September 22, 2004
Opportunities for oil companies in Venezuela's Orinoco belt and natural gas reserves
(Financial Times) - "When Total, the French energy group, began in the 1990s to consider the tricky task of extracting extra-heavy crude oil from central Venezuela's Orinoco belt, the company's technicians would tell their bosses that all they needed to make the venture profitable was an extra $10 a barrel on the international oil price, recounts Thierry Desmarest, the company's chairman and chief executive officer.

That wish has been granted. But it is not just higher oil prices that have made possible Total's venture into what the industry calls 'unconventional' oil - difficult to extract and requiring complicated processing. Advances in technology have played a part.

'When we and ConocoPhillips [the US company that also invested around the same time] looked at Venezuela we were convinced we could bring the cost of production very low,' Mr Desmarest says of the venture, which began producing oil in August 1998. 'New technology really changed the picture.' (…)

Canada and Venezuela combined possess twice the oil reserves of Saudi Arabia.

The continued uncertainty over access to easily exploitable oil is leading other companies, including Total and Royal Dutch/Shell, to pour money into high-cost ventures such as extraction of extra-heavy crude oil, liquefied natural gas (LNG) and 'gas-to-liquids' (GTL), among other fuels (…)

Analysts at Deutsche Bank believe that, after 2008, almost half the opportunities for oil companies will be in LNG, GTL and the Venezuelan and Canadian oil sands, with deep water projects making up another quarter of the expected openings (…)".