ÿþ<html xmlns:xsi="http://www.w3.org/2000/10/XMLSchema-instance" xmlns:my="http://localhost/namespace"> <head> <META http-equiv="Content-Type" content="text/html; charset=UTF-16"> <title>Venezuela Energy Data, Statistics and Analysis - Oil, Gas, Electricity, Coal</title> <meta name="description" content="Venezuela Energy Data, Statistics and Analysis - Oil, Gas, Electricity, Coal"> <meta name="keywords" content="Venezuela Energy Data, Statistics and Analysis - Oil, Gas, Electricity, Coal"> <meta http-equiv="pragma" content="no-cache"> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"><script language="JavaScript" src="../scripts/printme.js" type="text/javascript"></script><script language="JavaScript" src="../scripts/eia_header.js" type="text/javascript"></script><script language="JavaScript" src="../scripts/eia_footer.js" type="text/javascript"></script><LINK HREF="../eia_sitewideF.css" TYPE="text/css" REL="StyleSheet"><map name="Map"><area shape="rect" coords="3,4,73,59" href="http://www.eia.doe.gov" alt="Energy Information Administration Home " title="Energy Information Administration Home"> <area shape="rect" coords="76,10,379,48" href="../index.html" alt="Country Analysis Briefs" title="Country Analysis Briefs"></map><LINK HREF="../cabs.css" TYPE="text/css" REL="StyleSheet"> </head> <body style="margin: 0px;"> <table summary="" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td colspan="3"><script language="JavaScript">InsertEIAHeaderCode();</script></td> </tr> <tr> <td width="595" style="background:url(../images/R4_03.jpg)"> <div class="cssBreadcrumbs"><a href="http://www.eia.doe.gov">Home</a> &gt; <a href="http://www.eia.doe.gov/international">International</a> &gt; <a href="../index.html">Country Analysis Briefs</a> &gt; Venezuela</div> </td> <td width="9000" style="background:url(../images/R4_04.jpg)"><img src="../images/R4_04.jpg" alt="Country Analysis Briefs"></td> <td style="background:url(../images/R4_04.jpg)" align="right"><a href="../index.html"><img src="../images/R4_05.jpg" alt="Country Analysis Briefs" border="0"></a></td> </tr> <tr> <td style="background:url(../images/R4_06.jpg)" id="header_text"><img src="../images/Blank.gif" width="595" height="1"><br><span class="cssCountryTitle">Venezuela</span></td> <td style="background:url(../images/R4_07.jpg)"></td> <td style="background:url(../images/R4_07.jpg)" align="right"><a href="../index.html"><img src="../images/R4_08.jpg" alt="Country Analysis Briefs" border="0"></a></td> </tr> <tr valign="top"> <td colspan="2" style="background:#FFFFFF" id="main"> <table summary="" width="100%"> <tr valign="top"> <td></td> <td align="left"><span class="cssHeader1">Oil</span></td> </tr> <tr valign="top"> <td width="150" class="cssTakeAway">Venezuela was the world s eleventh-largest net oil exporter in 2009. </td> <td class="cssContent"> <div>According to <span style="font-style: italic;">Oil and Gas Journal</span> (<span style="font-style: italic;">OGJ</span>), Venezuela had 211 billion barrels of proven oil reserves in 2011, the second largest the world. This number constitutes a major upward revision  last year the same publication listed the country s reserves at 99.4 billion barrels. The update results from the inclusion of massive reserves of extra-heavy oil in Venezuela s Orinoco belt. Venezuela is a significant supplier of crude oil to the world market: in 2009 the country had net oil exports of 1.75 million barrels per day (bbl/d), eleventh-largest in the world and the largest in the Western Hemisphere. In recent years, crude oil production in the country has fallen, while domestic consumption has risen, causing a decline in net oil exports. EIA estimates the Venezuelan net exports fell again in 2010, to 1.59 million bbl/d. <p></p> </div><span class="cssSubheading1"><div align="center" title="Chart of Western hemisphere countries reserves and production" style="page-break-inside: avoid;"><img src="images/Oil Reserves and Production in Western Hemisphere.gif" alt="Chart of Western hemisphere countries reserves and production" border="0" style="" class="cabs_graphic"></div></span><br><span class="cssSubheading1"></span><br><span class="cssSubheading1">Sector Organization</span><br><div>Venezuela nationalized its oil industry in the 1970s, creating Petroleos de Venezuela S.A. (PdVSA), the country's state-run oil and natural gas company. Along with being Venezuela's largest employer, PdVSA accounts for a significant share of the country s GDP, government revenue and export earnings.<a name="strike"></a> In 2002, nearly half of PdVSA s employees walked off the job in protest against the rule of President Chavez, largely bringing the company s operations to a halt. In the wake of the strike, PdVSA fired 18,000 workers  industry analysts speculate that the company never full recovered from the human capital impacts of this move.<p></p> </div> <div>During the 1990s Venezuela took steps to liberalize the petroleum sector. However, since the election of Hugo Chavez in 1999, Venezuela has increased public participation in the oil industry. The Chavez government initially raised tax and royalty rates on new and existing projects and mandated majority PdVSA ownership of all oil projects. In 2009 and 2010 Venezuela nationalized oil field service firms and infrastructure in response to these firms failure to renegotiate their contracts. Venezuela is also increasing pressure on foreign operators that remain in the country to increase investment to offset recent production declines.