Orinoco Oil Belt project is full holes and little oil

Plaged with irregualrities, corruption, false data, environmental pollution, among a lot of other problems, the Hugo Chávez Frías Orinoco Oil Belt has yet to live up to expectations.

Until a few years ago, Venezuela’s late President Hugo Chávez boasted around the world the huge reserves of the Orinoco belt, which according to a certification carried out during his presidential term were estimated at more than 300,000 million barrels.

On February 18 it will be two years since Nicolás Maduro decided at the stroke of a pen to change the name of the Orinoco Oil Belt for "Hugo Chávez Frias," in order to "honor" his alleged work in the rescue of the area.

This week, a comprehensive report submitted by a commission of the Socialist Inspectors of the Presidency of the Republic, after conducting a comprehensive inspection of the Hugo Chávez Frías Orinoco Oil Belt, in the framework of a government program dubbed "Efficiency or Nothing," showed the extent of the disaster made by PDVSA, the state-owned oil company, in the area.

Gustavo Coronel, a local blogger, said on Tuesday that the main findings contained in the report include:

The data fed to the simulations for calculating the proven reserves in the oil belt are wrong, since well production in PetroMacareo and PetroUrica only accounts for one-fourth or one-fifth used to calculate the reserves.

Foreign investment in joint ventures should have materialized in 2014 and still has not, a reason for which PDVSA does not have the resources to build the required infrastructure. This proves that the announcements of PDVSA’s board of directors have been deceptive and fraudulent.

PDVSA and the different ministries carry out works across the oil belt in a completely disorganized way, without anyone there knowing what others are doing. This has led PDVSA to enter into dozens of contracts on its own, generating large and unnecessary costs.

All major projects including refineries, upgraders, pipelines, power plants, and shipping terminals, are paralyzed due to the lack of money. There is not even any money to hire detail engineering.

Most secondary works in progress (primary ones are not being carried out) are experiencing significant price variations, due to the lack of precise technical specifications.

The procurement of materials by Bariven (a PDVSA offshoot) is too slow, due to red tape, cancellation of contracts, abuses on the part of contractors and (perhaps) possible corruption.

There is a considerable decline in upgrading capacity at the José Antonio Anzoátegui Petrochemical Complex (aka Jose complex) in Anzoátegui state, with production costs well above the selling price, which is causing great losses to the Nation.

There is general deterioration in upgraders due to poor maintenance.

There is severe environmental pollution due to the "collapse of facilities for the treatment of fluids," the poor state of upgraders and deficiencies in the disposal of residual waters.

There is total ineffectiveness on the part of a PDVSA subsidiary called "Engineering and Construction," which means that detail engineering and procurement services are being outsourced.

There is a delay in maintenance contracts between Cuba and Venezuela, in contracts of larger storage tanks in tanks of a PDVSA arm known as PDVSA Oriente, contracts that have a value not clearly defined in inspections carried out because they have delays of more than 1,000 days.

And a situation of the utmost gravity: a PDVSA stamp was found in the hands of the captain of the Río Caroní crude oil tanker, giving this person the power to certify all the shipments loaded on the vessel. This "detail" reveals a total state of decay within the organization.

These are only a few irregularities that make the Orinoco Oil Belt live up to the name of the main protagonist of the communist revolution that has led Venezuela to the abyss.

Ven Economy |

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