There is a region in Latin America that has more oil than all Saudi Arabia. And yet it produces 12 times less

To the east of Venezuela, the Orinoco oil strip wants to return to its golden age, but faces political, economic and technical challenges. Venezuela has the largest proven oil reserve in the world: 300,878 million barrels. To put it in perspective, Saudi Arabia has in its territory a reserve of 267,000 million barrels.

A Treasury. The Venezuelan crude is concentrated in the Orinoco oil strip, a region of 55,314 square kilometers east of the country that extends over the Orinoco River basin. The Orinoco oil girdle It is rich in heavy and extrapeted oil, a type of dense and viscous crude that requires more expensive and challenging refining processes to transform into usable products, such as gasoline and diesel.

The twenty -first country in oil production. The Orinoco oil strip has been known since January 1936, when the American company Standard Oil of New Jersey did the first well: “La Canoa-1”, in the state of Anzoátegui.

But gigantic. Despite its age, the Orinoco oil strip remains the largest crude oil reserve. And yet, he has been unable to lift his head for years due to the political and technical and economic sanctions that surround it.

In its oil peak, Venezuela produced three million barrels per day. Today is the Twenty -first country in the world In oil production with 770,000 barrels a day, from behind even neighboring Colombia. The United States, Saudi Russia and Arabia lead the ranking with 8-12 million barrels per day.

A challenge and an opportunity. The sanctions on Venezuelan oil, led by the United States government, rose for six months in October 2023, which allowed a shy return of foreign companies to the Orinoco oil strip.

The moratorium evidenced that the Venezuelan oil sector has problems beyond the political; structural problems. After years of negligence, corruption and economic crisis, Venezuelan oil needs foreign investment to modernize the expensive infrastructure with which it extracts and processes heavy crude.

Although the sanctions were activated last year as a pressure measure of the Biden administration against the government of Nicolás Maduro, now foreign companies have the opportunity to obtain individual licenses to mitigate their effect, which shows some sprout of hope for a country in which oil remains an economic engine.

The Petroleum Momentum of Latin America. The modernization of infrastructure, the attraction of foreign investment and the stabilization of the economy are crucial steps, but we do not know if enough to recover all the economic potential of the Orinoco oil strip.

The context seems flattering. Latin American countries are involved in A “gold fever” of oil in which the most extreme case is that of the also Guyana neighbor, which has seen a growth of 33% of GDP thanks to the reserves discovered in its coasts in 2015. Meanwhile, Brazil has climbed to the 8th place in the world production of oil and Mexico is in the 11th place.

What if falling? The question that floats in the air is the same for all these countries, what will happen to their investments when the expected drop in oil demand By effect of energy transition? For now, much of the world moves as if we were going to continue burning oil for many years. Maybe that is the answer.

Images | EFOFAC, Wilfredor

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*An earlier version of this article was published in July 2024