ENVIRONMENT, ENERGY, OIL AND PETROCHEMICALS

Environment

Energy, Oil, and Petrochemicals

Environment

Environmental Policy

Venezuela’s environmental policy is derived from its Constitution, the international agreements that it has subscribed to, as well as extensive and detailed environmental legislation. Although the Bolivarian Republic of Venezuela has traditionally been an advocate of environmental causes, the enactment of the Constitution of 1999 represented an important change for the environment as it has made clear that this country should follow a path of Sustainable Development. This way, the country fulfills the first steps to sustainable development as described in the 1992 Rio Declaration on Environment and Development (Item 21), recognizing that overcoming poverty and improving society’s quality of life are not possible if the protection of the environment is not guaranteed.

In the Constitution of 1999, for the first time in the constitutional history of this country, there is a Chapter (IX) dedicated exclusively to Environmental Rights (articles 127, 128, and 129). This chapter articulates the duty of the state, with active participation from society, to guarantee that the population lives in an environment free from pollution, in which the air, water, ground, coasts, environment, ozone layer and live species are specifically protected.

In this context, the environment informs Venezuela’s development planning and management. This is evidenced by the Economic and Social Development Plan, whose objectives, strategies, policies, and projects seek to achieve social justice, economic development, and the protection of its natural environment. Within this framework, Venezuela also seeks to abide by the international agreements that it has signed, especially Item 21 and the Millenium Development Goals (MDG), as main courses of action to attain development that is environmentally sustainable.

Environmental Laws and Decrees

Venezuela’s comprehensive environmental legislation covers forest management and ecosystem conservation to the handling of toxic substances, among others. In total, there are more than 37 laws (organic or ordinary) and 32 environmental decrees that, according to our Constitution and in keeping with international agreements, secure Venezuela’s commitment to protecting the environment.

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International Agreements

Internationally, Venezuela has always been an advocate of the environment and has actively participated in relevant negotiations on topics such as water resources, climate change, biological diversity, and chemical safety. Venezuela has ratified over 50 international treaties and agreements on the environment. At the various conferences and international meetings, Venezuela has supported promoting the recognition of water as a fundamental human right, as this resource is a social good and not an economic one. Venezuela reiterated its commitment to the planet, ratifying the Kyoto Protocol in 2004. In the context of ALBA, the Bolivarian Alliance for the Peoples of Our America, Venezuela has supported initiatives of cooperation concerning the environment with Bolivia, Cuba and Nicaragua.

For more information, please refer to Environmental Legislation at Bolivarian Republic of Venezuela and Related Laws.

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Achievements in the Environmental Field

The Chávez administration works in conjunction with the people of Venezuela to guarantee appropriate living conditions for all while pursuing a model of development that is environmentally friendly. Among the achievements that the administration attained in this field are:

Environmental Education

  • Teachers’ training on a national level to include environmental issues in the curriculum.

  • Teaching, strengthening, and training in the area of agroecology, community organization, and environmental conservation.

  • Creation of the Mobile Environmental Units (UMAs) to show videos and develop learning activities on the environment.

Community Participation

  • Creation of 2,639 Conservation Committees that include students of all ages and disciplines, and involve almost 30,000 people working to promote reforestation and environmental conservation within the program Tree Socialist Mission.

  • Creation of over 3,000 Water Technical Groups that receive information and respond to water issues in the communities.

  • Setting up Energy Technical Groups that respond to power and gas supply in the communities.

Drinking Water and Sanitation

  • Recognition that water is a non-negotiable and fundamental human right.

  • Achieving the Millennium Goal in 2001 with respect to access to drinking water.

  • Reforestation of Venezuela’s basins for conservation, agroforestation, and commercial purposes, through the Tree Mission (Tree Socialist Mission).

Forestry

  • Prohibiting use of certain species from endangered natural forests.

  • A 34.5% decrease of vegetation area affected by forest fires.

  • Design and development of the National Forestry Statistical Information System.

Biological Diversity

  • Ban on trawling.

  • Addition of the Orinoco Delta to UNESCO’s World Network of Biosphere Reserves.

  • Building of site for the Reference Lab for the Detection of Genetically Modified Organisms (GMOs).

