There is no place else like the Faja, Venezuela's heavy oil belt that runs east to west, half way across the country along the lush Orinoco River valley. The Faja holds more than one trillion barrels of oil. Developing the resource is making the region a focus for new technology and turning Venezuela into the world's largest producer of heavy oil.

Outside the Faja, Venezuela has 80 billion barrels of proven crude reserves, and currently estimates that producers in the Faja can extract at least 237 billion barrels of the extra heavy crude with existing technology. With nearly 320 billion barrels of recoverable oil, Venezuela will become the world's largest holder of petroleum reserves.

The Faja's crude is what producers call extra-heavy. Oil from this tar belt averages about 8.5 API gravity, which means that it is heavier than water and oozes rather than flows. This type of oil is difficult to produce and transport, and few refineries in the world will take it. But producers in Venezuela have plenty of experience with heavy oil, and their success so far has been world-class.

In the 1990s, the Faja was divided into four major regions, each being developed through joint ventures with major international oil companies and PDVSA. A fifth major project includes China’s national oil company, CNPC, in a joint venture that converts some of Venezuela's heavy crude into a patented oil-water emulsion that can be used as burner fuel for power generation. The fuel, called Orimulsion, is produced from a recently expanded plant in eastern Venezuela.

Most of the crude from the Faja is upgraded in Venezuela to anywhere from 16 to 32 API gravity. PDVSA owns enough capacity to refine 1 million barrels of oil a day in the United States, and 3.2 million barrels worldwide.

Performance of cold production
Until now, nearly all of the Faja production has been through "cold heavy oil production with sand" (CHOPS). None of the major development projects use heat, although some inject a readily available diluent to thin the high viscosity oil.

Using CHOPS alone, Venezuela now produces about 625,000 barrels a day from the Faja, and the economics are good. The lifting costs of heavy oil production have dropped 70 percent since 1991, to just under one dollar per barrel today. The average well produces about 850 barrels a day on cold production, which is remarkable considering that at room temperature, the oil is as thick as peanut butter.

While economical, cold production alone recovers less than 10 percent of the oil in place. The government of Venezuela has now set recovery targets of more than 20 percent for all new heavy oil projects, which means that producers will be moving quickly to deploy current and emerging technology in a region rich in extra heavy oil.

The first step is to determine just how much oil is there, and where it is concentrated. In November 2005, Venezuela divided its original four major oil regions of the Faja into 27 blocks and began Magna Reserva, a project to quantify and certify its reserves to the international community. Geologic studies are underway now to identify the best places for new development.

Many oil companies worldwide are participating in this quantification and certification process, most with the understanding that they will be given a opportunity to share in the development from the regions they evaluate.

Changes in the Faja development plan have opened the door for new players. Many of these new faces belong to other National Oil Companies. These include ONGC from India, The Iranian PetroPars,Gazprom and Lukoil from Russia. There is also increased presence from current energy partners; Petrobras, Repsol and CNPC.

Testing new technology
PDVSA's goal is to boost its Faja production to 1.2 million barrels a day, and the country's total production to 5.8 million barrels a day by 2012. To reach that goal, producers are focusing on a range of new technologies, particularly in the Faja.

Since most cold production wells cannot handle thermal production, most of the advanced technology will be deployed in new development projects, after the current quantification and certification process is complete. The Faja may possibly overshadow Canada to become the world's center of excellence for heavy oil production.

Technology will be developed specifically for the Faja that is not available today. Improved seismic interpretation of the Faja sands, more efficient well placement techniques through better thermal simulation and increased reliability of artificial lift methodologies are just a few of the future areas of focus for Faja technology development One of the most anticipated new techniques is a process to upgrade the heavy oil downhole. In-situ processing would be much less expensive than transporting the heavy crude itself to upgraders or refineries.

Many observers believe that, given the excellent results from the Faja using cold production alone, the addition of thermal recovery and a host of new technologies will create the next big leap in Venezuela’s bright energy future.