Venezuela: Energy overview Venezuela has the largest conventional oil reserves and the second-largest natural gas reserves in the Western Hemisphere. It also has vast deposits of extra-heavy crude oil and bitumen. Venezuela consistently ranks in the top four sources of oil imports to the United States, meeting around 15% of US requirements. As the world's fifth largest net exporter, oil accounts for about half of total government revenues. Venezuela has been producing oil for nearly a century and was an OPEC (Organization of the Petroleum Exporting Countries) founder-member.
OPEC • The Organization of the Petroleum Exporting Countries is a cartel (formal group) of twelve countries. • Countries part of OPEC are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. • One of the principal goals is to determine the best means for safeguarding the cartel's interests, individually and collectively. • It also pursues ways and means of ensuring: • the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations • Looking at all times after the interests of the producing nations and to the necessity of securing a steady income to the producing countries • providing an efficient and regular supply of petroleum to consuming nations, and a fair return on their capital to those investing in the petroleum industry.
Venezuela’s energy consumption In 2006, Venezuela consumed 3.2 quadrillion Btus of total energy. (1 btus = 1 055.05585 joules)Natural gas and oil represent the bulk of total energy consumption in Venezuela. After reaching 46 percent of total energy consumption in 1998, the share of natural gas in Venezuela’s oil mix has fallen to 34 percent. During the same period, the share of oil consumption has risen from 32 percent to 40 percent. Hydroelectricity represents the remainder of the country’s energy mix, and Venezuela is well-endowed with hydroelectric potential
Oil According to Oil and Gas Journal, Venezuela had 99.0 billion barrels of proven oil reserves in 2009, the largest amount in South America. Venezuela is a significant supplier of crude oil to the world market: in 2007, the country had net oil exports of 1.9 million barrels per day (bbl/d), seventh-largest in the world and the largest in the Western Hemisphere. In recent years, crude oil production in the country has fallen, mostly due to natural declines at existing oil fields.
Natural Gas Although Venezuela has the ninth largest gas reserves in the world, inadequate transportation and distribution infrastructure has prevented it from making the most of its resources. In 2003, Venezuela signed an agreement with neighbouring Colombia to construct a 130-mile pipeline, which will carry Colombian gas from Punta Ballenas to the Maracaibo oil fields in Venezuela.
Electricity Hydropower provides the bulk of Venezuela's electricity supply - accounting for 66% in 2003, according to the International Energy Agency. Production is centred on the Caroni River in Guayana State, site of the Guri dam. Guri is the second-largest hydroelectric plant in the world after Itaipu in neighbouring Brazil.
Exports of Energy In 2007, Venezuela consumed about 740,000 bbl/d of oil and had net oil exports of around 1.9 million bbl/d. The United States is the largest destination of Venezuela’s petroleum exports. In 2007, the United States imported 1.36 million bbl/d of crude oil and petroleum products from Venezuela, down from 1.42 million bbl/d in 2006. In recent years, Venezuelan oil exports to the United States have been in decline, after peaking at 1.77 million bbl/d in 1997. In addition, Venezuela’s share of U.S. oil imports has fallen from 50 percent in 1960 to 10 percent in 2007. Much of the recent decline has been led by falling exports of refined petroleum products, which have declined from 379,000 bbl/d in 1997 to 212,000 bbl/d in 2007. The U.S. Gulf Coast is the largest recipient of Venezuelan crude oil imports, with refineries there specifically configured to handle Venezuelan heavy crude varieties.
Exports of Energy Besides the United States, other important destinations of Venezuelan petroleum exports include South America, Europe, and the Caribbean, though much of the crude oil that is exported to the Caribbean is later re-exported as petroleum products to the United States or other locations. One of the fastest growing destinations of Venezuelan crude oil exports has been China. In 2007, China imported about 80,000 bbl/d of oil from Venezuela, roughly the same as 2006 but up from 39,000 bbl/d in 2005. In recent years, Venezuela has prioritized the diversification of its petroleum export destinations away from the United States, but the U.S. market will likely remain Venezuela’s most important customer for the foreseeable future. Therefore it is an extremely important country in terms of it's importance in geopolitical energy.