Venezuela decree authorizes PDVSA, ENI refinery JV

Caracas, Agency
A joint venture between Venezuelan state oil company Petroleos de Venezuela SA and Italy's ENI for a 240,000-barrel-per-day refinery has been authorized by government decree.

The new refinery will be located at the Jose Antonio Anzoategui Petroleum and Petrochemical Industrial Complex in northeastern Venezuela and will process crude extracted from the Junin 5 block in the massive Orinoco Belt.

The new facility will convert 240,000 bpd of heavy crude into light crude and 110,000 barrels of other crude into diesel for export to Europe.

The initiative is the fruit of an agreement signed Dec. 28, 2009, between PDVSA and ENI to jointly develop a 424-sq.-kilometer (165-sq.-mile) area of Junin 5.

That deal contemplated construction of a refinery to process the crude from that block, which is 60 percent owned by PDVSA and 40 percent owned by ENI.

The Orinoco Belt is a more than 50,000-sq.-kilometer (21,235 sq.-mile) area of northeastern Venezuela that contains some 280 billion barrels of heavy and extra-heavy crude, according to PDVSA estimates.

The U.S. Geological Survey, however, said in January that the Orinoco Belt holds an estimated 513 billion barrels of technically recoverable heavy oil.

The USGS, which said the Orinoco belt was the largest oil accumulation it had ever assessed, noted that the crude in that region is very thick and does not flow easily but added that through the use of specialized production and refining processes a wide range of petroleum products can be generated.