Venezuela's Orinoco Output Exceeds 600,000 bbl/d, Topping Estimates

Orinoco Heavy Oil Belt
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State oil company Petroleos de Venezuela Tuesday said its four oil upgrading ventures in the Orinoco basin produce more than 600,000 barrels of crude a day, more than the company's own estimates.

The company cited company director Eulogio Del Pino's speech during the Second World Heavy Oil Congress in Alberta, Canada, but gave no precise figure. Until recently, government officials had claimed that Orinoco output stood at 600,000 barrels a day, but analysts put that figure closer to 580,000 barrels a day.

Overall oil output in Venezuela is a matter of controversy. The government claims the country produces roughly 3.2 million barrels a day, but the Organization of Petroleum Exporting Countries, among other sources, puts total production closer to 2.4 million barrels a day.

Four extra-heavy crude upgraders in the Orinoco are known to have a production capacity of 620,000 barrels of crude a day. The ventures have lately become the center of a heated legal fight, after President Hugo Chavez decided to take majority stakes in those ventures last summer. He offered foreign companies minority participations, and some rejected the new terms.

Following the nationalization, U.S. oil companies Exxon Mobil Corp. and ConocoPhillips, filed for arbitration seeking redress. Earlier this year, Exxon went a step further by securing court orders to freeze more than $12 billion in PdVSA assets around the world. PdVSA is fighting the measure now in a U.K. court and a ruling is expected in days.

Copyright (c) 2008 Dow Jones & Company, Inc.

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