How important is Venezuela in

the Geopolitics of Energy

Venezuela: Energy overview
Venezuela has the largest conventional oil reserves and
the second-largest natural gas reserves in the Western
Hemisphere. It also has vast deposits of extra-heavy
crude oil and bitumen.

Venezuela consistently ranks in the top four sources of
oil imports to the United States, meeting around 15% of
US requirements. As the world's fifth largest net
exporter, oil accounts for about half of total
government revenues.

Venezuela has been producing oil for nearly a century
and was an OPEC (Organization of the Petroleum
Exporting Countries) founder-member.
OPEC
The Organization of the Petroleum Exporting Countries is
a cartel (formal group) of twelve countries.
Countries part of OPEC are Algeria, Angola, Ecuador,
Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the
United Arab Emirates, and Venezuela.
One of the principal goals is to determine the best means
for safeguarding the cartel's interests, individually and
collectively.
It also pursues ways and means of ensuring:
the stabilization of prices in international oil markets
with a view to eliminating harmful and unnecessary
fluctuations
Looking at all times after the interests of the
producing nations and to the necessity of securing a
steady income to the producing countries
providing an efficient and regular supply of petroleum
to consuming nations, and a fair return on their capital
to those investing in the petroleum industry.
Venezuelas energy
consumption
In 2006, Venezuela consumed 3.2
quadrillion Btus of total energy. (1 btus =
1 055.05585 joules) Natural gas and oil
represent the bulk of total energy
consumption in Venezuela. After
reaching 46 percent of total energy
consumption in 1998, the share of
natural gas in Venezuelas oil mix has
fallen to 34 percent. During the same
period, the share of oil consumption has
risen from 32 percent to 40 percent.
Hydroelectricity represents the
remainder of the countrys energy mix,
and Venezuela is well-endowed with
hydroelectric potential

Oil
According to Oil and Gas J ournal, Venezuela had 99.0 billion
barrels of proven oil reserves in 2009, the largest amount in South
America. Venezuela is a significant supplier of crude oil to the
world market: in 2007, the country had net oil exports of 1.9
million barrels per day (bbl/d), seventh-largest in the world and
the largest in the Western Hemisphere. In recent years, crude oil
production in the country has fallen, mostly due to natural
declines at existing oil fields.
Natural Gas
Although Venezuela has the ninth largest gas reserves
in the world, inadequate transportation and distribution
infrastructure has prevented it from making the most
of its resources.
In 2003, Venezuela signed an agreement with
neighbouring Colombia to construct a 130-mile
pipeline, which will carry Colombian gas from Punta
Ballenas to the Maracaibo oil fields in Venezuela.
Electricity
Hydropower provides the bulk
of Venezuela's electricity
supply - accounting for 66% in
2003, according to the
International Energy Agency.
Production is centred on the
Caroni River in Guayana
State, site of the Guri dam.
Guri is the second-largest
hydroelectric plant in the
world after Itaipu in
neighbouring Brazil.
Exports of Energy
In 2007, Venezuela consumed about 740,000 bbl/d of oil and had net
oil exports of around 1.9 million bbl/d. The United States is the
largest destination of Venezuelas petroleum exports. In 2007, the
United States imported 1.36 million bbl/d of crude oil and petroleum
products from Venezuela, down from 1.42 million bbl/d in 2006. In
recent years, Venezuelan oil exports to the United States have been
in decline, after peaking at 1.77 million bbl/d in 1997.
In addition, Venezuelas share of U.S. oil imports has fallen from 50
percent in 1960 to 10 percent in 2007. Much of the recent decline
has been led by falling exports of refined petroleum products,
which have declined from 379,000 bbl/d in 1997 to 212,000 bbl/d in
2007. The U.S. Gulf Coast is the largest recipient of Venezuelan
crude oil imports, with refineries there specifically configured to
handle Venezuelan heavy crude varieties.
Exports of Energy
Besides the United States, other important destinations of
Venezuelan petroleum exports include South America, Europe, and
the Caribbean, though much of the crude oil that is exported to the
Caribbean is later re-exported as petroleum products to the United
States or other locations. One of the fastest growing destinations of
Venezuelan crude oil exports has been China.

In 2007, China imported about 80,000 bbl/d of oil from Venezuela,
roughly the same as 2006 but up from 39,000 bbl/d in 2005. In recent
years, Venezuela has prioritized the diversification of its petroleum
export destinations away from the United States, but the U.S. market
will likely remain Venezuelas most important customer for the
foreseeable future.

Therefore it is an extremely important country in terms of it's
importance in geopolitical energy.