On a flat expanse of browning grassland, 70 miles south of here, with the black balanced hammerheads of oil wells poised to tap the rock below them, Venezuela is starting up one of the biggest projects in its history to forestall the day when its oil wells run dry.
Stretching to the south and west of the JOBO II pilot plant, in what many Venezuelans believe is a swath 400 miles long and 50 miles wide, ancient movements of the receding sea have left behind huge depostits of an oil so thick, so heavy, and so loaded with minerals -- a kind of underground black molasses -- that for decades it was ignored as being too costly to pull from the ground.
But "costly" has a whole new meaning in a world where crude oil sells for $40 a barrel. Venezula's more conventional oilfields have lost their endless promise, depleted by years of supplying both the exploding internal demand and the voracious needs of the United States, Venezuela's biggest customer. And international producers, now contemplating the eventual end of more easily extractable lighter oils, are taking a new interest in the slow-moving crudes they once dismissed.
So venezuela -- over the strenous objections of those who say the country's future is being gambled to suit foreign interests -- is plunging on an unprecedented scale into the development of the Orinoco River oil belt, apparently one of the largest heavy oil deposits in the world.
"There's a reserve out there that's equivalent to the biggest thing there is," said a Caracas-based oil man. Added an American dipolmatic observer: "I mean, we're talking about 200 to 300 billion barrels of recoverable oil. That's a tremendous thing. That's much more than in all of the Saudi peninsula."
Within the next few weeks, the wells will begin operation at Jobo, a pilot plant designed to determine how much technicians can improve the slow flow of heavy oil by heating it and pushing it with steam injected into the area of the wells. At about the same time, acording to those close to the negotiations, the state-owned petroleum company Lagoven will announce which foreign company has won the contract to coordinate the main development project. The plan calls for a massive complex, including hundreds of wells, upgrading plants, loading and storage facilities, and -- in what is now hot, empty grassland -- a city of 40,000 people.
At a projected $17.5 billion, the cost is staggering. In terms of the national budget, the U.S. equivalent would be about $1.3 trillion. Bechtel, the San Francisco-based engineering company, is considered such a strong contender for the contract that there was a recent flap in the Venezuelan press when word got around that Bechtel had been given the "wink." v
The reports were denied by all official parties -- emphatically so, and reporters inquiring recently about the heavy oil belt were told by both diplomats and company officials that the subject had become somewhat "sensitive." With its veiled accusations of rush job and sellout to the Americans, the fracas went right to the heart of the doubts some Venezuelans are voicing about this whole project.
Even as Lagoven selects its possibly North American project coordinator, the questions about the Orinoco oil are profuse. No one knows exactly how much is there -- estimates range up to 2 trillion barrels -- but it is widely acknowledged that more tests are needed before any really accurate assessment can be made. No one knows precisely what percentage of the oil is recoverable, or what the production cost per barrel will be. Industry observers are now guessing at about $13 per barrel, but the extraction and refining technology is still being tested.
And although there has been international interest in Venezuela's potential new oil riches, including one offer from the French to build a special refinery in exchange for guaranteed supply, it is still uncertain where, how, and at what cost this sludgy crude will be refined.
"I have a hunch that this [plan] means only development of the Orinoco oil belt as fast as possible, as much as possible, as soon as possible, no matter what," said Anibel Martinez, a Caracas geologist, former OPEC official, and deputy chairman of the World Petroleum Congress.
Martinez has become the country's most vocal critic of the plan, arguing that Venezuela needs far more time to study the Orinoco area and develop it slowly, with an eye toward conservation. Venezuela is hurtling into this project, Martinez believes, under pressure from countries like the United States -- countries with clear interests both in the potential millions of barrels of new oil, and in the lucrative technical contracts the plan offers private companies.
That is touchy business in Venezuela, where Exxon, Shell, and the other private foreign companies were nationalized four years ago. It is often said here that those companies spent years cheating Venezuela out of its rightful wealth, and that the country urgently needs to move past the stage where it must depend on outsiders for its technology. Energy and Mines Minister Humberto Calderon Berti has repeatedly complained that developed countries are helping preserve Third World poverty by refusing to share their resources adequately.
But Calderon Berti is one of the most ardent boosters of the Orinoco project, and voices like his have all but drowned out the protests so far.
"The belt is the greatest reality existing in the Venezuelan oil industry," he said in a 1979 newapaper interview. "This fact obliges us to exercise extreme care in the management and rational use of its resources . . . . Precisely in order to make the belt available [to future generations], we have to start now."
Venezuela has no time for the kind of prolonged study proposed by critics like Martinez, Calderon says. Internal demand is rising too fast and traditional reserves are being depleted. The first years of the giant project will include extensive study and experimentation.
And the country needs this development now, Venezuelan officials argue, if it to boost the geopolitical power it developed this century as one of the world's major oil producers.
"Venezuela -- once the world's largest oil exporter, currently the supplier of only 6 percent of OPEC oil volume . . . might have a very different long-term future because of its heavy oil deposits," wrote Alberto Quiros Corradi, president of the state-owned oil company Maraven, in a recent article for Foreign Affairs magazine. "In order to change current perceptions of Venezuela's power, it is essential that the oil belt be perceived and believed. . . . Those resources are there. They can and should be made credible, and they should allow Venezuela to use the present value of the power of such resources for its immediate development. As in economics, power has a current value based on expectations of the future."