Venezuela Becomes World’s Largest Oil Reserve Holder
OPEC, the Organization of Petroleum Exporting Countries, recently released its annual statistical bulletin showing Venezuela as the world’s largest oil reserve holder. Venezuela’s reserves reached 296.5 billion barrels in 2010, easily surpassing Saudi Arabia with 264.5 billion barrels the previous year.
This discovery has led to investments in the Venezuelan reserves. Italian oil giant, ENI, plans to invest $7 billion in a project in the Orinoco Belt to increase output to 240,000 barrels a day by 2018. This investment includes plans to build a refinery to process the extra-heavy crude extracted by the upstream division into diesel fuel for the European market.
However, there are doubts on how economically viable it is to recover the extra heavy oil in the Orinoco Belt. Many are skeptical of the viability of the Venezuelan reserves. “I doubt the recovery factor could go much higher than 25% and much of that oil would not be economic to produce,” Venezuelan oil geologist and former Petroleos de Venezuela SA (PDVSA) member, Gustavo Coronel, told the Associated Press earlier this year. Iraq and Iran, whose combined reserves equaled 294.3 billion barrels in 2010, joined Venezuela at a recent OPEC meeting, declining to back a Saudi-led push to increase production.
In the future, the boost in the reserves may empower members of OPEC who are in favor of maintaining high prices for crude. In 2010 alone, OPEC members’ overall gross domestic product (GDP) climbed 11% to $2.3 trillion, and total value of their petroleum exports rose to $745.1 billion. Only time will determine if Venezuela will be able to support the potential of their abundant natural resource.