Orinoco Belt – World’s Largest Untapped Reserve

26. December, 2014 News No comments
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Venezuela is one of the world’s largest producers and exporters of crude oil. According to the Oil & Gas Journal (OGJ), in the beginning of 2014, Venezuela had nearly 298 billion barrels of proved oil reserves, the largest in the world followed by Saudi Arabia (266 billion barrels) and Canada (173 billion barrels). The vast majority of Venezuela’s proved oil reserves are located in its Orinoco heavy oil belt. Situated in Central Venezuela, the belt houses billions of barrels of extra-heavy crude oil and bitumen deposits. Development of the Orinoco Belt is the keystone of the Venezuelan government’s future economic plans – oil accounts for 95% of the country’s export earnings and around 55% of the federal budget. The government has stated that it is seeking $100 billion of new investment to develop the Belt.

 

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According to a study released by the U.S. Geological Survey, the mean estimate of recoverable oil resources from the Orinoco Belt is 513 billion barrels of crude oil. PDVSA began the Magna Reserva project in 2005, which involved dividing the Orinoco region into four major areas:  Ayacucho, Boyacá, Junín and Carabobo that are further divided into 28 blocks, and then quantifying the reserves in place. This initiative resulted in the upgrading of Venezuelan proven reserve estimates by more than 100 billion barrels.

The Magna Reserva projects involve converting the extra heavy crude and bitumen to lighter, sweeter crude, known as syncrude. The upgrading facilities themselves introduce another element of risk into Venezuela’s petroleum supply chain. While the country’s four upgraders have installed production capacity of about 600,000 bbl/d of syncrude, industry estimates place production levels for these facilities at less than 500,000 bbl/d as a result of maintenance and safety issues.

Challenges:

  • The Orinoco River surrounds a globally important wetland , also a critical habitat to a number of endangered species with high biodiversity
  • Huge amount of new infrastructure, in terms of the extraction ,upgrading of crude, refining equipment and transport.
  • Lack of power, water and transport infrastructure
  • Pollution due to the production of coke and sulphur waste from the upgrading process
  • Environmental, climatic impacts

 

Venezuela plans to further develop the Orinoco Belt oil resources in the coming years. In 2009, Venezuela signed bilateral agreements for the development of four major blocks in the Junin area. In 2011, the country awarded two more major development licenses in the Carabobo region. Venezuela expects these projects to add more than 2 million bbl/d of heavy oil production capacity by the end of the decade. However, given recent financial, regulatory, and operational issues, considerable uncertainty surrounds the future of Orinoco production.

It would be very interesting to see how the world’s biggest untapped reserve could be exploited given the added challenges. Several approaches are employed to exploit the belt efficiently, which could probably be the most sought after success in the exploitation of heavy oil sites around the world.

 

References:

http://www.eia.gov/countries/cab.cfm?fips=ve

https://www.boell.de/sites/default/files/uploads/2012/10/venezuela-orinoco.pdf

 

About author

Usman Syed Aslam

Currently pursuing Bachelor of Technology in Petroleum Engineering from Al Habeeb College of Engineering and Technology, affiliated to JNTU, Hyderabad, India. He aspires to be a reservoir engineer and work on projects located in isolated regions. Loves travelling around the world. His areas of interest include unconventional resources, geomechanics and reservoir modelling.

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