VENEZUELAN OIL

Well, this is the story of a man named Chavez, poor President barely kept his country fed. Then one day, shooting at some food, up through the ground came a bubblin’ crude … The U.S. Department of Energy estimates Venezuela’s reserves at 1.3 trillion barrels, more than all other OPEC members. Yet, the country is now importing 100,000 barrels of Russian crude oil a day.

1 IT’S ALL ABOUT THE BITUMEN, MAN

Oil was first discovered in northwestern Venezuela in 1921 and, much like the Beverly Hillbillies, the country’s ruling class was soon living large on black gold. Production from those original reserves is now declining, however, and the future of the Venezuelan oil industry is largely banked on the Orinoco oil belt and its massive reserves of heavy bitumen, the same type found in the Alberta oil sands.

Once the price of oil surged past the $50-(U.S.)-a-barrel mark, much of the Orinoco oil sands suddenly became economically viable, and with Orinoco included, the U.S. Department of Energy now pegs Venezuela’s total estimated reserves at 1.3 trillion barrels, greater than the combined reserves of all other OPEC members. Venezuela’s state-owned PDVSA is now the world’s fifth-largest producer of oil, generating more than $75-billion in annual revenue.

Globe and Mail