U.S. government estimates of Venezuelan reserves skyrocket

25-Jan-2010

The U.S. Geological Survey's estimate of recoverable oil reserves in Venezuela was revised upward, hinting at the country's hydrocarbon potential.

Previous estimates tabbed the South American nation's recoverable reserves at 235 billion barrels. Recently released data suggests that as many as 513 billion barrels could be recovered from Venezuela's Orinoco Oil Belt.

The revision is not dissimilar to those made in regard to America's natural gas stores. Based on recent reserve revisions, up to a century's worth of gas is recoverable thanks to new drilling technologies.

USGS scientists' 513-billion-barrel figure was achieved "on the assumption that horizontal drilling and thermal recovery methods might be widely used."

The political fortunes of Venezuelan president Hugo Chavez - widely regarded in the West as a dictator - may well be bolstered by the increased reserve estimate. Oil is a linchpin of Venezuela's economy.

Yet the recovery of that oil is likely to depend on foreign firms. The heavy oil for which the Orinoco Belt is known presents production challenges, and the Venezuelan state oil company, PDVSA, reported this week that its debt burden rose 42 percent last year. Due to its rapidly mounting debt, PDVSA may be unable to raise production within the Orinoco without foreign aid.

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