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| From the pages of: World Energy, v8n1 |
Venezuela: A Factor for Energy Integration in Latin America and the Caribbean by Rafael Ramírez Carreño Fighting poverty and ensuring an increasingly equitable and better quality of life are common and immediate goals of the Latin American and Caribbean nations. Aware of the factors that hinder population in this region from accessing energy resources, we strongly claim the sovereign right of our people to manage their own energy resources and dedicate them to the population while favoring Latin American and Caribbean integration. When dealing with energy integration, one cannot ignore the inequalities and asymmetries in the region. We face problems of social and economic injustice, observed not only in the condition of poverty of our citizens but also in the serious difficulties that impact health, education, finance, technology and infrastructure. In addition, strong political pressures impede and even prevent our people from accessing their energy resources. In the government of the Bolivarian Republic of Venezuela, headed by President Hugo Chávez Frías, we are convinced that this is an extraordinary historical moment for the region to move forward in the discussion of an energy integration plan, putting political issues before any technical consideration. Indeed, any discussion of possible solutions to problems preventing fair and equitable sovereign access to energy resources requires, first and foremost, political will and strategic vision. Integration: Region by Region Our very survival depends on opening up channels of integration; such an effort should be based on our complementary economies. In order to move forward in this direction, political will proves essential to providing encouragement and the power of realization. Historically, regional integration has concerned our states and our governments. Of course, this does not mean that private business sectors are excluded. Integration is to be primarily conceived as a matter of state concern so that the effort should be guided by political will, with a human, economic and social vision. Integration in our region would allow us to capitalize on the tremendous potential represented by a market made up of more than 530 million human beings; it’s no doubt a huge domestic market offering us ways to increase our strengths and reduce our weaknesses. In energy terms, more than 80 percent of the Americas’ oil and gas reserves is found in Latin America. This places our region in a privileged position as an energy supplier, if one takes into account that most energy to be consumed in the world in the next decades will come from the fossil fuels: oil, gas and coal. Only Venezuela has oil reserves for more than 285 years at the current production rate of 3.1 million barrels per day. Specifically, our oil reserves account for 77 billion barrels of conventional crude, in addition to 235 billion barrels of heavy and extra-heavy crudes in the Orinoco Oil Belt. When we add these figures to those of Mexico, Brazil, Ecuador, Colombia, Peru and Argentina, we hold, as a region, 11.5 percent of all global oil reserves. Furthermore, our state companies have accumulated the experience and developed the capacities to gain increasing international presence. The synergy of knowledge, material capacities and experience among our state companies, as well as private companies, represents potential we must be ready to use to best advantage. The Potential of Petroamérica The strengths of Petroléos de Venezuela (PDVSA), for instance, are clear. Based on preliminary financial results, the corporation’s world revenues in 2004 equaled US$63 billion, with net profits equivalent to $6 billion. Additionally, in Venezuela we are reestablishing exploration efforts in our continental shelf. The total prospective area to explore extends over approximately 165,000 square kilometers. Potential reserves estimated in this area account for more than 20 billion barrels of oil and 96 billion cubic feet of natural gas. These are mostly unexplored spaces, with depths lower than 1,000 meters. All this potential to multiply our resources for the benefit of our people attests to the well-aimed Petroamérica initiative proposed by President Chávez Frías. Petroamérica has been conceived as a strategic alliance among national energy operators to strengthen them even more, turning them into effective and efficient instruments for regional integration. The regional oil zones of Petrosur, Petrocaribe and Petroandina are included. It would clearly be selfish to ignore this idea of integration and its objective of a better quality of life for everyone since we cannot accept treating with indifference the shame of having more than 100 million Latin Americans forced to survive on less than one dollar per day. With his unshakable sense of citizenship of Latin America and the Caribbean, President Chávez Frías has proposed the Petroamérica initiative as a means to merge the talents, skills and resources of the countries in the region for most mutual benefit and the full exercise our energy sovereignty. I would like to emphasize that this initiative – which has been