PDVSA signs $4B loan agreement with China Development Bank for expansion of heavy oil production in Orinoco
Venezuela’s PDVSA signed a $4.0-billion, 8-year loan agreement with China Development Bank (CDB) for boosting production at the Sinovensa heavy oil joint venture in the Orinoco belt from 140,000 barrels per day to 330,000 barrels per day by 2016.
PDVSA holds a majority 64.25% stake in the Sinovensa JV; CNPC owns the remaining 35.75% stake.
Venezuela will also receive two other loans from China: one for $1.5 billion dollars to promote projects for local refineries and the other one for $500 million dollars that will be used to purchase drills and Chinese oil equipment. China had originally agreed to the $6 billion in loans in late 2011.
In Beijing for the signing, Venezuela’s Energy Minister Rafael Ramirez noted that agreements with Chinese companies, including China National Petroleum Corporation (earlier post) are targeting a combined production rate of up to 1.1 million barrels per day by the end of 2014.
China and Venezuela are developing Orinoco blocks Junin 1, 4 and 8; Boyaca 4 and MP3.
Venezuela contains billions of barrels in extra-heavy crude oil and bitumen deposits, most of which are situated in the Orinoco Belt in central Venezuela, notes the US Energy Information Administration (EIA). According to an assessment by the US Geological Survey published in 2010, the Orinoco Oil Belt Assessment Unit contains one of the largest recoverable oil accumulations in the world.
The Orinoco Oil Belt Assessment Unit of the La Luna−Quercual Total Petroleum System encompasses approximately 50,000 km2 of the East Venezuela Basin Province that is underlain by more than 1 trillion barrels of heavy oil-in-place.
The US Geological Survey estimated the recoverable oil resources of the Orinoco Oil Belt Assessment Unit. This estimate relied mainly on published geologic and engineering data for reservoirs (net oil-saturated sandstone thickness and extent), petrophysical properties (porosity, water saturation, and formation volume factors), recovery factors determined by pilot projects, and estimates of volumes of oil-in-place. The US Geological Survey estimated a mean volume of 513 billion barrels of technically recoverable heavy oil in the Orinoco Oil Belt Assessment Unit of the East Venezuela Basin Province; the range is 380 to 652 billion barrels.
Schenk C.J., Cook, T.A., Charpentier, R.R., Pollastro, R.M., Klett, T.R., Tennyson, M.E., Kirschbaum, M.A., Brownfield, M.E., and Pitman, J.K. (2009) An estimate of recoverable heavy oil resources of the Orinoco Oil Belt, Venezuela: US Geological Survey Fact Sheet 2009–3028