Land Management

  • Creation of the National Land Management Commission.

  • Drafting of guidelines for the National Environmental Plan that ensures that the national development plan is in keeping with the protection of the environment.

  • Implementation of relevant land boundaries and habitat use for the indigenous communities.

Environmental Quality

  • Sanitation and open landfills.

  • Assessment and registration of thousands of firms that handle hazardous substances, materials, and waste into the Registry of Activities that are Likely to Degrade the Environment (RASDA).

  • Infrastructure update of the environmental laboratories located in the states of Monagas, Anzoátegui and Miranda.

Monitoring and Control

  • Establishment of two ecological customs.

  • Advances in the control of air pollution caused by mobile sources.

  • Automatization of the Environmental Permitting Process.

Energy

  • Replacing 68 millions of standard light bulbs with energy-saving light bulbs.

  • Installation of 806 photovoltaic systems that are generating power in schools, community homes, border posts operated by the Bolivarian National Armed Forces of Venezuela, etc.

  • Installation of more than 100 potable water plants that use the photovoltaic systems, which benefits around 600 communities throughout the country.

Cooperation and International Management

  • Ratification of the Kyoto Protocol in 2004 and participation in negotiation meetings within the UN.

  • Creation of an interagency commission on climate change.

  • Deployment of two scientific expeditions to Antarctica, headed by researchers from Venezuela, to gather information that may lead to changing Venezuela’s status with regard to the Antarctic Treaty.

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Venezuela’s Environmental Profile

Biological Diversity

Orinoco RiverVenezuela is certainly fortunate in terms of its biological diversity and geography. Because it is located in the confluence of four major bioregions (Caribbean, Andean, Guyana, and Amazonia), it enjoys a large biomass diversity evidenced in several landscapes across the country. Because of its location and geography, Venezuela is one of the ten most biologically diverse nations, and it has been recognized as a “megadiverse country.”

Water Resources

Venezuela’s extensive river system includes surface water courses (lakes and rivers), as well as underground water. The ten major river systems are the Orinoco, Caroní, Caura, Apure, Meta, Ventuari, Portuguesa, Santo Domingo, Uribante, and Chama. The Maracaibo and Valencia lakes, the Guri, Guárico and Camatagua Dams, together with other dams and reservoirs are all large fresh water reservoirs. Venezuela is one of the top fifteen nations with the largest freshwater reserve in the world. Its abundant water resources endow Venezuela with a very high hydroelectric potential, mostly in the south, where the River Caroní by itself has the potential to produce 26,000 megawatts, with equivalent savings of 800,000 barrels of oil per day.

Forestry Resources

The tree line (over 5 meters high) covers approximately 54.2% of Venezuela’s area. Tree removal is regulated by the state. Tree management in public, private, or empty lots requires a permit; in the case of forestry reserves and wooded lots, a plan of managed forest (POMF) is required.  Lumber production is handled by the private sector. Domestic production reaches 1.2 million cubic meters of wood logs per year. Seventy per cent is harvested using sustainable logging methods. Only a small number of forestry species show a domestic demand.

Soil and Land Use

As a result of the wide diversity of climate, elevation, geological diversity, vegetation cover and drainage, nine of the 12 soil groups of the world, as classified by the USDA Soil Taxonomy, are represented in Venezuela.

It is estimated that only 22.6% of Venezuela’s territory is suitable for agricultural production. The area that is suitable for livestock and forestry production represents 57.8% of Venezuela’s territory and is located north of the Orinoco River.

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National Parks and Protected Areas

Venezuela has one the largest systems of protected areas in Latin America. The protected areas are called ABRAEs (in Spanish, Área Bajo Régimen Especial de Administración).

There are 381 ABRAEs in Venezuela that are grouped under several categories, such as: National Parks, Natural Monuments, Recreational Parks, Wild Fauna Refuges, Protected Wooded Areas, Water National Reserves, Wild Fauna Reserves, Rural Areas of Integrated Development, Biosphere Reserve, Protected Areas of Environmental Recovery, Deep Water Marine Coasts, Areas of Tourist Interest, Security Area and Cultural or Archaeological Heritage Sites.

