Pstarr - From this report looks like a lot more is being produced:
http://blogs.platts.com/2013/11/25/pdvsa-woes/ Some big talk that going to require a huge amount of capex to mean anything.
Some parts: "Venezuela is producing more extra heavy crude in its oil fields in the Orinoco Belt region than it can process in the four “upgraders” that were built more than a decade ago. The upgraders were built by foreign oil companies and have a combined capacity of 630,000 b/d, or 51% of the actual aggregated output.“The upgraders are at their limit. We are producing a lot of diluted crude oil, or extra heavy oil that is mixed with naphtha, which is why we need to resolve the bottlenecks with the upgraders and expand their capacity with our present partners or with new ones,” said Rafael Ramirez, who is both president of state-owned PDVSA and the nation’s petroleum and mining minister. He spoke this month before international oil executives in Caracas.
Upgraders are plants that heat and dehydrate heavy oil, improve its quality, and also mix in naphtha or lighter crude to make the tar-like substance transportable and ready to process by traditional refineries. In addition to the limited upgrading capacity, Venezuela’s output is also being held back by insufficient volumes of naphtha. Refineries in Venezuela are not capable of producing it in adequate quantities, obliging PDVSA to import the product at market prices.
New upgraders and more naphtha capacity are the most urgent priorities in Ramirez’s new strategy for slowing the fall in petroleum production, which officially has been put at 3 million b/d. But Venezuela’s public pronouncements concerning output are roundly rejected by industry analysts, many of whom estimate that production is closer to the 2.3 million b/d that was Platts’ most recent estimate as of September. The decline in reserves of conventional, lighter crudes, of which Venezuela has proven reserves totaling 20 billion barrels, has obliged PDVSA to concentrate on developing the Orinoco Belt, where oil is as heavy as 8.5 API with high heavy metal and acid content.
The special handling also has boosted the cost of production in the Belt to an average $10/barrel, plus an upgrading cost of $30/b, still a very competitive cost level compared with other global producers. But the new projects, in which PDVSA has reserved for itself a majority equity interest of 60%, have moved at a snail’s pace. However, Ramirez has not changed Venezuela’s overall production target of reaching 6 million b/d by 2019, of which 4 million b/d would be coming from the Orinoco Belt. “The fastest way is that existing upgraders (Petromonagas, Petropiar, Petrocedeño y Petroanzoátegui) begin to receive petroleum from other production areas. So we need to expand the installed capacity of those upgraders to build up the production,” Ramirez explained.’To increase capacity of upgraders and production facilities in the Belt, PDVSA is forecasting investment of $23 billion over the next seven years. “All that has been done so far has been with PDVSA’s own resources, but from now on the mixed ventures have to assume a greater participation, because production is their responsibility. They will have greater autonomy with respect to PDVSA decisions and all will have to come to PDVSA with their own financing means. The idea is, just do it!” PDVSA is majority partner in 33 mixed ventures, seven of which are in the Orinoco Belt, where companies including Chevron, Repsol, ENI, Rosneft, Total, Statoil and CNPC are participating.
According to the PDVSA business plan covering 2013-2019, the eight new projects in the Orinoco Belt will require $108.3 billion in investment in production facilities, a figure that represents 80% of the company’s total investment over that period. Within the new strategy to realize these investments, Ramirez has promised investors to create more advantageous fiscal and trade conditions while reducing bureaucracy to accelerate the project permit processing. For independent economist Alexander Guerrero, the problem with PDVSA isn’t the upgraders’ capacity, but the fact that direct investment in the petroleum industry has dropped each year since 1999 by an average 7.5% when figuring that investment as a percentage of economic output. “Any recovery in production will take a while, because of the decapitalization and disinvestment in PDVSA,” Guerrero said. “In light of this, there is no economic reason to think oil output can increase immediately.”–Mery Mogollon in Caracas