Energy policy of Venezuela
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Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
has the largest
conventional oil Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...
reserves and the second-largest
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
reserves in the Western Hemisphere. In addition Venezuela has non-conventional oil deposits ( extra-heavy crude oil, bitumen and
tar sands Oil sands, tar sands, crude bitumen, or bituminous sands, are a type of unconventional petroleum deposit. Oil sands are either loose sands or partially consolidated sandstone containing a naturally occurring mixture of sand, clay, and wate ...
) approximately equal to the world's reserves of conventional oil. Venezuela is also amongst world leaders in hydroelectric production, supplying a majority of the nation's electrical power through the process.


Development of energy policies

On 29 August 1975, during the tenure of President Carlos Andrés Pérez, "Law that Reserves the Hydrocarbon Industry to the State" was enacted and the state-owned company
Petróleos de Venezuela Petróleos de Venezuela, S.A. (PDVSA, ) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and production ...
(PDVSA) was created to control all oil businesses in the Venezuelan territory. The law came into effect on 1 January 1976, as well as the nationalization of the oil industry with it, after which PDVSA began commercial operations.


Primary energy sources


Oil

Venezuela has been producing oil for nearly a century and was an OPEC founder-member. In 2005, Venezuela produced 162 million tons of oil, which is 4.1% of world's total production. By the oil production Venezuela ranks seventh in the world. Venezuela is the world's eight oil exporter and fifth largest net exporter. In 2012, 11 percent of US oil imports came from Venezuela. Since 2010, when the heavy oil from the Orinoco Belt was considered to be economically recoverable, Venezuela has had the largest proved reserves of petroleum in the world, about 298 billion barrels. Oil accounts for about half of total government revenues. The leading oil company is Petróleos de Venezuela S.A. (PDVSA), which according to Venezuelan authorities produces . However, oil industry analysts and the U.S. Energy Information Administration believe it to be only 2.8-. Venezuela's main oil fields are located at four major sedimentary basins: Maracaibo,
Falcón ) , anthem = , image_map = Falcon in Venezuela.svg , map_alt = , map_caption = Location within Venezuela , pushpin_map = , pushpin_map_alt = , pushpin_mapsiz ...
,
Apure Apure State ( es, Estado Apure, ) is one of the 23 states of Venezuela. Its territory formed part of the provinces of Mérida, Maracaibo, and Barinas, in accordance with successive territorial ordinations pronounced by the colonial autho ...
, and Oriental. PdVSA has of crude oil refining capacity. The major facilities are the Paraguaná Refining Center,
Puerto de la Cruz Puerto de la Cruz is a city and municipality in the northern part of the island of Tenerife, Canary Islands, Spain. It was formerly known by its English translation, "Port of the Cross", although now it is known by its Spanish name in all lang ...
, and El Palito.


Natural gas

As of 2013, Venezuela has the eighth-largest proved
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
reserves in the world and the largest in South America. Proved reserves were estimated at 5.5 trillion cubic meters (tcm). However, inadequate transportation and distribution infrastructure has prevented it from making the most of its resources. More than 70% of domestic gas production is consumed by the petroleum industry. Nearly 35% of gross natural gas output are re-injected in order to boost or maintain reservoir pressures, while smaller amounts (5%) are vented or flared. About 10% of production volumes are subject to shrinkage as a result of the extraction of NGLs. The 2010 estimate is , and the nation reportedly produced about in 2008. The leading gas company is PdVSA. The largest private natural gas producer is
Repsol-YPF Repsol S.A.
El Nuevo Herald, 2012-05-31
Originally an init ...
, who supplies 80-megawatt (MW) power station in Portuguesa, and plans to develop a 450-MW power plant in Obispos.


Tar sands and heavy oils

Venezuela has non-conventional oil deposits (extra-heavy crude oil, bitumen and
tar sands Oil sands, tar sands, crude bitumen, or bituminous sands, are a type of unconventional petroleum deposit. Oil sands are either loose sands or partially consolidated sandstone containing a naturally occurring mixture of sand, clay, and wate ...
) at approximately equal to the world's reserves of conventional oil. About of this may be producible at current prices using current technology. The main deposits are located in the Orinoco Belt in central Venezuela ( Orinoco tar sands), some deposits are also found in the Maracaibo Basin and Lake Guanoco, near the Caribbean coast.


