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VenEconomy  :A gas pipedream

 

 


The Venezuelan Government, with the support of Repsol, continues feeding exaggerated expectations regarding the free natural gas field, Perla 1X, recently discovered in the eastern part of the Gulf of Venezuela off the ParaguanáPeninsula. Both President Chávez and Repsol insist on claiming that this is the “biggest gas find in Venezuela’s history,” with some 8 trillion cubic feet of supposedly certified gas.

Based on this illusory premise, the President has been indulging in fantasies about Venezuela becoming a gas power thanks to an ambitious National Gas Plan. In his Líneas de Chávez article this week, Chávez claims that “a true, real energy revolution” is under way in the country and promises that he “will not rest until the huge transformations that it promises have been brought about.”
He also assures that “PDVSA is prepared not only to provide domestic gas to 14,000 homes in Caracas in the initial stage, but also for 50% of our country’s automotive park to use gas as soon as possible.”

What excellent news it would be if those promises could be made good. But, according to Venezuela’s and Spain’s oil experts, these are merely vain illusions of magnificence, like so many that have been spun before them over the past decade.

Diego González, for example, resorts to technical arguments to bring this vain gas illusion down to earth in the October 17 edition of Barriles de Papel (N° 41). He makes the deduction that the government was overly hasty in making the announcement from Madrid in mid-September and that, besides, it exaggerated when it put the recoverable gas reserves in the Perla 1X gas field at “between 1 billion and 1.4 billion barrels of oil equivalent.” According to the findings of González’s research, the gas flow from this field would be 20.1 million cubic feed a day, which, as he understands it, is a fairly “modest figure for free natural gas wells,” and at 620 barrels of crude a day, which is no great shakes either.

González also comments that it is untrue that Perla 1X is the “biggest find in Venezuela’s history,” as Venezuela’s own Ministry of Energy and Mines has talked of “much bigger finds in the Delta Platform and in the Mariscal Sucre Project.” Even more important, González points out that it is not possible to prove, much less certify, reserves of 8 trillion cubic feet on the basis of a single well as the government is boasting.

Another oil expert, Gustavo Coronel, had already pointed out that a great deal of subsequent activity is needed in order to define the size of a field, as a single well merely proves the presence of gas in the immediate vicinity.
Other experts further endorse these arguments by recalling that Gazpron and Chevron drilled exploration wells near Repsol’s Perla 1X well, which turned out to be dry.

The fact of the matter is that Venezuela’s gas deficit has grown from 1.2 billion cfd in 2006 to 1.5 billion cfd in 2009.

There are also clear indications that Venezuela does not have enough gas to undertake the petrochemical and thermoelectricity projects that have been announced; that it cannot meet residential demand or the requirements for its Natural Gas for Vehicles Program: and that it certainly does not have gas to export to Colombia to honor contractual obligations.

Unfortunately, as happened with PDVSA, today in ruins, the government is living on illusions, a sure-fire way of crushing the Venezuelan people with disappointment.



 

VenEconomy has been a Venezuela's leading specialized publisher on financial, political and economic data since 1982. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by VeneEconomy on 10/19/2009. Petroleumworld reprint this article in the interest of our readers .

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Petroleumworld News 10/20/09

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