These protected areas make up approximately 67% of Venezuela’s territory, with more than 34% exclusively devoted to the conservation of the biological diversity.

To learn more about Venezuela’s national parks, please visit the National Parks Institute’s website (INPARQUES).

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Institutions, Research Centers, and Other Organizations

Major Institutions and NGOs

Research and Education Centers

Selected NGOs

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Energy, Oil and Petrochemicals

Venezuela’s Oil Policy

Orinoco Oil BeltVenezuela’s oil policy is nationalistic and revolutionary; it is based on exercising its sovereign right over the country’s main natural resource, oil, as provided by Article 302 of the 1999 Constitution and relevant legislation. This article establishes that “the state reserves for itself, by virtue of the relevant law, and for reasons of national interest, the production of oil and other industries, operations, goods and services of public interest and strategic nature. The State will encourage domestic manufacture when it involves raw materials that derive from nonrenewable natural resources, with the purpose of technological innovation, job creation and economic growth, and generating wealth and well-being for its population.”

The sabotage against Petróleos de Venezuela (PDVSA), headed in December of 2002 by its technocratic management, brought in its wake a deep realization by the public of the industry’s inner workings. After the government regained control of PDVSA, the company’s policies saw a shift in direction.

Following the constitutional mandate, the government of President Hugo Chávez developed the policy of Oil Sovereignty, which has helped the state to regain control of this resource, in order to benefit the population of Venezuela. With the policy of Full Sovereignty, Venezuela fully regained fiscal control, collection of royalties, taxes, as well as the equitable administration and use of this resource.

The new Hydrocarbons Law provides that the revenues from the oil sector are to be allocated to Venezuela’s development, infrastructure and health, among others. Along these lines, PDVSA also directly supports the development of Missions Ribas, Barrio Adentro, Mercal, and other social programs of the government. Additionally, in the Special Development Fund (FONDESPA), PDVSA has two billion dollars that are administered through a trust with the Economic and Social Development Bank (BANDES) for mass transit projects and other investments that will ensure a significant step forward for Venezuela’s economy. PDVSA also makes contributions to the National Development Fund (FONDEN).

Oil Sowing (Plan Siembra Petrolera)

Plan Siembra Petrolera (Oil Sowing) seeks to strengthen Venezuela’s industry and secure its technological sovereignty, while continuing to develop the domestic economy as well as the local economies where the industry projects are located.

To that end, the PDVSA strategic plan is divided into seven areas of development that seek to increase the production capacity of crude oil, gas production, as well as to increase the refining capacity for 2008-2013. Altogether, the Plan Siembra Petrolera will continue until 2030, which coincides with the Bolivarian Bicentennial.

Joint Ventures

On March 31, 2006, Venezuela signed with 17 national and international oil companies the conversion to joint ventures of the illegal operational agreements previously signed within the framework of the oil opening of the 90s.

The oil opening essentially violated Article 1 of the Nationalization Law (Law that Restricts the Use and Trade of Hydrocarbons to the State) by privatizing the production of almost 500,000 barrels of oil.

The operational agreements, oil production contracts signed in the 90s, were never approved by the Legislative and pushed concessions under the guise of service contracts. This has had dire consequences for Venezuela’s revenues.

The joint ventures are outlined on Article 12 of the Constitution of 1999, which establishes that “hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental shelf are property of the Republic, are of public domain, and therefore inalienable and not transferable.” This means that the ownership of the oil deposits may not be transferred. The reserves are the exclusive property of the people of Venezuela.

Moreover, the joint ventures are regulated by Article 22 of the Hydrocarbons Organic Law, which states that the exploration and production of oil and gas will be undertaken directly by the Executive or by “companies where it [the Executive] retains decision-making control, by having an interest that exceeds 50% of the social capital.” Public-private partnerships may not trade oil. Although the resource extracted will be owned by these partnerships, it will be exclusively traded by the state of Venezuela through PDVSA.

Legal Framework

Venezuela’s energy sector is regulated by three main organic laws: The Hydrocarbons Organic Law of 2001, the Gaseous Hydrocarbons Organic Law of 1999, and the National Electric Service Law of 2001.

