Oil moves the economy and people move the oil. Venezuela pushes both resources.

Venezuela's ill-fated strike to get rid to President Hugo Chavez left the nation in a black hole for people and production. It's still trying to work its way out of that hole.

Before the strike, Venezuela boasted a production capacity of 3.7 b/d of oil and 8.8 Bcf/d of gas with another 254,000 b/d of liquefied natural gas (LNG).

At the same time, Petroleos de Venezuela (PdVSA) was a 40,000-employee giant incorporating some of the highest-technology jobs in the country.

When the strike hit, oil production dropped as low as 25,000 b/d at one point, and the Chavez government stopped paying 18,900 people who struck to remove the president of Venezuela from office, said Luis Vierma, vice minister of hydrocarbons in Venezuela's Ministry of Energy & Mines and a director of PdVSA.
PdVSA hired people from surrounding communities, retired employees, school students and armed forces.

It also hired 5,000 new employees on a probationary basis. It will keep the people that can handle the jobs.

The same kind of crash course has been applied to the country's oilpatch. Some western fields were sabotaged during the strike, and some of the mature western fields were damaged when they were shut in.

PdVSA was able to go into the younger eastern fields to raise capacity back to a current level of 3.1 million b/d of oil, and it is determined to hold that level.

Two big discoveries in northern Monagas Province, the Tacata-2X and the Chaguaramal-6X will help keep production high. The Tacata-2X tested at 10,000 b/d of oil.

That' s just the beginning of the ramp up in activity to maintain production. The nation plans to drill 50% more wells in 2004 than it drilled in 2003 with a higher concentration of that work in the younger east than the mature west.

That rate of drilling will maintain or increase production, Vierma said.

Going forward through 2009, PdVSA will explore for light and medium oils in more remote areas with proven reserves, and will step up its offshore drilling activity with the help of third parties.

That aggressive program represents opportunity for the outside investors that will help the country develop its hydrocarbons.

It still expects to raise 2009 oil production

to somewhere in the range of 4.6 million b/d to 4.7 million b/d. Its base-case production is 5 million b/d.
It expects to find another 296 Tcf of natural gas reserves to add to the 147 Tcf already found.

Some 40 Tcf of gas and 16 billion bbl of oil could come from the West Falcon-Gulf of Venezuela area off the northern coast.

In March and April this year, it expects to issue seven natural gas licenses containing an estimated 23 Tcf of gas.

Obviously, this development plan will cost a lost of money. Just the development of the offshore coastal platform, from the Gulf of Venezuela off the western side of the country, through East Falcon, Barcelona Bay, the Paria Platform, the Deltana Platform and the Atlantic Platform near the eastern border will cost an estimated $50 billion. The prize is 95 Tcf of gas and 18 billion bbl of oil.

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