Underground wealth and crisis: Why has the situation worsened in Venezuela despite having the world's largest oil reserves?

News Topical, Digital Desk : The South American country of Venezuela has the world's largest proven oil reserves, amounting to around 303 billion barrels, according to official figures. It accounts for approximately 17 percent of the world's crude oil reserves. These oil reserves are concentrated primarily in the Orinoco Belt, where the oil is extremely dense and heavy.

How did such huge oil reserves come into existence?

Venezuela's geological structure has made this large oil reserve possible. The Orinoco Belt, which stretches across the southern and eastern parts of Venezuela, is a vast region of sedimentary rocks where ancient organic matter has transformed into hydrocarbons under pressure and time.

How did oil come out of rocks?

Over millions of years, movement between the Caribbean and South American tectonic plates caused parts of eastern Venezuela to sink, according to a case study.

When land slowly sinks into water over a long period of time, it creates a deep basin. It can be thought of as a large natural bowl.

This "bowl" allowed thick layers of sedimentary rocks to form over time. These sediments later became the rocks that contain oil.

Rivers flowing from the rising Andes Mountains carried a large amount of sand, mud, and buried organic material into the basin, creating thick, oil-rich layers that eventually became the reservoir.

The repeated rise and fall of sea levels in the region also helped preserve this buried organic matter, as shallow seas created low-oxygen conditions that prevented it from fully decomposing, so there was more material available to form oil when buried deeper.

Additionally, faults and structural traps caused by tectonic forces helped prevent the oil from escaping after it formed, effectively sealing large quantities of hydrocarbons in place.

Why did production decrease in Venezuela  ?

Even though Venezuela has the largest oil reserves in the world, this has not affected production or economic stability.

Production has fallen far below its peak levels, and aging facilities have fallen into disrepair .  Heavy oil requires complex processing to prepare it for the international market.

Wealth beneath the ground, trouble on the surface

Decades of underinvestment, poor management and international sanctions have weakened oil infrastructure. Pipelines, wells and refineries are operating below capacity.

The result is that despite such large reserves, the country's actual production potential and export earnings remain quite limited. This is further compounded by the technical and economic challenges of heavy oil.

So Venezuela's oil reserves are still the largest in terms of numbers, but there is still a long way to go to reach real economic benefits.

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