PORLAMAR, Venezuela (Dow Jones), Nov. 3, 2009
Venezuela's oil minister kicked off the World Heavy Oil Congress Tuesday, where he made the point that Venezuela's oil resources are defined by heavy grade crude.
"Venezuela is a place of heavy crude," said Rafael Ramirez.
Ramirez added that he hopes to improve the "perception" of heavy crude in oil markets during the three-day event. Weakened worldwide demand for crude due to the global economic downturn has turned off many investors to heavy crude, as it can require expensive upgraders to make the oil marketable.
Lighter crude that can be quickly and cheaply turned around and sold typically does better during economic slowdowns.
The oil conference, which is being attended by top oil company executives, including those from Chevron Corp. and Statoil ASA, was scheduled to be held in the eastern coastal city of Puerto La Cruz. But a drought in Venezuela that has reduced electric and water supplies forced organizers to relocate just days before the event was set to begin to the city of Porlamar on the island of Margarita.
Ramirez said the development of Venezuela's heavy and extra-heavy Orinoco oil field will allow it to boost production capacity to 4.25 million barrels a day of crude, from a 3.2 million-barrel-a-day capacity currently. By 2021 Ramirez said Venezuela aims to be able to produce 6.862 millions barrels a day.
Development of Venezuela's Orinoco oil belt is largely hinged on the results of a long-delayed drilling round called Carabobo, in which foreign oil companies would bid for rights to produce heavy crude in joint ventures with Venezuela's state oil company Petroleos de Venezuela SA.
The bidding has been pushed back to early next year amid disputes over how much companies would have to pay in royalties and taxes.
Ramirez said the Carabobo project and others aim to add six upgraders and two refineries to the area.
Copyright (c) 2009 Dow Jones & Company, Inc.
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