$56 billion to expand the Middle East of the South

Cordoba, Argentina —Based upon Industrial Information Resources Inc. ’s conversations with Alejandro Granado, vice president of refining of Venezuela’s government-owned oil company, Petróleos de Venezuela SA (PDV) , plans to boost crude oil production to 5.8 million barrels per day by 2012, and 7.5 million barrels by 2020. Additionally, it will spend some $3 billion on expanding refining capacity. For the first six months of 2005 Venezuela’s crude production amounted to 3.3 million barrels per day. Some estimates have national crude-oil reserves exceeding 77 billion barrels.

PDV is considering spending $10.5 billion to build three new Venezuelan refineries in Cabruta, Caripito, and Barinas. If they are built, Venezuelan processing capacity will increase to 700,000 barrels per day. Moreover, investments in four of PDV’s existing Venezuelan refineries could increase heavy, and extra-heavy, crude-oil processing by 62%. These investments would be principally focused on the Paraguana refinery.

Additionally formation of strategic alliances is planned with Caribbean and South American countries to provide access to their refineries. PDV expects to invest $56 billion; the Venezuelan president, Hugo Chávez Frías, has indicated that phase one will run to 2012 and phase two to 2030—to accomplish the goals. Some 85% of the investments will be self-funded.

The Venezuelan and Cuban governments are cooperating to reactivate the 70,000-barrel-per-day Cienfuegos refinery, which will require an estimated $44 million investment.

Venezuela and Jamaica are working on a project to expand the capacity of the Kingston refinery to up to 50,000 barrels per day. An investment of $197 million is planned from 2006-2008.

Venezuela also is considering processing 50,000 barrels per day from Uruguay’s La Teja refinery. A target of 2011 would require a $600 million expenditure.

Venezuela will also construct the 200,000-barrel-per-day San Jose Abreue Lima refinery in Brazilthrough its alliance with Petrobras. Some $3 billion is expected to be invested by 2011.

There is also talk of refining Venezuelan crude in Colombia’s Cartagena refinery. Simultaneously, PDV also wants to expand its market share in Chile and Peru.

— Richard Phelps , senior editor, Control Engineering

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