Venezuela says $70 barrel minimum needed for oil investment

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Venezuelan Energy Minister Rafael Ramirez said here Wednesday that a minimum price of $70 per barrel was needed to fund the investment necessary to guarantee the petroleum supply required by the market. 

Ramirez joined his counterparts from the Organization of Petroleum Exporting Countries, or OPEC, and energy experts in warning that the current price range of $40 to $50 per barrel posed risks to the world’s future energy security.

“The magnitude of the (economic) crisis has generated great concern,” especially for Third World countries, including those “that have the potential to export resources like petroleum,” Ramirez said at an international seminar sponsored by OPEC. 

The Venezuelan energy minister said crude oil “is not renewable and is running out,” while the drop in prices has already caused “delays or suspensions of projects,” especially costly ones, such as projects in offshore areas and Canada’s tar sands region in Alberta. 

Despite the current situation, “we have the responsibility to maintain our investments” and “meet world demand” for oil, Ramirez said. 

Oil prices have fallen dramatically since soaring to nearly $150 per barrel in mid-2008. 

“We believe that only a minimum price of $70 can guarantee capacity at the necessary levels,” the Venezuelan energy minister said. 

Ramirez, moreover, reiterated “the sovereign right (of producer countries) to manage and regulate access to their natural resources,” rejecting “the desire of international capital to impose liberalization” in accordance with its own laws. 

The energy minister also criticized the figures reported by the International Energy Agency, or IEA, on OPEC output because they do not include the heavy and extra-heavy crude from the Orinoco Belt in east-central Venezuela. 

Heavy and extra-heavy crude is more expensive to refine because it requires additional processing. 

The IEA’s reporting methodology is part of an old strategy designed to keep a large portion of Venezuela’s extensive oil resources outside the control of OPEC, which sets production quotas for its members, Ramirez said. 

The Venezuelan government expects “an intense expansion of production” in the Orinoco Belt, “which probably has the largest accumulation of hydrocarbons in the world,” and seeks the cooperation of 27 foreign companies to deal with “enormous environmental challenges,” the energy minister said. 

Venezuela said Tuesday that its oil reserves totaled 172.32 billion barrels. 

In 2008, according to a statement released by the Communications Ministry, the South American country added 74.14 billion barrels to its proven reserves. 

Copyright 2009 Efe. All Rights Reserved.

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