Whilst international attention has focussed recently on the ecological and climatic impact of the tar sands, another heavy oil boom is happening which is equally important.
Just three years after a spate of nationalisations in the heavy oil belt of Orinoco, Venezuela has once again signed deals with foreign companies that require investments of up to $80 billion.
It is seen as Venezuela’s biggest investment opportunity since President Chavez took power eleven years ago.
Such huge investment could double its production capacity.
But heavy oil is also more energy intensive to produce.
As the FT reports: “Interest in the Orinoco’s extra-heavy oil also points to the fact that world production will rely increasingly on reserves that are harder to develop, with Brazil’s pre-salt deposits and Canada’s tar sands also gaining in importance.”
So the massive investment boom is likely to have a climatic impact too.
This time it will be the Chinese and Russian oil companies who will make $50bn of investment in the Orinoco’s large Junin block. Other companies to invest are Italy’s Eni, Chevron and Repsol.
Despite this some of big oil’s biggest names did not bid, such as BP, Shell, Total and Statoil.
They may be missing out on billions of barrels of oil.
President Chávez claims the Orinoco Belt is the largest oilfield in the world, with at least 270bn barrels of recoverable reserves.
The US Geological Survey goes even further. In January it said that up to half a trillion barrels of oil are technically recoverable from the heavy oil deposits.
If all that is extracted then the climate will be impacted….