Venezuela initiates certification of oil reserves

Aug 10, 2006, 21:13 GMT

Caracas - Venezuela began a project Thursday to verify oil reserves in the Orinoco Belt estimated at 235,000 barrels of crude oil per day in addition to the 80,000 barrels in proven reserves.

The Project 'Orinoco Magna Reserve,' is expected to conclude in November 2008 in Venezuela's eastern state of Monagas. President Hugo Chavez and Brazilian diplomatic representatives attended an event to mark the beginning of the process.

Venezuela's Energy and Oil Minister Rafael Ramirez stressed this as an example of cooperation between the state oil company Petroleos de Venezuela (PDVSA) and its Brazilian counterpart Petrobras, also state-owned and a participant in exploration in the Orinoco Belt.

The chairman of Petrobras Venezuela, Gerson Fernandez, said this is a 'historic event' because it strengthens already close cooperation in oil exploration.

Venezuela is the world's fifth largest crude oil exporter. However, its production is heavier than other types and commands a lower price. For example, a barrel of Venezuelan oil last week had an average price of 64.37 dollars, while West Texas Intermediate (WTI), Brent and the Organization of Petroleum Exporting Countries (OPEC) barrels were all above 70 dollars.

Petrobras announced on Monday that it is negotiating with PDVSA the creating of a joint venture to produce natural gas and liquified natural gas (LNG) in Venezuela. The agreement is expected to be formalised later this year.