The government of Venezuela relies heavily on the exportation of oil. In 2009, the total revenue of the exportation of oil was $57.59 million dollars while the exportation of non-oil was only around $3.39 million dollars. Venezuela averaged an exportation of 2.7 million barrels/day for 2009 making oil one of the most important industries in the Venezuelan economy.  The Petróleos de Venezuela S.A. (PDVSA) is the main oil company of Venezuela. PDVSA was brought under the control of the government through the Ministry of Popular Power for Energy and Petroleum in order to nationalize it in 1976. In 2011, Venezuelan President Hugo Chavez brought PDVSA under even more control by the government through legislation and oil contracts. This was an attempt to put more of the company into the hands of the government and the people of Venezuela and move away from control by foreign companies. This was meet with anger by the PDVSA and was celebrated by the people of Venezuela. These new contracts brought on an oil strike and even helped fuel a failed coup of Chavez. 
The Orinoco Oil Belt is located in the eastern part of Venezuela. It extends 375 miles along the Orinoco River.  Heavy crude oil, which makes up the most of the Orinoco Oil Belt, is very different from light oil. Heavy crude oil is defined as oil with an American Petroleum Institute (API) gravity lower than 22 degrees and a viscosity higher than 100 centipoise (cps). API gravity is how light or heavy oil is compared to water.  Extra heavy oil, which is what some of the oil in the Orinoco Belt is, has a viscosity of 10,000 cps, about the same viscosity as corn syrup. Due to the high viscosity of the oil, the recovery rate of the heavy oil is low. Low recovery rate is one of the disadvantages of heavy and extra heavy oil mining. Mining techniques such as steam assisted gravity drainage (SAGD) are helping make the recovery of heavy oil more profitable. SAGD involves digging two shafts, one above the oil and one below the oil. They then inject steam into the upper shaft. The steam condenses and heats the oil. The oil then drains, due to gravity, to the horizontal shaft under the oil field. Oil recovery could be as high as 87% which is a huge improvement over other methods currently in use for heavy oil extraction. The idea of SAGD has been around for years and was originally designed to be used in the Canadian heavy oil reservoirs. Due to restrictions on drilling techniques SAGD was not possible until recently. 
The Venezuelan Oil fields have an estimated 1,300 Billion barrels of oil according to the PDVSA. Numbers vary, sometimes significantly, because of the uncertainty of regional sandstone distribution, oil saturation, and sometimes it is just the politics of oil. Only about 300 billion barrels are considered recoverable however.  According to the 2011 OPEC Statistical Bulletin, the total proven Venezuelan oil reserves have now surpassed the proven Saudi Arabian reserves. Saudi proven oil reserves are around 264.5 billion barrels while Venezuelan proven reserves are 296.5 billion barrels.  Over the past few years, production in Venezuela has started to decrease. Many people attribute this to the world economic downturn while some may say that continuing maintenance and the increase in the consumption of oil by Venezuela accounts for the decrease.
Why has heavy oil become such a valuable resource? The answer is simple, money. In July of 2011 a barrel of oil costs $92 compared to $74.71 a year ago.  With the growing cost of gas, sources of oil that were once unused because of the cost, can compete with light oil. The fact that TransCanada is trying to build a pipeline in the United States and that both Russia and China are lending Venezuelan money to update technology and to build a pipeline means there is money to be made in heavy oil. Easier to use oils are becoming scarcer and more expensive to extract from the ground. Oil companies are now looking for the next alternative. Heavy oil may be that alternative, and a viable option for the future. With proven methods of extraction and financial backing, the Orinoco Oil fields may be the key to cheap oil in the near future.
© Michael Sojka. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
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