Venezuela holds around 90 percent of proven extra heavy oil reserves globally, mainly located in the Orinoco Belt. Certification of this resource means that, in July 2010, Venezuela overtook Saudia Arabia as the country with the largest oil reserves in the world. Petróleos de Venezuela SA (PDVSA), the state oil company, is also now the world’s fourth largest company.
PDVSA’s multibillion dollar investment plans for the Belt are likely to be hampered by the company’s high levels of debt. In view of its high development costs and the uncertain investment context (e.g. changes in taxation of “windfall profits”), the Orinoco Belt is still seen by many analysts as high risk. Nevertheless, despite these concerns, foreign companies, investors and governments still appear keen to get a piece of the huge Orinoco pie, as oil investment in the country in 2011 showed. The investors range from the Italian oil major ENI to Japanese Bank, many of them coming from the emerging BRIC countries (Brasil, India, China). The deals do not only include the extraction of the extra heavy oil but also the construction of refineries and power stations.
The massive Belt development is bound to have major environmental and social impacts on the local region, as well as its climate impacts. The Orinoco river is 2.140 km long, the surrounding area a wetland of high biodiversity and home to many endangered species.
The industrial development and the large new necessary infrastructure in refinement equipment and transport have intense impacts on the country, including air, soil and water pollution, huge volumes of solid waste, and the waste of energy and resources. The local civil society has expressed concern about the health impacts of waste products generated at the industrial complex. However, while there is a legal requirement in Venezuela for all oil projects to carry out environmental impact assessments (EIA), including baseline studies, these studies do not appear to have been published and there is no information on any more recent EIAs carried out by PDVSA in relation to operations in the Orinoco Belt. NGOs therefore demand better environmental monitoring and oversight.
Orinoco Diesel has extremely high Greenhouse Gas emissions, Venezuela being at the same time highly vulnerable to climate change (food production, human health, energy demand, biodiversity and the risk of flooding, among other issues). NGOs recommend a number of measures of adaptation and mitigation.
» See more detailled info on the Venezuela case in the following text by Dr. Sarah Wykes: The Orinoco Oil Belt - Update (PDF, 18 Sites, 7,1 KB)
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