I was poking around trying to de-bunk an entirely unrelated claim about world oil reserves made by one of my girlfriend’s relatives when I came across this surprising graph. As of January 2011, Venezuela has larger proven oil reserves than Saudi Arabia!!!
Or so Wikipedia says. I don’t have any reason to doubt this information, but to me it is a little jaw-dropping that their proven reserves would increase 6-fold in just a few years. IS there any reason to doubt it? Is this oil recoverable? Is there a catch, or is Venezuela really in a position to control such a whopper reserve?
All crude is not created equal. Venezuelan crude is very heavy, so you cannot directly substitute it for light crude in conventional refineries, plus it’s expensive to even get it out of the ground. Canada has reserves that rival Saudi Arabia as well, but 95% of that is tar sands, again not the same animal/vegetable/mineral as light sweet crude.
My guess as to why the reserves increased would be that with technological advances and the crude price in the $100/barrel range those heavy oil reserves became economically viable to recover.
My understanding, and I’m not a chemist or an oil expert, is that Venezuela has a lot of oil but it is heavy and high in sulfur, not the good stuff that comes out of Alaska, the North Sea and the Mideast. Same thing with Mexico. Lots of oil but not the good stuff.
As Implicit said, there is an immense amount of oil in the Canadian oil sands. Getting it out is an expensive proposition. Same with the the Rocky mountains and the trillions of barrels locked in the shale. There’s plenty of oil, but at what cost?
I’ll add that Brazil potentially has massive recoverable offshore reserves. It appears to be fairly good quality crude, too. It’ll be a few years, though, before we really know what they’ve got.
Moderately higher than the alternative, but affordable, certainly. It’s already being pumped now and odds are some may have made it into your gas tank. It’s definitely viable around $3.00/gallon gas (and the implicity price per barrel of crude), and as they develop it the price will go down.
No, the Orinoco heavy oil is mostly on land, although the basin does extend offshore.
There is also quite a bit under Lake Maricaibo which tends to be lighter.
Vwenezual has about 180 rigs, 100 are involved in repairing wells, the other 80- are drilling new wells (source BHI rigcount and PDVSA public statements). There are 46 rigs capable of working on water, all except 4 are for work on Lake Maricaibo. The remaining 4 are two drill ships (one in dock undergoing modification) and two jack ups, one of which is stacked (not working) (Source RigZone rig count). There was a semi sub , the Aban something or the other, but it sank.
All of which is to say, most of the work in Venezuala is on land or lake Maricaibo.
One other issue with the heavy oil is that PDVSA needs to use their light crude to dilute the heavy crude to allow it to be pumped down pipelines and refined. The net effect is to keep the production volumn up, but of a total lower value crude. Also as mentioned heavy crude, particularly that with sulphur in it, requires some fairly high end refinery processes not found in Venezuala.
One story I heard (and I seem to hear a lot of unreliable things) is that massive deposits were discovered offshore after the flight of rigs from the Gulf of Mexico after the big spill. That explains the timing of the find, but doesn’t jibe with what the rest of you are saying. So I am still curious about the timing- have they known about these deposits all along but they ‘didn’t count’ until they became viable with $100/barrel oil, or is there another explanation?
Anyway, so it is ‘heavy crude’ with lots of sulfur. I’ll have to do some research on my own, but maybe some of you can answer how that compares to Canada’s oil sands? For instance, the Saudis are pumping ~12 million bbl a day of their light crude. The Canadians have huuuge deposits, but output from the tar sands is limited. Is the heavy crude easier to work with than tar sands (in the long run), or is this the kind of deposit that might produce 1-2 million bbd for the next 150 years? And how long a wait should I expect before significant quantities of Venezuelan exports come to market?
It’s far easier to work with heavy crude than tar sands. The actual yield from tar sands is quite low compared to heavy crude, on many bases.
Venezuela has billions, possibly trillions of barrels worth of heavy bitumen, which requires injection of steam and emulsifier (from which they make Orimulsion) to retrieve it, and even when it comes up to the surface it’s not terribly usable, requiring more refining to turn it into oil. I went down to Venezuela to study it, and could talk for days about the process…but I’ll refrain.
IIRC you have a jug of this stuff in your garage. Same stuff?
If you’d rather not lecture me for days I understand. I am just trying to form a mental picture of heavy crude, map out some of the basic maths of it, and decide if this is or isn’t a reason to worry less about things like peak oil or mid-east instability, and also whether or not it means some ginormous industry is about to spring up in Venezuela. Maybe a guy could let the Venezuelans extract it, then import it to a craft refinery in Mexico for processing? Or is it still too big a pain even at $100 a barrel?
Hah! Yes I do, it’s about 1 liter of solid bitumen now, probably not too far off what it looks like from deep underground.
You are correct, there have been plans to do similar things, but overall Venezuela has too many other low-hanging fruit right now to focus on the bitumens.
Historically most assessments of the world’s reserves of oil considered only conventional resources and excluded the extra heavy oil and bitumen resources (10° API specific gravity). However, these resources are increasingly becoming commercially viable and are now being included in reserve estimates. As far as I can tell the change is the result of the estimate by Petróleos de Venezuela S.A. reflecting what is now technically and economically viable to recover from the Orinoco Belt. In fact the 2009 U.S. Geological Survey estimate(pdf) based only on what is technically possible to extract from Orinoco and not economics is about double the one you cited in your OP and the total amount of oil contained is double that again (obviously not all of the bitumen it is recoverable).
Conventional heavy crude requires more energy than light crude to pump it out of the ground and as you mention there are contaminants (sulfur and heavy metals), but there are already refineries worldwide that can process conventional heavy crude.
In contrast, extra heavy oil or bitumen is essentially solid (think road asphalt). To end up with a marketable product you require two steps, first you need to get it out of the ground and then you need to upgrade or dilute the bitumen to end up with something resembling conventional crude that can be transported via pipeline or ship. I’m not up to speed on the extraction methods being used for Orinoco since I’ve been out of the industry for a while. There are likely many different methods (see the wiki page linked in the quote above) since some of the fields have heavy oil as well as the extra heavy bitumen deposits. There is a long term plan for development of the Orinoco Belt by the Venezuelan state owned oil company detailed here: http://en.wikipedia.org/wiki/Orinoco_Belt#Orinoco_Oil_Sands
Tar sands near the surface in Alberta are extracted by strip mining, basically digging the sand out of the ground with huge machines, and then steam is used to separate the bitumen from the sand. Deeper deposits are recovered in situ using steam assisted methods. The recovered tar/bitumen must then be upgraded, cracking up the very large molecules and removing the sulfur/heavy metals. The resulting synthetic crude is similar to light sweet crude and can be sent to refineries.
