VENEZUELA - Orimulsion Drive.

PdV M&M's Orimulsion-producing unit Bitor is renewing an effort to market this boiler fuel among electric power companies in Latin America. So far, it has failed to sell Orimulsion in any of Venezuela's neighbouring countries.

Orimulsion, containing 70% bitumen and 30% water, is a controversial fuel. When it burns, this boiler fuel emits considerable amounts of sulphur dioxide (SO2), sulphur trioxide (SO3) and heavy metals. Latin American power companies have been reluctant to test the fuel, preferring to see their US counterparts first use Orimulsion before they venture into this source of energy.

However, it seems that Bitor is close to having a breakthrough in its efforts in the US. Petroleum Argus reported on Sept. 3, 2001, that the US Environmental Protection Agency (EPA) looked set to back the use of Orimulsion by US power plants. It said EPA was then wrapping up a study on Orimulsion which was to be sent to Congress within the following three weeks.

Argus said EPA tests had indicated that emissions from the combustion of the patented boiler fuel "can be adequately controlled using commercially available air pollution control technologies".

Orimulsion is being used in Canada, China, Denmark, Italy, Japan, Lithuania, and Singapore (see Gas Market Trends No. 23). Argus reported on Sept. 3 that in August 2001 Bitor signed a 20-year contract for the supply of 1.6m t/y of Orimulsion to New Brunswick Power of Canada, with delivery to begin in 2004. In July 2001, Bitor signed a ten-year contract with Power Seraya of Singapore for 1.5m t/y, also from 2004. In July Bitor signed a three-year contract with Chinese state-owned oil and gas company PetroChina for 1.2m t/y.

European Joint Ventures: PdV M&M places less emphasis on Europe than on the US and Latin America. PdV M&M's European operations, JVs in which it has 50% or less, are handled by PDV Europa BV based at The Hague.

The two main JVs in Europe are Ruhr Oel GmbH of Germany and AB Nynas Petroleum of Sweden. The Ruhr Oel JV deal was signed in 1983 and expanded in 1986 for PdV to process up to 210,000 b/d as well as have equity in Veba's refining operations in southern Germany.

The JVs included the Transalpine (TAL) and South European pipelines, and an olefins complex. In 1994/95, major upgrading work was done by Ruhr Oel, with a new vacuum distillation unit and catalytic cracker at Gelsenkirchen. In addition, projects to modernise and make its refineries more environmentally friendly were completed, making Ruhr Oel more competitive.

In 1999 PdV M&M negotiated to buy a 50% stake in Veba Oel of Germany. The stake was offered by Veba AG, the parent group which later merged with rival energy group Viag based in Munich. PdV M&M has a 50-50 venture with Veba Oel consisting of an oil refining and petrochemicals plant which produces olefins.

PdV M&M has a 50-50 venture with Ruhr Oel, another major German oil company involving a 226,000 b/d refinery at Gelsenkirchen. PdV M&M has lower stakes in three other Veba Oel refineries (see table in OMT).

It was reported in 1999 that a PDVSA decision on buying 50% into Veba Oel, including its upstream divisions, was to be taken by 2001, when PDVSA's crude oil supply contract with the German company will have expired. It was also said that PDVSA would either buy into Veba Oel or pull out of Germany altogether. In 1999 Veba Oel took full control of Aral, Germany's largest chain of gasoline stations.

AB Nynas Petroleum, a 50-50 JV of PdV M&M and Fortum (ex-Neste Oy) of Finland, has the Nynasham refinery in Sweden, with the JV deal signed in June 1986. At the time, Nynas was a unit of Axel Johnson & Co.

In the late 1980s, Neste Oy joined the Nynas venture, which had also included the Swedish Investment Bank. New desulphurisation units were installed subsequently as part of a drive to cut sulphur emission at its facilities in Antwerp and Dundee.