orinoco Belt.

The Venezuelan Oil Opening and the Orinoco Oil Belt

The end of the 20th century is bringing changes to the Venezuelan Oil Industry. The return of "Oil Majors," and many others, is being looked upon as a new era for the Venezuelan Oil Business. Petroleos de Venezuela is planning to increase exploration and production spending through 2007 to some US$73 billion from present US$65 billion. All of these efforts with third parties are sought to contribute to a production increase of more than 2.0 million barrels of oil per day by year 2007.

As an incentive to third party investments the Venezuelan national government has established a special fiscal treatment consisting of a reduction from 67.7 to 34 percent fiscal payment. This amendment to the income tax law, establishes a new advantage for the associations that the Venezuelan oil industry has been able to promote.

So far, four oil licensing rounds have been conducted by Petroleos de Venezuela. The result: eight Profit-Sharing Agreements in new areas and 33 Operating Agreements in inactive and mature fields. In addition, the exploitation of the Orinoco Oil Belt through four multibillion-dollar strategic associations is under way. Each one of these associations will be handling some 150,000 barrels per day of non-conventional crudes with gravities ranging from 8 to 10º API. By applying the latest technological advances these companies will produce some 600,000 barrels per day of a 15 to 31º API syncrude. Nine additional associations are currently under consideration, including ARCO for the AQUACONVERSION scheme, Shell-Texaco, BP, Amoco and Marathon for some upgrading projects, and CNPC for Orimulsion.


The increase in Venezuela’s production potential is a tremendous challenge. To keep up current production of 3.4 million barrels per day requires generation of over 700,000 barrels per day from the associations and joint-ventures with the private sector. Petroleos de Venezuela’s long-term business plan calls for an increase in production to 6.7 million barrels per day.

Venezuela is aiming at becoming the largest occidental hydrocarbon producer in the next century, doubling its present oil production. To meet this goal, a considerable amount of human effort and financial resources are entering the country with the Venezuelan Oil Opening.

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