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Achievements: Venezuela as one of the World’s Leading Energy Suppliers

As a result of the President Hugo Chávez administration’s oil policy, Venezuela’s oil industry has consolidated and is a fountain that propels the country’s economic and social development. Venezuela plays currently a proactive role in the international scene, as an internationally recognized leader in the energy sector. Among its most notable achievements in this area are:

•    Production Increase

PDVSA’s crude production capacity has continued to increase, reaching 3.3 MBD in 2008 (this figure does not include liquefied natural gas). However, President Hugo Chávez has insisted that “our strategy is to defend fair prices for oil”, which means that depending on conditions, there may be production cuts if they are deemed necessary and are agreed upon within OPEC.

•    Gas Development

Venezuela has reestablished its presence in the oceans by developing Project Mariscal Sucre. In 2008, the use of Drillship Neptune Discoverer marked the beginning of drilling to develop proven reserves. The production will be used to supply the domestic market as a first priority and also support the conversion of all the thermal power stations to gas, the GNV Project, the national household gas plan, as well as Trench 2 of the Liquefied Natural Gas (LNG) Project.

•    Development of Petrochemical Sector

Due to the petrochemical industry’s boost, by means of Pequiven, Venezuela has significantly increased the production of fertilizers and urea. In 2008, it reached a record of 303 thousand tons (in 2007 44 thousand tons were produced). The production increased 689%. The production of urea alone increased 220% between 2007 and 2008 when 457 thousand tons were produced.

•    Revenue Increase

PDVSA’s contribution to the state has increased significantly. For 2008, disbursements totaled US $39.4 billion including investments, costs, and spending, without considering its impact on the sectors related to oil production. In regard to production investments, its total increased to US $14.4 billion including the oil sector (US $12,570 billion), food, naval, and household gas, while in 2007 its total was US $11,006 billion. It is estimated that in real terms this investment’s increase represents a 3.3% stimulus to the internal demand, which amounts to a stimulus of 0.3% in the non-oil GDP growth.

•    Promotion of Cooperation and Integration in the Hemisphere

The Bolivarian Republic of Venezuela has promoted a regional initiative called Petroamerica based on the principles of solidarity, reciprocity, and sovereignty, with direct negotiations between states and state-owned companies. Petroamerica is envisioned as a geopolitical enabler directed at establishing cooperation and integration, using energy resources from the regions of the Caribbean and Central and South America as a basis to improve the socioeconomic conditions of the peoples. This initiative is supported by Petrosur and Petrocaribe.

Petrosur is made up of Argentina, Brazil, Uruguay, and Venezuela. Petrocaribe is made up of Antigua and Barbuda, Bahamas, Belize, Cuba, Dominica, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, Suriname, and Venezuela. Petroandina includes Bolivia, Ecuador, Colombia, Peru, and Venezuela.

•    Oil Sowing Project: Progress Report

The Plan Siembra Petrolera (Oil Sowing) has been extended until 2012.  It involves investment for US $56 billion. It is divided in six major projects: quantification and certification of the reserves (Magna Reserve Project), Orinoco Project (development of the Belt), Delta-Caribbean Project, refining, infrastructure, and integration.

Orinoco Project: the Orinoco Oil Belt is the territory located south of Venezuela’s Eastern Basin, south of the states of Guárico, Anzoátegui, Monagas, and Delta Amacuro, and parallel to the Orinoco River. It spans a distance of 600 km from east to west and 70 km from north to south, with an approximate area of 55,314 km2. This area is divided into four fields of exploration and production: Boyacá, Junín, Ayacucho, and Carabobo. The current area of exploration is 11,593 km2. The Orinoco Project consists in drilling 27 blocks in the oil fields of Boyacá, Junín, Ayacucho, and Carabobo. Once the drilling and refining of crude oil is under way, it is expected that this project will positively impact the populations where the project is being developed, by means of employment, building of infrastructure, improvement in the quality of education, housing, health, and education in the region. President Hugo Chávez stated that “this project will bring about comprehensive development, this is the Bolivarian Orinoco Belt, the Socialist Orinoco Project. This is the future, where we will build cities of the future.”

