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USGS claims Venezuela sits on Earth’s largest oil reserves

Raw Story, 23 January 2010

Venezuela may have just become the center of an energy-starved world.

The Orinoco Belt, situated squarely underneath the South American nation, may hold some 513 billion barrels of crude oil, according to a new report by the U.S. Geological Survey (USGS).

That's twice the size of Saudi Arabia's oil reserves, placing Venezuela firmly atop the list of oil-rich nations.

The timing of the USGS announcement is striking. On Jan. 28, international firms will take part in an auction for contracts to drill in the Orinoco Belt. The deadline for auction registration was Jan 18, according to industry publication Petroleum World. Results will be announced on Feb. 10.

However, the USGS did not make an estimate of how much oil is actually recoverable. The Orinoco Belt's reserves are typically thick and tar-like, with some patches difficult to reach with current drilling technology.

"The initial opening of the Orinoco oil belt resulted in a major production boost in the region, but ended in legal controversy, when state-owned Petroleos de Venezuela S.A. took over control of the projects in 2007 under a new hydrocarbons law," a Dow Jones release noted. "ExxonMobil and ConocoPhillips left, starting arbitration proceedings against the country. Chevron, Total and other international companies stayed."

"Knowing the potential for extractable resources from this tremendous oil accumulation, and others like it, is critical to our understanding of the global petroleum potential and informing policy and decision makers," said USGS Energy Resources Program Coordinator Brenda Pierce, in an advisory. "Accumulations like this one were previously very difficult to produce, but advances in technology and new understandings in geology allow us to assess how much is now technically recoverable."

The primary beneficiary of Venezuelan oil is the United States, which consumed 19.5 million barrels of domestic and imported crude per day in 2008, according to the USGS.

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