backed by other governments in this continent and has already started to materialize – is aimed at establishing an alliance of national companies. By respecting sovereign decisions and the legal framework of each country, this alliance would be in charge of the development of the whole productive chain of the energy business in the region. In this context, institutions such as the Latin American Organization for Energy (OLADE), for example, have the mission to gain force as a forum for discussion and decision making on political issues that impact access to energy resources, as well as to develop the legal framework and the historical and statistical foundations for Petroamérica. Some evidence of progress made in this connection in South America is Petrosur, where particularly with Argentina an energy cooperation agreement has been executed. Likewise, we welcome the effort made by the Argentinean government in reestablishing a national energy company, Empresa Nacional de Energía Sociedad Anónima (ENARSA). Yet a further tangible concrete achievement has resulted from the alliance of ENARSA with INTERVEN Venezuela, S.A., an affiliate of PDVSA. We have already registered the first service stations in the city of Buenos Aires under the brand name ENARSA/PDV. In this way, ENARSA and INTERVEN Venezuela S.A. have enthusiastically engaged in consolidating a strategic partnership at the forefront of the region. Their joint effort is aimed at the exchange of services to leverage growth, but it extends beyond business objectives to be the spearhead in synergy generation among the various economy sectors of both countries by fostering business and trade activities among the sectors, which in turn strengthens the sovereignty of these two countries. We have also signed an energy agreement with Bolivia, a country we support in their effort to regain control of their natural resources for the benefit of their own people by strengthening their national company. Reinforcing the Ties Similarly, within the framework of Petrosur, we have reinforced our ties of energy integration through the execution of 14 oil, gas and petrochemical agreements between PDVSA and Petroleo Brasileiro (Petrobras), with the objective of consolidating the economic and social aspects of both nations. These agreements primarily include those for the joint development of the Mariscal Sucre and Orinoco Oil Belt projects, business and cooperation activities for lubricant production and distribution, refining cooperation, maritime trade and transportation, and scientific cooperation and personnel training. Also, a feasibility study for the construction of an oil refinery in Brazil to process Venezuelan and Brazilian crudes has been considered. In other developments: • The Petrocaribe initiative is effectively progressing, with Venezuela developing relations with Trinidad and Tobago, Jamaica, Cuba and the Dominican Republic, among other nations. The efforts are related to fuel supply, with preferential agreements allowing for energy access and creation of alliances among our national companies to develop upstream and downstream projects. • At the same time, Venezuela has established with our sister country, the Republic of Colombia, agreements ranging from electrical integration to the construction of the first gas pipeline between both countries. • In the area of oil and gas, the San Jose and Caracas agreements are destined to supply hydrocarbons and their derivates to Central American and Caribbean countries under favorable conditions. • With Mexico we are currently discussing how to evaluate adjustments required by current energy market conditions. Gaining Sovereignty over Energy Resources We strongly believe that state companies have a key role to play in the defense of access to and conservation of energy in order to leverage sustainable development. Latin American and Caribbean countries are getting organized to structure and materialize such initiatives as Petroamérica, which should allow for the full exercise of sovereignty over our energy resources, based on a commitment to integration and exchange with solidarity, fair trade and the inalienable right of our people to development under the principles of reciprocity.
Rafael Ramírez Carreño, a mechanical engineer, has a wide experience in the development, coordination and management of engineering and construction projects for the Venezuelan oil and gas industry. Mr. Ramírez was the founding president of Enagas, the national gas entity responsible for structuring the national gas plan, and thus responsible for the design, development and promotion of the state policies for this sector. In July 2002 was appointed as minister of Energy and Mines by the Bolivarian Republic of Venezuela’s President Hugo Chávez Frías. The Ministry of Energy and Mines became Ministry of Energy and Petroleum in January 2005. On November 20, 2004, Mr. Ramírez was appointed president of Petróleos de Venezuela (PDVSA), a position he holds concurrently with that of minister of Energy and Petroleum.Mr. Ramírez graduated from Los Andes University, Venezuela, and also holds a master of science degree in energy studies. |
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