Gas on offshore South America

Venezuelans must learn how to be productive, instead of wasting our entire lives complaining about politics. That goes all the way back to former CEO of Pdvsa, Pedro Burelli, who no longer lives in the country. He complains that Mike Worth, CEO of Chevron Corporation, is actually doing business with Venezuela through our petroleum industry. It is unconceivable that Mr. Burelli could successfully manage an oil company, producing millions of barrels of oil per day. Now he doesn't want the next generation to also benefit from PDVSA oil industry supporting sanctions against his own country. Unfortunately, a lot of people in our general population take this message as a hint that we should not be productive. They prefer us to only complain about this government, and about the previous government, and about the future government, and about all politicians. We would waste our entire lives in that vicious circle, preventing us from becoming a productive country. We must eradicate this procrastination emphasis.

Fortunately, Pdvsa has maintained an excess of 1 million barrels per day output throughout recent months. Similarly, Guyana has been able to expand its oil output to over 600,000 barrels per day. Both countries in different scenarios are putting good use to the resources provided by nature. Will we ever connect? Will we ever build the common binational refinery recently alluded to? Will we build roads, bridges, and pipelines between Puerto Ordaz and Georgetown? That remains to be seen. It will be interesting that Venezuelans living in Guyana or Guyanese living in Venezuela could provide some feedback. Bolívar used to have a significant Guyanese population in the past. Some returned to their homeland, others still remain in Bolívar.

Venezuelans have concluded a cycle of presidential, regional, national assembly and municipal elections: which left us exhausted. While the opposition was able to maintain flagship municipalities, most of the country remained under the socialist regime: that will be the case for the next few years, until the next election cycle which will be at the end of this decade. Venezuelans must get back to work. We have a number of years of interelection recess, so that we focus on productivity. Upgrading our electrical and petroleum output remains our utmost priority, as those two industries generate enough downstream incentives to jumpstart the rest of the economy.

Offshore fields in Potiguar, Brazil suggest that more emphasis should be given to offshore gas. That is also in the case of Venezuela. We have Paria Mariscal Sucre gas fields north of the coast of Sucre state. Some of those fields border our sister Republic of Trinidad and Tobago. And to the east, north of Delta Amacuro state, we also have Platform Deltana, which borders Stabroek Field and has significant amounts of gas reserves as well. Perhaps with the help of Brazil and Suriname, which have been very helpful in containing warring allegations between Guyana and Venezuela, along with Trinidad and Tobago which is interested in developing gas both west and east of Trinidad shores.

Trinidad & Tobago and Venezuela could start developing gas reserves in Paria and Plataforma Deltana. A huge amount of gas demand is projected in both the Caribbean and in Europe. Europe is importing gas from the United States, which is expensive, rather than importing it from Russia. Perhaps if we provide supplies from South America, needs from both Europe and the Caribbean will be covered by an extra source that is not usually referred to. Venezuelan emphasis has been in extra heavy oil from the Orinoco fields, and medium to light oil from conventional fields. However, we should not forget that our gas reserves in both Sucre and Delta Amacuro states remain untapped and available for exploitation. So, it is necessary to get back to the words of former Pdvsa CEO Pedro Burelli Rivas, who would prefer Chevron not to exploit gas fields such as Lauren on Platform Deltana block 2, or conventional and heavy oil fields in the mainland, to the harm of Venezuelans seeking economic development, due to his particular political preferences.

As you read oil industry literature around the world, news is technical. Not much is wasted on politics. Petroleum is a multinational activity that covers the entire planet, producing energy for all countries and all political systems. The oil industry is not supposed to discriminate against any political system or another. Petroleum multinationals such as ExxonMobile, Shell or Chevron conduct business with various governments around the world. They must abide by different rules, regulations, and cultural practices. Venezuelans must learn that we cannot be closed minded to a particular form of government. We should not whine forever if that particular form of government is not applied. This is quite difficult to achieve in Venezuela, as proven during almost three decades. We have been obsessed with politics and we have not taught our children how to be economically productive: all our emphasis has been on politics.

I am also liable for this challenge that must be corrected. Most of the blogs I used to write until recently were political ones which actually provided no tangible results, no political change and a lot of enemies. Now that my focus has shifted to productivity in education, mining, petroleum and road construction. I realize that there are many productive ventures to undertake. Life is too short to waste it on politics. Profitable businesses such as ExxonMobil or Chevron work with the system in each of the countries they operate: that leads them to earn profits. Listening to Mike Worth, CEO of Chevron speaking is an excellent way to understand that productive mindset, as opposed to former Pdvsa CEO Pedro Burelli Rivas, who is actually accusing Chevron shareholders of not conducting business properly.

Chevron just completed a successful merger with Hess as a welcome partner in Stabroek Guyana, and Boscan Venezuela in the Orinoco Belt. Chevron is set to be crucial for an integration of oil and gas fields over the northern coast. of South America. Same could happen with ExxonMobil once we convince them to return their investment into Venezuela. We must always remember that Faja Petrolífera del Orinoco, specifically Carabobo Cerro Negro fields were developed by ExxonMobil. They should return: Venezuelan petroleum industry is huge. It needs a lot of investment and it should be time that ExxonMobil and the country's government act less viscerally on past political discrepancies.They should make arrangements for renewed production.

Information is slowly being released on the methods of Chevron operating again in Venezuela. Some of their oil production will be ceded as royalties to Pdvsa, so that Pdvsa can sell it mostly to China or Malaysia, while Chevron will be able to export the remainder of its production into Louisiana and Texas refineries in the United States. It sounds like similar arrangements will be provided to Maurel & Prom, Repsol, ENI and the Indian companies. We are going back to barter because that is the way the Office of Foreign Assets control of the United States decided for Chevron's business in Venezuela to remain lawful. Chevron is being cautious, they maintain that during August output from Venezuela will be limited. In previous occasions of sanctions lifting, production increase of Chevron was immediate: but such is not the case at this opportunity.

It sounds like the arrangements for a completely new business model are still being carefully considered. So the full effects of Chevron's return into Venezuela will be felt in the fourth quarter, rather than the third quarter which we are right now. Recent news also suggests that OPEC is preparing for a quicker increase in quotas for OPEC members, suggesting that Venezuela will actually earn a higher quota: as its production can be expected to increase during the next few months. Business will be conducted differently because the operators are different. The political conditions in each country are different. The generations are different. The leadership is different. The environmental protection security systems are also different.

Investment should be sought in the long term. It looks like most countries, due to so many shakeups in the world economy, have been taking a break. They reassess their long-term goals, thus providing the opportunity to push for greater integration of oil industries in South American countries. We look forward for hints on how to integrate South America and the Caribbean through energy, mining, education and transportation.