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Venezuela's crude gold mine?

A tar-like substance found in the bitumen belt region near the Orinoco River could mean that Venezuela has the world's largest oil reserves--larger even than Saudi Arabia.

No one knows for sure if the extra-heavy Orinoco oil will make a viable fuel. Tests currently under way will take years to complete. If they prove successful, however, Venezuela could lay claim to an "additional" 270 million barrels of oil reserves, thereby increasing the country's total reserve to almost 330 billion barrels and outstriping Saudi Arabia's reserves, currently estimated at 255 billion barrels.

At first the sticky substance was believed too heavy for commercial use. Since then, Petroleos de Venezuela (PDVSA), the country's state-owned oil monopoly, claims that it has developed the technology to combine the heavy oil with an emulsifier to produce "orimulsion," a fuel that may be able to compete with coal and the fuel-oil burned in power stations.

Some 50,000 barrels a day of orimulsion are presently being produced. Of this, 15,000 barrels are being used and tested in power stations in Sweden, Canada, Great Britain and Japan. Florida Power & Light Co. is expected to start testing this year in the United States.

According to Petroleum Economist magazine, the British company, PowerGen, has signed a six-year contract to purchase up to one million tons of orimulsion a year from Venezuela starting in 1991. Reports of heavy pollutant levels in the oil, however, have cast doubts on its viability as a commercial fuel.

Nevertheless, PDVSA is confident it can improve the viability of the fuel by lowering sulphur and carbon dioxide emission. Even so, extraction and production costs will be considerably higher than those of regular crude oil.

Regardless, Venezuela expects to export 600,000 barrels of orimulsion a day by 1995, thus increasing its total oil exports by 25 percent and putting Venezuela over its current OPEC quota. To resolve the problem, Venezuela is claiming that orimulsion is bitumen-based and should therefore be classified as coal, not oil.

Is orimulsion oil, coal or some kind of sludge? To date OPEC has not ruled on the question, just one of several surrounding this novel and still-unclassified fuel.
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Title Annotation:Americas: !Ojo!; prospects of fuel use of Venezuela's huge reserve of tar-like substance, extra-heavy oil near the Orinoco River
Author:Goethals, Henry
Publication:Americas (English Edition)
Date:Nov 1, 1990
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