Venezuela Beats Out Saudi Arabia as World Leader in Oil Reserves
Venezuela's Angel Falls, considered one of the seven wonders of the world, is located not far from the country's biggest oil refineries. (image: vacationideas.me)
According to OPEC’s annual statistical bulletin, Venezuela has overtaken Saudi Arabia as the country with the most proven crude oil reserves, the Miami Herald reported this week. Between 2009 and 2010, Venezuela’s known reserves climbed by 40% to level out at 296.5 billion barrels of oil. OPEC estimated Saudi Arabia’s reserves weigh in around 264.5 billion barrels.
If Venezuela has so much oil, why isn’t it higher on the list of the world’s top oil producing and exporting countries? For starters, the South American country’s economy is weak – Venezuela’s annual inflation rate of 24% is the highest in its hemisphere. While neighboring countries Brazil and Colombia both saw substantial rises in crude production, Venezuela’s production rates have steadily declined in the past five years. One likely reason is that one-third of the country’s known reserves are extra heavy crude, which is difficult and expensive to extract.
“You can be sitting on the largest reserves in the world but if you do not have the capital and technology to recover them…they are worthless,” commented Jorge Pinon, former President of Amoco Latin America.
As of 2010, OPEC estimated its member nations hold about 81% of the planet’s 1.46 trillion barrels of total known oil reserves. OPEC’s full report will be published in November.