<p></p> </div><span class="cssSubheading1">Exploration and Production</span><br><div>EIA estimates that the country produced around 2.36 million bbl/d of oil in 2010. Crude oil represented 2.09 million bbl/d of this total, with condensates, natural gas liquids (NGLs) accounting for the remaining production. Estimates of Venezuelan production vary from source to source, largely due to measurement methodology. For instance, some analysts directly count the extra-heavy oil produced in Venezuela s Orinoco Belt as part of Venezuela s crude oil production. Others (including EIA) count the upgraded syncrude, which is about 10 percent lower than the volume of the original extra-heavy feedstock. EIA estimates that Venezuela s crude oil production dropped again in 2010, to 2.09 million bbl/d. Natural decline at older fields, maintenance issues, and compliance with OPEC production cuts are behind this trend. Venezuela s OPEC production target is currently 1.99 million bbl/d.<p></p> </div><span class="cssSubheading2"></span><br><div> <div align="center" title="Chart of Venezuela's oil production and consumption 1990-2010" style="page-break-inside: avoid;"><img src="images/Oil Prod&amp;Cons 1990-2010.gif" alt="Chart of Venezuela's oil production and consumption 1990-2010" border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>Venezuela's conventional crude oil is heavy and sour by international standards. As a result, much of Venezuela s oil production must go to specialized domestic and international refineries. The country s most prolific production area is the Maracaibo basin, which contains slightly less than half of Venezuela s oil production. Many of Venezuela s fields are very mature, requiring heavy investment to maintain current capacity. Industry analysts estimate that PdVSA must spend some $3 billion each year just to maintain production levels at existing fields, given decline rates of at least 25 percent.<p></p> </div><span class="cssSubheading1">Orinoco Heavy Oil Belt</span><br><div>Venezuela contains billions of barrels in extra-heavy crude oil and bitumen deposits, most of which are situated in the Orinoco Belt in central Venezuela. According to a study released by the U.S. Geological Survey, the mean estimate of recoverable oil resources from the Orinoco Belt is 513 billion barrels of crude oil. PdVSA began the  Magna Reserva project in 2005, which involved dividing the Orinoco region into 27 blocks and quantifying the reserves in place. This initiative resulted in the upgrading of Venezuelan reserve estimates by more than 100 billion barrels.<p></p> </div> <div> <div align="center" title="Map of Orinoco Belt oil basins." style="page-break-inside: avoid;"><img src="images/ve_oil_blocks.gif" alt="Map of Orinoco Belt oil basins." border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>In the 1990 s Venezuela established four strategic associations to exploit these resources, later converting them to mixed companies with majority PdVSA ownership. These projects involve converting the extra heavy crude and bitumen to lighter, sweeter crude, known as syncrude. The upgrading facilities themselves introduce another element of risk into Venezuela s petroleum supply chain. While the country s four upgraders have installed production capacity of about 600,000 bbl/d of syncrude, industry estimates place these projects production levels at less that 500,000 bbl/d due to maintenance and safety problems.<p></p> </div> <div>Venezuela plans to further develop the Orinoco Belt oil resources in the coming years. In 2009 Venezuela signed bilateral agreements for the development of four major blocks in the Junin area. Last year the country awarded two more major development licenses in the Carabobo region. Venezuela expects these projects to add more that 2,000,000 bbl/d of heavy oil production capacity by the end of the decade (see table).<p></p> </div> <div> <div align="center" title="Chart listing Orinoco projects." style="page-break-inside: avoid;"><img src="images/Existing and Planned Orinoco Belt Projects.gif" alt="Chart listing Orinoco projects." border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>Venezuela was able to secure these recent agreements due to the minimal exploration risk Orinoco Belt projects entail. However, given recent regulatory and operational problems, considerable uncertainty surrounds the future of Orinoco production.<p></p> </div><span class="cssSubheading1">Exports</span><br><div>Venezuela s petroleum exports have dropped by almost 50 percent, since peaking at 3.06 million bbl/d in 1997. Venezuela sends a large share of its oil exports to the United States because geographic proximity enhances export profitability and because refineries on the U.S. Gulf Coast are specifically designed to handle heavy Venezuelan crude. Currently, Venezuela is the United States fifth largest supplier of imported petroleum. <p></p> </div> <div>However, U.S. imports from Venezuela have declined in recent years. In 2010, the United States imported 987,000 bbl/d of crude oil and petroleum products from Venezuela, just 8.3 percent of total American imports. Even factoring in 255,000 bbl/d of imports from the U.S. Virgin Islands, which are almost exclusively petroleum products refined from Venezuelan crude, the significance of Venezuela to the American energy sector is in decline (see chart).