VENEZUELA - The Geology.

The Venezuelan land area embraces some 920,000 sq km lying between the Equator and latitude 10 degrees north. The western part of the country comprises two northerly trending mountain chains which are the result of the bifurcation of the Andes. Between them lie two major bodies of water, Lake Maracaibo and the Gulf of Venezuela.

The northern Caribbean coast is marked by an east-west trending chain of mountains which formed as a result of movements at the junction of the South American and the Caribbean tectonic plates. To the south of this range, the Orinoco and Apure rivers drain from the west and the south-west before debouching via a large delta into the Atlantic Ocean. The area south of Orinoco is composed of mountains in which basement rocks of the Guyanan shield are cut by a series of northerly draining tributaries of the Orinoco.

The Orinoco-Apure river system effectively divides the country in two. Most of the southern half is non-prospective while the northern half, along with Lake Maracaibo, a total area of about 350,000 sq km, contains the world's greatest hydrocarbon reserves. The bitumen-rich area, along the northern bank of Orinoco, is often referred to as the "Faja", or the "Orinoco Tar Belt". Step-out drilling has taken place around fields in the north-west and south-east of Lake Maracaibo and northern Monagas. These concepts rendered in 2002 a major new discovery called Ceuta-Tomoporo.

The three major petroliferous basins of Venezuela are, from west to east, the Maracaibo Basin, the Barinas-Apure Basin and the Oriental Basin. Falcon, a fourth basin, is to the east of Lake Maracaibo but is insignificant compared to the others.

The petroleum geological history of Venezuela is linked to the opening of the Atlantic in the Mesozoic age. Subsequent development of basins and the neighbouring orogenic uplifts have been associated with the movements of the South American and Caribbean tectonic plates in the period between the Tertiary to Recent ages.

Of major importance to geologists was the deposition throughout the sedimentary area in the Late Cretaceous of organic-rich, bituminous shales and limestones providing prolific source rocks in all four basins. Subordinate source rocks are found in the Tertiary which are often gas-prone.

PDVSA geologists are excited by a new play some believe has the potential to rival that of African success stories such as Algeria and Sudan. Based on the premise of Venezuela's ancient geological link with Africa, PDVSA has focused on an under-explored south-west region of Venezuela known as the Western Llanos. Outcrop studies over the last six years have identified some pre-Cretaceous source rocks and oil seepage in the Andean region. Some Palaeozoic formations run too deep for commercial purposes but an encouraging trend at about 12,000 feet or less has been identified.

Reservoir rocks in Venezuela range from fractured basement to Late Tertiary and for the most part have sandstones with subordinate limestones. The sandstone depositional environments range from being open marine through deltaic to fluviatile.

There is a wide variety of traps from those associated with normal faulting on the passive side of basins to complex fold-fault traps where overthrusting has resulted from mountain building at active basin margins. Many traps also have a stratigraphic element in them.

The Maracaibo Basin, with an area of 50,000 sq km, is the most important in Venezuela and almost 40 bn barrels of oil have been extracted from it. In recent years the basin has produced more than half a billion barrels per annum. The centre of the basin is occupied by the shallow waters of Lake Maracaibo. The main producing areas extend from the shore out into the lake, with the greatest concentration of fields being in the northern portion. The onshore fields contain heavy and medium oils, while in the offshore medium and light crude oils predominate.

The few discoveries in the south of Lake Maracaibo are gas/condensate fields. The oils tend to segregate with the lighter crudes. Condensates in that area are being found in the older and deeper formations.

In 1995 PDVSA allocated two areas of the Maracaibo Basin - Catatumbo and La Ceiba - for participation by foreign oil companies and the awards were made in late January 1996. These were among eight E&P blocks taken up by foreign companies.

The eastern seaboard, an area of some 2,000 sq km, is underlain by what is essentially one single hydrocarbon accumulation. This area has been divided into a number of "fields" strictly for administrative purposes. Production there has been enhanced for the last three decades by the use of steam soaking in the onshore fields to lift viscous crude oils from shallower reservoirs.

The Oriental Basin is the second most important hydrocarbon province in Venezuela. It is divided into two sub-basins, the western Guarico Basin and the eastern Maturin Basin extending along the northern side of Orinoco. The Guarico Basin fields are not important producers at present.

In contrast, the Maturin Basin has accounted for about 25% of Venezuela's oil production. The basin dips northward off the Guyanan shield and deepens into the foredeep to the south of the Coastal Range. The oldest producing fields, the Oficina group, lie in the centre of the basin.

To the south, as the section thins to the shield, a series of antithetic faults give rise to numerous traps containing heavy to extra-heavy crude oils; but as a result of high reservoir temperatures, these oils have relatively low viscosity and can be produced without extra stimulation.

These fields merge gradually southwards into "the Orinoco Tar Belt" which has in place more than 1,600 billion barrels of extra-heavy oils and bitumen. These are not conventional, though President Chavez wants them classed as such by OPEC and the IEA (see OMT), and require special technologies and huge investment to exploit.

North of the Oficina group of fields and in deeper parts of the sub-basin, crude oils become lighter. In recent years, important discoveries in the geologically complex Furrial trend have added significantly to Venezuela's proven reserves of medium to light crude oils.

The Barinas-Apure Basin comes next in importance. The basin covers about 12,000 sq km and is known to contain an extension of the rich Cano Limon trend in neighbouring Colombia. Otherwise the basin is under-explored, with some areas said likely to be rich in natural gas and condensates.

PDVSA in 1995 allocated two of these areas - Guanare and San Carlos - for participation by foreign oil companies under profit sharing agreements and the awards were made in late January 1996.

The Falcon Basin contains one "significant" field but with an estimated reserve of 50-70m barrels, which is dwarfed by Venezuelan standards. All wells in the Falcon Basin have been shut in but a foreign company has been awarded an agreement to develop the area in partnership with a PDVSA subsidiary.