Venezuela oil 'may double Saudi Arabia'
BBC Online, 23 Jan 2010A new US assessment of Venezuela's oil reserves could give the country double the supplies of Saudi Arabia.
Scientists working for the US Geological Survey say Venezuela's Orinoco belt region holds twice as much petroleum as previously thought. ... Read full article
The Orinoco Belt is Venezuela's version of the Canadian tar sands, an unconventional resource. This non-conventional oil is generally assessed to be 1200 billion barrels in place, about equal to the world's conventional oil reserves.
The question is, how much might be recoverable? Venezuela's reserves today are put at around 100 billion by BP, of which perhaps 40-50% or more is from the Orinoco (there isn't a current detailed breakdown of what BP's reserves data consist of). What the USGS has done is raise the estimate of how much of the Orinoco tar might be recoverable, to 40-45%. They have applied views of... "currently available technology and industry practices". And yes, that would clearly leapfrog Saudi's declared reserves.
It's worth noting just how long Canada's oil sands are taking to develop, where perhaps another 5 million b/d will come on stream over the next 20 years. Even if Venezuela could match this, I don't think that an extra 250,000 b/d of production every year is going to make a global supply difference. Oil sands are also notoriously "dirty" both in terms of environmental destruction and pollution, and extra carbon dioxide emission during the production process.
But the BBC story continues. "However, Venezuelan oil geologist and former PDVSA board member Gustavo Coronel was sceptical. "I doubt the recovery factor could go much higher than 25% and much of that oil would not be economic to produce", he told Associated Press news agency." So a PDVSA insider reckons that the feasible recovery factor will actually be much less than the USGS thinks, and the extra oil would often be unaffordable anyway.
Nothing has therefore changed much. The USGS has done its work of identifying how much oil could theoretically be recovered by today's technology, but the investment required, the lead times, the environmental consequences and the final product cost all presently suggest that this isn't a game-changer.
Dr. Richard Miller is an Independent Consultant, and former geochemist for the BP Exploration Department