Venezuela? All These Years, Fake News? -- July 10, 2017

From Platts:

Venezuela’s claim of being home to the world’s largest oil reserves based on its massive Orinoco heavy oil belt has been the subject of industry skepticism for years.

The South American producer estimates it has over 300 billion barrels of proven oil, a figure naysayers believe is grossly overstated as much of its huge bitumen resources are tricky, and hence too costly, to produce.

Now two years after the biggest oil price collapse in a generation, Venezuela’s world-beating oil reserve claims are not only looking increasingly shaky but the country’s current economic and political quagmire means its recoverable oil reserves are now firmly in retreat, according to an independent study.

Norwegian oil consultancy Rystad Energy last week estimated that Venezuela’s total recoverable oil resources stand at 75 billion barrels, 24% below ago levels and less than a quarter of the official 302.3 billion barrels figure for proven reserves.

The shortfall is even more dramatic given Rystad’s approach to classifying recoverable oil resources.Unlike BP’s touchstone annual Statistical Review, which presents a mix of resource categories based on opaque official sources as “proven”, Rystad claims to take a more rigorous approach by applying Society of Petroleum Engineers (SPE) standards.

On this basis, Venezuela’s proved reserves actually stand at just 8 billion barrels, a fraction of the claimed total and less than neighboring Brazil. Even on a more generous proved and probable basis—equivalent to 2P reserves cited by oil companies as the most likely estimate of their recoverable oil—Venezuela holds 17 billion barrels, Rystad believes.

The Bakken: 500 billion bbls OOIP x 12% = 60 billion bbls.