A consortium led by Repsol was awarded a project to develop heavy crude oil reserves in Venezuela’s Orinoco Oil Belt, one of the world’s largest undeveloped hydrocarbon deposits.
The Carabobo area is located in the eastern part of the Orinoco Oil Belt which may hold up to 513 billion barrels of oil in place, according to the latest US Geological Survey.
In January, Venezuela auctioned seven blocks for development in Carabobo, with a total estimated Original Oil In Place (OOIP) of 128 billion barrels of oil. The blocks are grouped into three separate projects, with each project expected to reach a production plateau of 400,000 b/d during a 40 year term. The individual projects also include the construction of a heavy oil upgrader, with each project having the ability to upgrade around 200,000 b/d.
Repsol, the consortium leader and holder of an 11% participating interest, is partnered by India Oil and Natural Gas Corporation (11%), Petronas (11%), Oil India Limited (3.5%) and Indian Oil Corporation Limited (3.5%). PDVSA, according to Venezuelan legislation, owns the remaining 60% of the Mixed Company. The consortium won the rights to the blocks Carabobo 1 Norte and Carabobo 1 Centro (Project Carabobo 1).
The project will allow Repsol to boost output and resources in line with the objectives set out in its Strategic Plan. Through a negotiated supply contract, the development of heavy crude in Venezuela complements Repsol’s Spanish refinery upgrades, designed to incorporate the latest technology to extract more value from heavy crudes, establishing a competitive advantage over rivals.
During 2009, Repsol had unprecedented exploration success, reporting a record of 15 oil and gas discoveries amongst which were some of the world's largest finds. Especially significant was the Perla 1X gas discovery in the Gulf of Venezuela, with an estimated volume of between 1.1 and 1.4 billion barrels of oil equivalent.
Repsol maintains a historic presence in Venezuela, where it is one of the largest foreign operators. Repsol’s production in the country comes primarily from the Quiriquire, Mene Grande, Barua Motatan (starting in 2010) and Yucal Placer blocks.
Since 2005, Repsol has doubled its Exploration unit’s workforce and has allocated a significant share of investment to boost new growth projects. The result of an expanded workforce and the development of groundbreaking technology, Repsol has significantly increased its hydrocarbon resources which, as they are developed, will translate into reserves over the coming years.