Venezuela recasts itself as a new frontier in the Americas
Venezuela recasts itself as a new frontier in the Americas In January of this year, Venezuela captured the attention of the international energy community by welcoming back the foreign oil companies that, 20 years earlier, it had shut out of the country by nationalizing the hydrocarbon sector. The tool used to attract that attention, a new exploration bidding round, is the most publicized event staged to date in the country`s aperture process. However, it is only the latest in a series of steps taken by officials to bring international oil and gas companies back to Caracas. Venezuela`s physical attraction is easily understood. The country possesses roughly one-half of Latin America`s (including Mexico) 125 billion bbl of established, conventional crude oil reserves, plus an estimated 300 billion bbl of additional, nonconventional reserves in the ultra-heavy crude belt of the Orinoco basin. Averaging 2.8 million bpd in 1996, Venezuelan crude production represents over 35% of regional oil output. Natural gas reserves total 138 Tcf, or just over one-half of the region`s total reserves of 274 Tcfg. Annual gas output averages just under 5 Tcf, of which roughly 30% is reinjected as part of tertiary oil recovery schemes. This paper reviews the incentives, deregulation, and government policies to restore the oil and gas more »
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