Coal

Venezuela has recoverable coal reserves of approximately 528 million short tons (Mmst), most of which is bituminous. Coal production was at 9.254 million short tons as of 2007. Most coal exports go to Latin American countries, the United States and Europe. The main coal company in Venezuelas is Carbozulia, a former subsidiary of PdVSA, which is controlled by Venezuela's state development agency Corpozulia. The major coal-producing region in Venezuela is the Guasare Basin, which is located near the Colombian border. The coal industry development plans include the construction of a railway linking coal mines to the coast and a new deepwater port.


Electricity

The main electricity source is hydropower, which accounts for 71% in 2004. A gross theoretical capability of hydropower is 320 TWh per annum, of which 130 TWh per annum is considered as economically feasible. In 2004, Venezuela produced 70 TWh of hydropower, which accounts 2.5% of world's total. At the end of 2002, total installed hydroelectric generating capacity accounted 13.76 GW with additional 4.5 GW under construction and 7.4 GW of planned capacity. Hydroelectricity production is concentrated on the
Caroní River The Caroní River is the second most important river of Venezuela, the second in flow, and one of the longest, from the Kukenan tepui through to its confluence with the Orinoco River. The name "Caroní" is applied starting from the confluence ...
in
Guayana Region The Guayana Region is an administrative region of eastern Venezuela. History In the 1970s, after the process of forming the Political-Administrative Regions through CORDIPLAN in the government of Rafael Caldera, the Region of Guyana was f ...
. Today it has 4 different dams. The largest hydroplant is the
Guri dam The Simón Bolívar Hydroelectric Plant, also Guri Dam ( es, Central Hidroeléctrica Simón Bolívar or ''Represa de Guri''), previously known as the Raúl Leoni Hydroelectric Plant, is a concrete gravity and embankment dam in Bolívar State, Ven ...
with 10,200 MW of installed capacity, which makes it the third-largest hydroelectric plant in the world. Other facilities on the Caroní are Caruachi,
Macagua I The Macagua Dam, officially known as Antonio José de Sucre, is an embankment dam with concrete gravity sections on the Caroní River in Ciudad Guayana, Bolívar State, Venezuela. It is upstream from the confluence of the Caroni and Orinoco River ...
, Macagua II and Macagua III, with a total of 15.910 MW of installed capacity in 2003. New dams, Tocoma (2 160 MW) and Tayucay (2 450 MW), are currently under construction between Guri and Caruachi. With a projected installed capacity for the whole Hydroelectric Complex (upstream Caroni River and downstream Caroni River), between 17.250 and 20.000 MW in 2010. The largest power companies are state-owned CVG Electrificación del Caroní (EDELCA), a subsidiary of the mining company Corporación Venezolana de Guayana (CVG), and Compania Anonima de Administracion y Fomento Electrico (CADAFE) accounting respectively for approximately 63% and 18% of generating capacities. Other state-owned power companies are ENELBAR and ENELVEN-ENELCO (approximately 8% of capacities). In 2007, PDVSA bought 82.14% percent of
Electricidad de Caracas Electricidad de Caracas ( BVCEDC is the integrated electricity company for Caracas, Venezuela and surrounding areas, with more than 1 million connections. It was acquired by AES Corporation in 2000 and sold to the state-owned oil company PDVSA ...
(EDC) from
AES Corporation The AES Corporation is an American utility and power generation company. It owns and operates power plants, which it uses to generate and sell electricity to end users and intermediaries like utilities and industrial facilities. AES is headquart ...
as part of a renationalization program. Subsequently, the ownership share rose to 93.62% (December 2008). EDC has 11% of Venezuelan capacity, and owns the majority of conventional thermal power plants. The rest of the power production is owned by private companies. The national transmission system (Sistema Inrterconectado Nacional- SIN) is composed by four interconnected regional transmission systems operated by EDELCA, CADAFE, EDC and ENELVEN-ENELCO. Oficina de Operacion de Sistema Interconectados (OPSIS), jointly owned by the four vertical integrated electric companies, operate the SIN under an RTPA regime.


