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Venezuela - The Orinoco Belt.

The country's ultra-heavy crude oil and bitumen deposits are located in the Orinoco Tar Belt in central Venezuela. Independent estimates put recoverable reserves along the belt at more than 270bn barrels. This 11,593 sq km belt consists of four areas: Ayacucho, Boyaca, Carabobo, and Junin. Each of these is divided into 27 blocks. Some of these areas have been auctioned, with few like one Ayacucho block given on the basis of government-to-government negotiations.

Venezuela has established over a dozen strategic associations (SAs) to exploit these resources, of which several JVs are producing a total of 1.3m b/d. These JVs convert the extra heavy crude and bitumen from about 9[degrees] API to lighter, sweeter syncrudes.

The producing Orinoco JVs and some of the ventures producing elsewhere, all controlled by PDVSA through its unit Corporacion Venezolana del Petroleo (CVP), on Oct. 30, 2007, received a final stamp of approval. The approval allowed the ventures to export crude oil and other products and required multi-million dollar deposits from minority partners Total, Statoil and BP to get the "mixed companies" under-way.

Other partners include Chevron, CNPC, Sinopec and ENI. As part of the deals, Total and Statoil were to pay $130m, while Veba Oel and Gas and Cerro Negro (a unit of BP) were to pay $50m. The deal signed with Chevron did not include a monetary contribution clause. These were funds the partners had agreed they owed CVP. The money was to be subtracted from the compensation Caracas owed the IOCs for taking majority stakes in the region's heavy crude oil-based upgraders. In the case of shared-profit oilfield ventures, Petro-Canada also left. PDVSA's compensation talks with ConocoPhillips and ExxonMobil have failed to reach a resolution as the two US majors have sued Caracas.

The Sincor upgrader JV became Petrocedeno Mixed Co., where CVP now owns 60%, Total has 30.323% and Statoil keeps 9.677%. Sincor started up in December 2000. The Original capacity was 200,000 b/d of 8-8.5[degrees] API oil, with the output of syncrude until 2009 averaging 180,000 b/d of 32[degrees] API oil.

Since then, however, the output has been much lower.

The Cerro Negro upgrader became PetroMonagas with CVP having 83.33% and a BP unit holding the rest. Cerro Negro (Carabobo) started up in November 1999. The original capacity was 120,000 b/d, 8.5[degrees] API.

The output of syncrude then averaged about 105,000 b/d of 16[degrees] API oil.

Ameriven became Petropiar Mixed Co., with CVP holding 70% and Chevron having 30%. Ameriven (Hamaca at Ayacucho) started up in October 2001. The original capacity was 200,000 b/d of 8.7[degrees] API crude.

The syncrude output then averaged 190,000 b/d of 26[degrees] API oil.

Petrozuata, in which Conoco held the majority, now is solely run by CVP. Petrozuata (Junin) started up in October 1998. Its capacity was 120,000 b/d of 9.3[degrees] API crude, with a syncrude output of 104,000 b/d of 19-25[degrees] API oils. Petrozuata has been expanded after ConocoPhillips' departure.

(See the detailed background of these ventures, as SAs, in gmt19VenzFieldsNov7-05).

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Publication:APS Review Oil Market Trends
Geographic Code:3VENE
Date:Nov 16, 2015
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