Chavez launches second phase of key Venezuelan oil project

President Hugo Chavez launched the second phase of an oil exploration project the government believes will prove Venezuela has the world's largest oil reserves. Phase two of the Orinoco Magna Reserve Project was to begin with the drilling of two oil wells in Campo Carabobo 1, in the state of Anzoategui, to determine the extent of crude reserves along the Orinoco river region.
Chavez, up for re-election to a second six-year presidential term on December 3, inaugurated work at the site.

Oil explorers previously had discounted the existence of crude in the Orinoco area.
"It turns out that they drilled and drilled and the layer is 220 feet (67 meters) thick, more than double than what had been estimated," Chavez said. According to Pedro Leon, who heads the Magna Reserva project at the state-run oil Petroleos de Venezuela, the goal is to double the certified reserves in the Orinoco area, to 11 bn barrels of crude.

Venezuela expects to confirm that it has reserves of 235 bn new barrels of crude, which would boost its reserves to 316 bn barrels -- the world's largest oil reserves, ahead of even Saudi Arabia.
Gerson Fernandez, who heads the Venezuela office of the Brazilian state-owned oil consortium Petrobras, told state television that his company is handling the technical work, while the Venezuelans are handling the operational work.
"The Orinoco river oil strip will become the world's greatest reservoir of petroleum for the next years," said Fernandez.

The Orinoco crude, however, is of the heavy and extra-heavy variety, and needs to be extracted with sophisticated techniques and powerful machinery, a task only the largest oil companies can handle. Venezuelan officials believe the crude can be extracted with current technology.
The Orinoco crude will be sent to the north-eastern Brazilian state of Pernambuco for refining, Fernandez said.
Venezuelan Energy and Oil Minister Rafael Ramirez said the project is expected to be completed by November 2008, with oil exploitation to begin the following year.