CAPITAL: CARACAS
MONETARY UNIT: BOLIVAR
REFINING CAPACITY: 1,282,100 B/CD
OIL PRODUCTION: 3,035,000 B/D
OIL RESERVES: 76.8 BILLION BBL
GAS RESERVES: 146.8 TCF

President Hugo Chavez restructured Petroleos de Venezuela SA in October 2000 shortly after a labor-management agreement ended a massive, 4-day strike that almost idled the country's oil industry.

Chavez named Gen. Guaicaipuro Lameda Montero as Pdvsa's third president in less than 2 years. Succeeding Hector Ciavaldini, he took the helm with Venezuela as the third largest producer in OPEC.

Meanwhile, Alvaro Silva Calderon became minister of energy and mines at the end of 2000, succeeding Ali Rodriguez, who became OPEC secretary-general on Jan. 1, 2001.

PDVSA in April laid out a 10-year business plan that called for more than $53 billion in capital spending. Almost 60% of the spending was to come from the private sector.

Efforts to establish an integrated natural gas industry continued.

Upstream

TotalFinaElf SA and others started production at yearend 2000 from the $4 billion Sincor heavy crude project 200 km southeast of Caracas in the Zuata region of the Orinoco heavy oil belt. Production was to rapidly reach 40,000 b/d of very heavy, 8.5° gravity crude. That was to be blended with 25,000 b/d of 30° gravity crude to produce 16° crude to be sold internationally. Output could reach 80,000 b/d or more.

A plant under construction at Jose on the Caribbean coast was to start up in early 2002. It would upgrade Sincor oil to a 32° gravity, low-sulfur crude called Zuata Sweet. Output after that would be hiked gradually to 200,000 b/d of extra-heavy oil for dilution for the pipeline trip to Jose.

Texaco, being acquired by Chevron Corp., said it booked 379 million boe in 2000 from Hamaca field in Venezuela's Orinoco.

LASMO PLC, being acquired by ENI SPA's Agip Investments in late 2000, hiked production to 30,000 b/d in first half 2000 from 11,000 b/d in 1998 when it acquired giant Dacion field in the Oficina trend in eastern Venezuela. It operated the 426 sq km Dacion area in an alliance with Schlumberger Ltd.

Production target was 90,000 b/d in 2002. Drilling costs fell to $600,000/well from $1 million/well, and further declines were expected.

Downstream activity

Texaco and its partners in the Hamaca heavy oil project in Venezuela's Orinoco Belt announced plans in August 2000 to award three major engineering, procurement, and construction contracts, valued at $1.074 billion.

The contracts were for engineering design, equipment procurement, and construction of oil-upgrading facilities in Jose. The upgrading facilities would process the 8° gravity crude into high-value 26°gravity oil.

Still working to establish its own gas pipeline infrastructure, PDVSA began reviewing plans to lay export pipelines it could use to ship gas through Colombia to Mexico and as far away as Florida.

Internally, the state planned to reduce PDVSA's monopoly on gas operations in the upstream, downstream, transmission, distribution, and marketing sectors.

With much of its gas reserves associated with oil, the Energy and Mines Ministry planned in mid-2000 to hold a tender for development of 11 nonassociated gas areas. The deadline for tenders was January 2001. The fields included Yucal-Placer, Guarico-Cojedes, Barrancas, Ambrosio, and others.

PDVSA decided to incorporate Venezuela into the Atlantic and Caribbean LNG market, specifically the US East Coast, Puerto Rico, Dominican Republic, and Panama.

The PDVSA gas unit was to sign an agreement with Enron to build LNG liquefaction and shipping facilities at Jose.

Part of the plant's production was to be used to make propane and butane for export. The $600 million, 2.1 million tonne/year plant would go on stream in 2004, a year earlier than the Paria North LNG project to be supplied with gas from Gulf of Paria fields.

Elsewhere, the ACCROVEN gas project was to start up in May 2001. Williams Cos., Tulsa, bought TransCanada PipeLines Ltd.'s 49.25% interest.

ACCROVEN, at the Eastern Cryogenic Complex, called for construction and operation of two 400 MMcfd gas liquids extraction plants, a 50,000 b/d gas liquids fractionation plant, and associated refrigeration and storage for PDVSA.