With the late 20th century discovery of the bitumen deposits of the Orinoco Petroleum Belt, Venezuela is home to two major oil producing regions and more than 200 billion barrels of proven oil reserves. After decades of development, the wells of the Maracaibo region, which produce a medium grade crude, are declining in importance. The Orinoco basin has only begun to be tapped, however, and holds significant potential.
Although plentiful, Orinoco crude is extra heavy (highly viscous) and sour (laden with a variety of contaminants, including sulfur). In some cases, the oil must be superheated to be extracted from the ground. After that, it cannot be put directly into a pipeline; usually it must be “upgraded,” or stripped of contaminants, before it can be efficiently transported. Upgrading Orinoco crude is a complex industrial process similar to refining and requires Venezuela to have upgrader facilities that do a first pass in refining the crude so that it can then be sold to a conventional refinery and turned into fuel. Venezuela has four such upgraders that collectively processed 579,000 barrels of oil per day in 2012. In addition to being upgraded, the crude can also be mixed with lighter hydrocarbon liquids, like naphtha. In some cases, that naphtha can be extracted from the crude mix later and recycled for future use in diluting heavy crude for transport.
Once the oil is extracted from the Maracaibo and Orinoco regions, it is sent to one of two places: export facilities on the coast or domestic refineries to service local fuel consumption. More than 80 percent of Venezuela’s exports leave from one of two ports — Puerto Jose or Puerto La Cruz — located near each other on the coast of Anzoategui state. Puerto Jose handles two-thirds of the country’s oil exports and also hosts an upgrading facility. The export facilities in Anzoategui are perhaps the most critical strategic infrastructure affecting exports in the country.
Thus, physical threats to energy exports — whether from protests or militant attacks — likely would affect these facilities. But the one bright spot on Venezuela’s political horizon is that there really are no players in the current political crisis interested in harming energy infrastructure. In fact, a far larger threat to the oil industry is the decrepitude of Venezuela’s energy infrastructure.