More Orinoco Heavy Oil Reservoirs Go on Sale :Good or Bad ?

PetroleumWorld ^ | 8 Nov. 2008 | Gustavo Coronel

[WellyP]

For the last 30 years the heavy oil deposits of the Orinoco river area in Venezuela have been developed at a snail's pace. Although the area has been known to contain over 200 billion barrels of recoverable oil since a study made by Venezuelan geologists J. A. Galavis and H. Velarde was presented at the World Petroleum Congress in Mexico City, in 1967, production from this is still very modest, as compared to reserves.

[WellyP]

Gustavo Coronel is a 28 years oil industry veteran, a member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), author of several books.

[Greenpees]

Two obvious points:

It’s always good when more of a comodity goes into the market (at least for consumers)

and..It’s bad thet Chavez has the resources to prop up his corrupt gov’t.

Another consideation is that Chavez will get desperate, and jump the proverbial shark. Driving the price down cannot make OPEC happy, seeing as how they cut production to enable the opposite. As good as he’s been at understanding economics, I could see the clown depressing his own income.

[WellyP]

Chavez has budgeted for $100 per barrel oil. The country is 40% upside down right now with oil at about $55 per barrel. If Chavez (or Iran and Russia) can not reverse the prices of oil they can not cause much trouble. Venezuelan reserves are so low that the country will be unable to pay for most of its imports within 4 months. Iran can not produce more than 25% of its own diesel and imports the rest from Dubai. The Russian markets have tanked by 70% since Feb. and the lack of inward investment has crippled growth. We should no NOTHING except rejoice. Do nothing right now that would rattle the cages and drives up oil prices.

OPEC Basket $54.89 11/06
Venezuelan Basket: $52.96 11/07
11/07:BRENT IPE $57.35 NYMEX WTI $60.04
11/07: US$/VBOF:Parallel 5.00-buy 5.20-sell
11/07: 1 Euro:1.2717 US $ (2200 GMT )

[Tainan]

Time to hold ‘em and watch the other fella start sweatin’.

[Jimmy Valentine's brother]

Venezuelan oil has a high sulfur content. Very few refineries are capabile of distilling and cracking. Most are in the USA. Chavez is not maintaining the Venezuela’s oil infrastructure. Chavez need to sell the rights but only succors would buy.

One last item, the Rockerfeller family used to be big players in Venezuelan oil. I don't know how much the family trust holds now - boycott CITGO.

[dirtbiker]

...boycott CITGO.

Already have, 5 years ago.

So far, in this county, 2 have closed down, 1 is about to, and 1 has switched from CITGO to SUNOCO....

[PeteB570]

All the CITGOs in my part of town have gone Marathon Oil.

[dirtbiker]

Where I work at in another county, all their CITGO's are either Marathon or BP/Amoco....

I guess the Kennedy's are still peddling "cheap" CITGO heating oil in the Northeast, though I haven't heard any commercials....

[FastCoyote]

“We should no NOTHING except rejoice.”

You betcha. And just where is Hugo going to get investment capital and/or expertise to open up new fields of low grade Venezuelan sludge? Good luck Bucko, hope they find a nice lamppost to hang you from and not some tree.

[BfloGuy]

Where I work at in another county, all their CITGO's are either Marathon or BP/Amoco....

I guess the Kennedy's are still peddling "cheap" CITGO heating oil in the Northeast, though I haven't heard any commercials....

Don't believe for one tiny moment that CITGO has stopped selling gasoline in the U.S.. They may not sell it at retail under their own name, but that doesn't stop them from supplying it wholesale to other distributors.

You may be running CITGO gas in your car even today -- you just don't know it. This boycott was an exercise in feel-good economics; didn't accomplish a thing except drive up expenses of local stations that had to go through the bother of changing their signs.