Magna Reserve Project:  This project seeks to quantify and certify the reserves that Venezuela has in the Orinoco Oil Belt. To this end, a study is being currently implemented, integrating geology and production, in conjunction with private oil companies. Of the total Belt area (55,314 km2), only 11,593 km2 are being drilled, while the area that the project seeks to quantify is 18,220 km2, divided into 27 blocks. It is expected that 235 billion barrels of heavy crude will be certified. By certifying the Orinoco reserves, Venezuela will become the country with the largest reserve of hydrocarbons in the world, totaling 316 billion barrels of oil.

Delta-Caribe Project:  This Project aims to develop gas off-shore, which includes the eastern and western regions of Venezuela. This project seeks to consolidate our position as the eighth country of the world with major proven reserves of Natural Gas and the first of Latin America, with 180 billion cubic feet of gas (BPC) and an additional volume in the order of 100 BPC. The goal is to increase the production of gas from 6.9 billion cubic feet per day to 11.5 billion by the end of 2014.

•    Promotion of Energy Savings

Environmentally buls In addition to the infrastructure built to gradually increase the production capacity and distribution of electrical energy, the government has emphasized the development of a model of energy consumption that is environmentally responsible.

In the context of the Mission Energy Revolution, 10,902,384 energy-saving light bulbs were installed for free in 2008, which exceeded the initial target of 10 million light bulbs. This is in addition to the 68,529,974 light bulbs previously installed during phases I and II of said mission.

Mission Energy Revolution has resulted in savings of 2,000 MW per day, or 5 million kWh per year. This is the equivalent to saving 24.7 million oil barrels, which translates into US $4.60 dollars a month per household.

Please refer to the official documents issued by the Ministry of People’s Power for Energy and Oil on contributions to the nation, indicators, refining, exports, transportation, reserves, production, statistics, and other relevant information on Venezuela’s oil industry.

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Refining Portfolio

•    Refineries in Venezuela and around the World

Petróleos de Venezuela SA (PDVSA) owns three oil refineries in Venezuela. The Paraguaná Refinery Complex, located in the western state of Falcón, is considered the world’s largest refinery. It includes the Amuay, Cardón, and Bajo Grande plants. This complex has a refining capacity of 940 million barrels a day (mbpd).  Puerto La Cruz, located in eastern Venezuela, has a refining capacity of 200 mbpd.  Additionally, the El Palito refinery is located in north-central Venezuela and processes 130 mbpd.

PDVSA also owns five refineries in the U.S.: Corpus Christi (Texas); Lemont (Illinois); Saint Croix (Virgin Islands), in partnership with America Hess; Lake Charles and Chalmette (Louisiana), in partnership with Exxon. The refining capacity in the U.S. is approximately 1.09 mbpd.

In Europe PDVSA processes 259 mbpd, as a result of its partnership with AB Nynäs, and through the Nynasshamn Refineries in Sweden and Amberes in Belgium, as well as other refineries in the United Kingdom.

Moreover, PDVSA’s refineries located in the Caribbean have a processing capacity of 632 mbpd.

•    CITGO

CITGOCITGO is a subsidiary of PDVSA, registered in the U.S. It employs more than 4,000 people directly and approximately 75,000 indirectly.

CITGO operates three refineries with a total capacity of 749 mbpd: Lake Charles, Louisiana, with 425 mbpd; Corpus Christi, Texas, with 157 mbpd; and Lemont B/D, Illinois, with 167 mbpd. Additionally, it operates more than 7,000 gas stations in the U.S.

In keeping with the policies of its main shareholder, the Bolivarian Republic of Venezuela, CITGO has implemented programs of corporate social responsibility, such as the CITGO-Venezuela Heating Oil Program, as well as social programs in the Bronx, New York.

CITGO-Venezuela Heating Oil Program

Created in 2005, this program demonstrates the commitment of the Chávez administration to help the lower income population. Of all programs implemented by oil companies, this is the largest assistance program in the U.S.  On an annual basis, it reaches over one million people that cannot afford heating oil, a commodity that is essential in the winter.  More than 20% of this program targets indigenous communities.