Environmental issues

Prolonged oil production has resulted in significant oil pollution along the Caribbean coast. Hydrocarbons extraction has resulted also in the subsiding of the eastern shore of Lake Maracaibo, South America's largest lake. Venezuela is also the region's top emitter of carbon dioxide.


Regional cooperation

Venezuela has pushed the creation of regional oil initiatives for the Caribbean (Petrocaribe), the Andean region (Petroandino), and South America (Petrosur), and Latin America (Petroamerica). The initiatives include assistance for oil developments, investments in refining capacity, and preferential oil pricing. The most developed of these three is the Petrocaribe initiative, with 13 nations signed agreement in 2005. Under Petrocaribe, Venezuela would offer crude oil and petroleum products to Caribbean nations under preferential terms and prices. The payment system allows for a few nations to buy oil on market value but only a certain amount is needed up front; the remainder can be paid through a 25-year financing agreement on 1% interest. The deal allows for the Caribbean nations to purchase up to of oil per day on these terms. In addition it allows for nations to pay part of the cost with other products provided to Venezuela, such as bananas, rice, and sugar. In 2000, Venezuela and Cuba signed an agreement, which grants Venezuelan oil supplies to Cuba. In 2006, the construction of the Trans-Caribbean gas pipeline, which wpiñd connect Venezuela and Colombia with extension to
Panama Panama ( , ; es, link=no, Panamá ), officially the Republic of Panama ( es, República de Panamá), is a transcontinental country spanning the southern part of North America and the northern part of South America. It is bordered by Co ...
(and probably to
Nicaragua Nicaragua (; ), officially the Republic of Nicaragua (), is the largest country in Central America, bordered by Honduras to the north, the Caribbean to the east, Costa Rica to the south, and the Pacific Ocean to the west. Managua is the countr ...
) began. The pipeline would pump
gas Gas is one of the four fundamental states of matter (the others being solid, liquid, and plasma). A pure gas may be made up of individual atoms (e.g. a noble gas like neon), elemental molecules made from one type of atom (e.g. oxygen), or ...
from Colombia to
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
and, after 7 years, from Venezuela to Colombia. Venezuela has also proposed the project of Gran Gasoducto del Sur, which would connect Venezuela with
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
and
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
. There has been some discussion about constructing an oil pipeline to Colombia along the Pacific Ocean. Venezuela also exports electricity to neighboring countries. Santa Elena/Boa Vista Interconnector permits electricity export to Brazil, and Cuatricenternario/Cuestecitas Interconnector and EI Corozo/San Mateo Interconnector to Colombia. Venezuela may suffer a deterioration of its power in international affairs if the global transition to renewable energy is completed. It is ranked 151 out of 156 countries in the index of Geopolitical Gains and Losses after energy transition (GeGaLo). As of 2019, PetroCaribe has mostly dried up because of Venezuela's eroded domestic production and refining, but political and commercial ties in some prominent cases have endured. Critics say PetroCaribe suppressed the development of renewable energy, burdened these small nations with billions of dollars in debt – and spurred corruption. Venezuela oil industry is in turmoil. Venezuela's oil rigs, which had been producing nearly 3 million barrels of crude oil a day in 2014, produce now less than a million barrels a day. In addition to the economic collapse of Venezuela, U.S. sanctions against the country made it almost impossible to route bank payments to Venezuela. The only country receiving crude oil from Venezuela at this type of preferential treatment is Cuba. It is still getting some oil through Petrocaribe and Cuba doesn't have the debt problems because it brokered a deal to pay for its oil by sending doctors to Venezuela.


See also

*
Petroleos de Venezuela Petróleos de Venezuela, S.A. (PDVSA, ) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and production ...
S.A. (
PDVSA Petróleos de Venezuela, S.A. (PDVSA, ) (English: Petroleum of Venezuela) is the Venezuelan state-owned oil and natural gas company. It has activities in exploration, production, refining and exporting oil as well as exploration and production ...
) * Renewable energy * Trans-Caribbean pipeline


References


External links

{{DEFAULTSORT:Energy Policy Of Venezuela
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...