PDVSA
Conference on Non-Conventional Oil
Calgary, November 25th, 2002
PDVSA The Oil Business Environment:
Oil will remain as leading world energy provider
Cooperation among key players Health of world economy and
energy demand growth
OPEC Producers Non OPEC Producers
• Coordination of • New suppliers / opening in Projected Incremental
consumers and the upstream: Oil Demand
producers market • Caspian Sea
approach • Africa
• Brazil 110
• Russia
• China 100
Concerns with Environment Protection 90
• Lower emissions 80
• Ultra-clean fuels 70
Kyoto • Additional investments
EPA 60
50
Energy Security of Supply
40
• Reliable supply 30
– New technologies 2001 2010 2020
– Finance and risks
• Reasonable prices 2001 OPEC Non-OPEC
– “Paper barrels”
Natural gas share of energy
– Producer/consumer interests
mix increases to 29% 2
PDVSA The Americas: The Largest Hydrocarbons
Reserves outside the Middle East
Proven reserves at the end of 2001
Oil (billion barrels) / Gas (trillion cubic meters)
FSU
Europe 65.4/56.14
North America M.E.
18.7/4.86
63.9/7.55 685.6/55.91
Asia Pacific
Africa 43.8/12.27
South and C. 76.7/11.18
America
96.0/7.16
25 Bn boe
78 Bn bbl
Orinoco
Oil Belt
272 Bn bbl
Source: BP Statistical Review 3
PDVSA
PDVSA, a Global Energy Corporation
RESERVES OIL PRODUCTION OIL EXPORTS
OIL 78 BILLION BBLS CAPACITY 2,800 KBD
GAS 148 TCF
4.000 KBD
REFINING CAPACITY
3,300 KBD
SALES
US$ 46.2 BILLIONS
NET PROFITS
US$ 4.3 BILLIONS
PETROCHEMICAL ORIMULSION COAL
16.5 MILLION TONS/YEAR 6.3 MILLION TONS/YEAR 7.7 MILLION TONS/YEAR
* All figures at or for the year ended Dec. 31, 2001
PDVSA
Venezuela Production Capacity
5000
4000
OIL (KB/D)
3000
2000
LAB TEST
STEAM SOACK OPEC
INSITU COMBUSTION QUOTA
1000 STEAM INJECTION STEAM INJECTION
STEAM SOACK NACIONALIZATION
0
1940 1950 1960 1970 1980 1990 2000
HEAVY OIL LIGHT/MEDIUM OIL
5
PDVSA
Oil Belt Strategic Associations
One of the largest global oil projects...
N
Caribbean Sea
PTO. LA CRUZ
JOSE
C. NEGRO
MACHETE ZUATA HAMACA
SINCOR PETROZUATA HAMACA CERRO NEGRO
TotalFinaElf 47% Conoco 51.1% ChevronTexaco 30% ExxonMobil 41 2/3%
Statoil 15 % Phillips 40% Veba 16 2/3%
PDVSA 49.9%
PDVSA 38% PDVSA 41 2/3%
PDVSA 30%
6
PDVSA
Upgraded Crude Business Model
High quality upgraded crude
• Sincor / Hamaca
Maximum upgrading in
Venezuela
Upgraded crude > 26 oAPI
o
Minimal Residual
Pipeline
Field - Jose Terminal
Mid / low quality upgraded
crude
Field Development
• Petrozuata / Cerro Negro
Partial upgrading
Upgraded crude: 14-22 o API
o
Associated to foreign refinery
E&P Transportation Upgrading Commercialization Refining
7
PDVSA
Oil Belt Strategic Associations
• Proven reserves: 11 Bn B
• 4 JVs:
– 3 JVs construction 100% completed
– 1 JV construction 54% completed
• Total investment: $13.270 Mn
• Contract duration: 35 years
• Purpose: Upgrading of non-conventional oil (8 - 9° API) to higher-
quality crudes
• Production (KBD)
2001 Today 2006
240 450 600
• PDVSA’s Business Plan 2003-2008
– Includes an additional project
8
PDVSA
SINCOR TERMINAL PETROZUATA OPERATIONS
CERRO NEGRO OPERATIONS HAMACA CONSTRUCTION
9
PDVSA
Business Opportunities
• Volume growth
– Upgrader debottlenecking: 70 KBD
– Expansion current JVs: 200 - 500 KBD
– New business
• refined products / chemicals / petrochemicals
• grassroots using AQUA / HDH PLUS technologies
• Value-added
– Quality improvement (green products)
– Intermediate refinery streams / coke / sulfur
Expansions and new developments geared
to high-quality products
10
PDVSA
Atlantic Basin: Refining Performance
Limited Growth of the Refining Capacity in the Atlantic Basin
will cause a bottleneck
Mn BD % 102
50 Refining Capacity
100
48
Product Demand 98
45 96
94
43 % Utilization
92
40 90
19
19
20
20
20
20
20
20
20
20
98
99
00
01
02
03
04
05
06
07
In order to keep up with demand, utilization rates will have to go above 95%
making the area susceptible to supply disruptions and price volatility
11
PDVSA
Venezuelan Summary
• The Orinoco Oil Belt represents one of the
majors non conventional oil reservoirs,
• Technologies have made competitive the
extra heavy oil,
• Oil Belt projects are competing successfully
with conventional oil projects,
• Future technologies will convert the Oil Belt
in the”biggest L/M crude oil reservoir”,
• Environment will be a critical factor for future
developments.
12
PDVSA
General Remarks
• Global energy demand growth will be met by
hydrocarbons resources
• Upgraded non-conventional oil contributes
to the diversification of the energy sources
• Technology is a KSF in making more
competitive the extra heavy oil
• Sustainable development is the major
challenge for the oil business
13
PDVSA
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PDVSA
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PDVSA
Conference on Non-Conventional Oil
Calgary, November 25th, 2002
PDVSA
Agenda
• The Oil Business Environment
• Venezuela: Challenges and Opportunities..
• Concluding Remarks
17