Social Projects in the Bronx, New York

In keeping with the humanitarian and multi-polar policy of the Chávez administration, CITGO provides support to communities in the Bronx for education, social and economic development programs, as well as for the conservation of the Bronx River.

For further information on CITGO’s Social Programs, click here.

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Petrochemical Industry

Petrochemical IndustryPequiven, Petroquímica de Venezuela, S.A. is a state-owned corporation that produces and sells basic petrochemicals, mostly in the domestic market and some for export. It was established in 1977, when it took over the operations of Venezuela’s Petrochemical Institute that dated back to 1955.  Since its creation, Pequiven has been restructured a few times. As a result, its products now reach both the domestic and international markets. In 2005, Pequiven established itself as an independent corporation after separating from PDVSA and is now a public sector undertaking under the purview of the Ministry of People’s Power for Energy and Oil.

Pequiven’s operations include three petrochemical facilities: Morón, located in the western-central state of Carabobo; Ana María Campos, in the western state of Zulia; and José Antonio Anzoátegui in the eastern state of Anzoátegui.

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Electricity

Seventy per cent of Venezuela’s power comes from hydroelectric sources. The country’s hydroelectric potential is 83.43 MW. The current installed capacity is 57.850 gigawatts (GW) per hour with an average use of 46.828 GW/hour. Although hydroelectricity generation requires substantial financial investment, it is considered essential for national energy security, as it has freed up a significant amount of liquid fuel that can now be exported.

In 2009, the Ministry of People’s Power for Electric Energy was created with the goal of strengthening the domestic energy sector.

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Institutions and Other Organizations

*OPEC is an international organization with headquarters in Vienna, Austria. It was created in 1960 to allow the setting of uniform oil prices that was unilaterally agreed upon by major foreign distributors. OPEC’s goal is to unify and coordinate its 13 members’ petroleum policies. Original OPEC members include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.  Subsequently, the organization has expanded to include Algeria (2007), Angola (2007), Nigeria (1971), United Arab Emirates (1967), Libya (1962), Qatar (1961), and Ecuador (1973-1993, and again in 2007). OPEC controls about 43% of the world’s oil production, and 75% of the oil reserves. Its share of crude exports is approximately 51%.

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Source

  • Ley Orgánica del Ambiente Gaceta Oficial de la República Bolivariana de Venezuela Nº 5.833. (2006). (Accessed December 20, 2008.)
  • Ministerio del Ambiente y Recursos Naturales MARN (currently Ministry of People’s Power for Environment-Minamb) “Primera Comunicación Nacional en Cambio Climático de Venezuela. Caracas, Venezuela”. 2005. (accessed January 15, 2009.)
  • Ministerio del Poder Popular para el Ambiente (Minamb) “Memoria y Cuenta del Ministerio del Poder Popular para la Energía y Ambiente 2007 y 2008", (accessed January 7, 2009.)
  • Ministerio del Poder Popular para la Educación, Portal Educativo Nacional, Política “Líneas Generales del Plan de Desarrollo Económico y Social de la Nación 2007-20013”, Septiembre 2007 (accessed August 28, 2009.)
  • Ministerio del Poder Popular para el Ambiente, Instituto Nacional de Parques (INPARQUES), Dirección de Áreas Naturales Protegidas (ANAPRO), “Parques Nacionales y otras Áreas Protegidas, Informe nacional 2007-Venezuela” (accessed August 17, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, Pdvsa, “Petróleos de Venezuela”, (accessed February 8, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, Pdvsa, Libros, “Programas de educación y soberanía petrolera”, (accessed February 8, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, Pdvsa, Negocios y Filiales, “Empresas Mixtas”, (accessed February 8, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, Pdvsa, Biblioteca Digital, Política Petrolera del Gobierno Revolucionario “Plan Siembra petrolera", (accessed February 8, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, “Refinerías”,(accessed August 18, 2009).
  • Citgo, “Desarrollo Social”, (accessed August 18, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, Pequiven, “Complejos petroquímicos”, (accessed February 8, 2009.)
  • Ministerio del Poder Popular para la Energía y Petróleo, "Logros: Presidente Chávez presentó resultados energéticos del 2008”. 13 de enero de 2009, (accessed January 20, 2009.)

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