<p></p> </div> <div> <div align="center" title="Venezuela and US Virgin islands share of US petroleum imports." style="page-break-inside: avoid;"><img src="images/Venezuela and USVI Share of US Imports 1990-2010.gif" alt="Venezuela and US Virgin islands share of US petroleum imports." border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>In recent years, Venezuela has attempted to diversify its export destinations away from the United States. Besides the United States, other important destinations of Venezuelan petroleum exports include the Caribbean, Europe and Asia (see chart). One of the fastest growing destinations of Venezuelan crude oil exports has been China. In 2010, China imported 125,900 bbl/d of crude oil from Venezuela, up from only 39,000 bbl/d in 2005. <p></p> </div> <div> <div align="center" title="Chart listing Venezuelan crude oil exports by destination." style="page-break-inside: avoid;"><img src="images/Venezuela Exports by Destination, 2010.gif" alt="Chart listing Venezuelan crude oil exports by destination." border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>Venezuela provides a sizable amount of crude oil and refined products to its regional neighbors at below-market prices and with favorable financing terms. Under the Petrocaribe initiative, Venezuela provides crude oil and refined products to numerous countries in the Caribbean and Central America, offering favorable financing and long repayment terms that often feature barter arrangements instead of cash transactions. In addition, Venezuela has a separate supply agreement with Cuba. According to industry reports, these preferential supply agreements amount to more than 400,000 bbl/d of Venezuelan exports.<p></p> </div> <div> <p></p> </div><span class="cssSubheading1">Refining</span><br><div>According to <span style="font-style: italic;">OGJ</span>, Venezuela had 1.28 million barrels per day (bbl/d) of crude oil refining capacity in 2011, all operated by PdVSA. The major facilities include the Paraguana Refining Center (940,000 bbl/d), Puerto de la Cruz (195,000 bbl/d), and El Palito (126,900 bbl/d). Through PdVSA and its subsidiary CITGO, Venezuela also controls significant refining capacity outside of the country (see chart). <p></p> </div> <div> <div align="center" title="Chart of Venezuela's global oil refining capacity." style="page-break-inside: avoid;"><img src="images/PdVSA Crude Oil Refining Capacity by Region.gif" alt="Chart of Venezuela's global oil refining capacity." border="0" style="" class="cabs_graphic"></div> <p></p> </div> <div>The largest share of Venezuela s global downstream operations is in the United States. CITGO, a wholly-owned subsidiary of PdVSA, operates three refineries (Lake Charles, LA; Corpus Christi, TX; Lemont, IL), with a combined crude oil distillation capacity of 755,400 bbl/d. CITGO s gulf coast refineries source most of their crude oil with PdVSA under long-term supply contracts. PdVSA also owns a 50-percent stake in the 189,000-bbl/d Chalmette facility in Louisiana. <p></p> </div> <div>In 2009 ConocoPhillips exercised the option to purchase PdVSA s share of their refinery in Sweeny, Texas. This move, coupled with Venezuela s sale of its equity stake in Germany s Rurh Oel to Rosneft, constitutes a substantial contraction of Venezuela s net global capacity. Minor equity acquisitions in the Caribbean have partially offset this change. Venezuela plans to expand to other global refining markets. Notable planned refinery builds include and 400,000-bbl/d joint venture with PetroChina in Guandong province and a 230,000-bbl/d joint venture with Petrobras in northeastern Brazil. <p></p> </div> </td> </tr> </table> <p></p> </td> <td style="background:url(../images/R4_BG.jpg); background-position:right;" align="right"><a href="../index.html"><img src="../images/R4_10.jpg" alt="Country Analysis Briefs" border="0"></a><p></p> <table summary="" class="cssMenu" cellpadding="0" cellspacing="0" align="right"> <tr class="cssTableSpacer"> <td class="cssHeader2White" style="text-align:right; padding-right:10px">March 2011</td> </tr> <tr class="cssTableSpacer"> <td></td> </tr> <tr class="cssMenu_b"> <td><a href="Background.html">Background</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu_b"> <td><a href="Oil.html">Oil</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu_b"> <td><a href="NaturalGas.html">Natural Gas</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu_b"> <td><a href="Electricity.html">Electricity</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu_b"> <td><a href="Links.html">Links</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu_b"> <td><a href="Sources.html">Sources</a></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu3"> <td>Full Report<br></td> </tr> <tr class="cssMenuRegion"> <td><a href="Full.html" target="_newWin">HTML</a><br></td> </tr> <tr class="cssMenuRegion"> <td><a href="pdf.pdf" target="_newWin">PDF</a><br></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> <tr class="cssMenu3"> <td>Contact Info</td> </tr> <tr class="cssMenu2"> <td><span class="cssMenu2Printer"><a href="mailto:cabs@eia.gov">cabs@eia.gov</a><br>(202)586-8800<br><a href="../Contacts.html">[more contacts]</a></span></td> </tr> <tr class="cssMenu_a"> <td><img src="../images/R4_Shadow.jpg" align="right" hspace="0" vspace="0"></td> </tr> </table> </td> </tr> <tr> <td colspan="3"><script language="JavaScript">InsertEIAFooterCode();</script></td> </tr> </table> </body> </html>