Venezuela claims world’s largest oil reserves: 316B barrels — including tar

President Hugo Chavez believes his oil-rich Venezuela has the largest reserves in the world — and he plans to prove it.

In recent months, Chavez has repeatedly boasted that Venezuela’s estimated 78 billion barrels in conventional reserves, coupled with an estimated 238 billion barrels of tar oil in the nation’s so-called Orinoco Belt, “are the largest petroleum reserves in the world.” By comparison, Saudi officials say Saudi Arabia has proven reserves of 261 billion barrels of crude.

According to a statement released June 26 by the state-run oil company Petroleos de Venezuela S.A., or PDVSA, Venezuela’s proven oil reserves have been underestimated because reserves from the Orinoco Belt were not included in previous studies calculating all the nation’s oil reserves.

The heavy crude from the eastern Orinoco region, which was marketed as boiler fuel called Orimulsion, was not included in conventional oil reserves calculated by past governments because Orimulsion was designed to compete with coal — not oil — and excluded from production quotas established by the Organization of Petroleum Exporting Countries.

PDVSA plans to carry out a study that would include the Orinoco reserves in Venezuela’s conventional oil reserves, according to the statement issued June 26.

The move marks a shift in policy with previous administrations in this oil-rich South American nation.

PDVSA has criticized past governments for selling Orimulsion at a fraction of the price of oil. It has started mixing the cheap boiler fuel with lighter crude to make it marketable and recognized as a part of Venezuela’s total oil reserves.

Industry analysts have said Chavez’s government wants to increase Venezuela’s proven reserves as a means of regaining negotiating power within OPEC.

Venezuela, a major supplier of oil and gasoline to the United States, is currently producing below its OPEC quota and has no capacity to boost output, diminishing the country’s influence in the cartel.

—The Associated Press