Venezuela's Oilman unmasks vast oil reserves

Rafael Ramírez: Venezuela's oilman finds more reserves for the colonel Energy minister is the man who tends the ever-growing mineral wealth of Hugo Chávez's government


By Virginia Lopez, guardian.co.uk, Thursday 18 August
Rafael Ramírez should be ranked as one of the most powerful men in the world. As the Venezuelan minister for energy, he is also head of the country's state oil company – and, therefore, now controls the world's biggest proven oil reserves.

In a little-reported development, Opec recently certified that the South American nation was number one in national reserves, after a vast field of what was previously classified as tar was redefined as extra heavy crude. La Faja, as the heavy oil belt along the Orinoco river is referred to, contains nearly 220bn barrels. That takes Venezuela's reserves to 297bn – close to 20% of the world's oil – and leapfrogs it over Saudi Arabia on 265bn.

Although Ramírez has been in his job for almost a decade, he gives all the credit for the country's preeminence in oil to its controversial president, Hugo Chávez. If it hadn't been for the colonel, he says, Venezuela would have surrendered its reserves to multinationals long ago – and the price of oil would be nowhere near its current level.

"If President Chávez had not arrived to power," he says in his Caracas office, "we would be out of Opec, the price of oil would have not recovered, and Venezuelan oil would be in the hands of privates. At the international level, we strengthened Opec and called for a meeting of all its members … We established a fair price and gave unity to the market."
All of which should make Ramírez just as important a figure as the powerful Saudi oil minister, Ali al-Naimi, and make the country's state oil company, PDVSA, a force to be reckoned with. But this is Chávez's Venezuela and PDVSA is far more than an oil company. In fact, critics say that its huge diversity of operations – it's involved in health and welfare programmes, importing food, housebuilding and even making jam – means that PDVSA does not have what it takes to capitalise on the bounteous wealth beneath the Orinoco basin.

But Ramírez disagrees. "My greatest satisfaction [after 10 years as minister] is my team. We all come from the left, and I feel great pride in having recovered the industry for all of the Venezuelans," he says. "Before, PDVSA was an oil enclave. It had nothing to do with the rest of the country. I worked at one of its subsidiaries and I quit. I couldn't stand their almighty attitude and their disdain for the people. They referred to themselves as a first-world company within a third-world nation."

Ramírez, 48, was born into a communist family. His father was a well-known guerrillero and Ramírez's surname has led some to suspect that he is related to the notorious Venezuelan terrorist Carlos the Jackal (real name Ilich Ramírez), who was also an Andean communist.

He laughs off the link, joking that the name Ramírez is as common as Smith is in Britain, but the trail doesn't end there: one of his vice ministers was Lenin Ramírez, Carlos's brother.

PDVSA's radical transformation came about after Chávez cemented his control of the country following a coup attempt in 2002 and, later that year, a two-month-long strike during which Chávez's opponents cut off the oil supply in an effort to force his resignation.

"We knew something was going to happen. It was not a secret to anyone, so we prepared. If there was another coup, we knew our advantage lay with the oilfield workers, so we went from oilfield to oilfield talking to the workers. The oil sabotage didn't find us in the office, but in the field [with the people]," Ramírez says.

By February 2003, Chávez was firmly in power, and PDVSA changed forever. Close to 20,000 of the 50,000 people who worked there at the time were fired and its private, corporate approach was substituted for what came to be known as "the new PDVSA", run by political ideology more than by market rules or production standards.

Ramírez describes this ruling ideology as national, popular and revolutionary. A very tall man, Ramírez sits in front of a wall lined with paintings of Fidel Castro, Che Guevara, Chávez and Simón Bolívar, the Latin American figures that have inspired Chavismo, and redefined Venezuela's oil production.

"We are national, because our interest lies in charging what any nation that is in the least bit nationalistic would charge to favour their national interests," he says. "It is popular because we will not turn our backs on the people. And it is revolutionary because we are proposing a development model that is socialist – where we must go against the previous rentist model – where we have taken close to $300bn and invested it in the social areas of the country: literacy, education and food."

But for all the good intentions, eight years of social programmes have taken their toll on the company's core business, resulting in a decline in oil production. And with that comes criticism. Asdrúbal Oliveros, director of Ecoanalítica, a public policy consulting firm, says: "With the old PDVSA, you had an oil policy with no relation to the development policy, but now you have a company that builds houses, buys electricity plants, imports food and even makes jam. In the end, you do wonder if all this must make part of the oil industry. "It became a heavily politicised company that looks more like a ministry of social works, and both extremes are bad."

Ramírez denies that diverting attention to the misiones, as PDVSA's social programmes are called, has affected productivity. He claims it was opposition-led "oil sabotage" that led to the slump in production, and that they have since succeeded in bringing it back to close to 3m barrels a day (about4% of the global total). Measures are under way to ensure it reaches 4m barrels per day (bpd) by 2015, he says.

Depending on whom you talk to, PDVSA's exports range from 2m bpd to 3m bpd. This discrepancy in the numbers reflects one of the company's main problems: that even if its productivity has not decreased, its credibility has.

Francisco Monaldi, an oil expert at Venezuela's IESA business school, says: "Nobody believes in this government. They announce they will invest $150bn in the next six years and investors take it as a token gesture because to date none of these types of announcements have come to fruition."

For all the fear and distrust it inspires, PDVSA has succeeded in signing agreements with close to 20 multinationals to develop La Faja. Nor does Ramirez see a problem with the recent nationalisations of some multinational oil companies' assets in Venezuela. For the new PDVSA it was a matter of reestablishing the country's sovereignty, he says.

"Today, I can tell you that we have total control of our industry and total control over all the oil businesses in our country under a mixed capital scheme. All of the companies that were operating in Venezuela accepted this, except for ExxonMobil and ConocoPhillips, which left the country." Both of these companies are in a legal battle with PDVSA that could see the latter lose one of its refineries.

Ramírez prefers in any case to look at the big picture and is confident that Venezuela's total reserves will rise to 313bn barrels.

"One thing is oil on site, of which we have 1.3 trillion barrels, and another thing is to be able to extract that oil," he says. "The concept of reserve means that you have the oil and that you have the ability to extract it. With the technology we have, we can extract 20% of that oil … But the US department of geology has said that with our present technology we could actually extract close to 45%. That would be 511bn barrels – or oil for about 140 years."

Out of the Wild - Venezuela - part 3 of 3.

The final fifteen minutes taken from the Discovery Channels' 'Out of the Wild - Venezuela'. Do the group make it to safety?

Ibex Earth has led four trips to Mount Roraima and it is certainly one of the harshest areas that you can travel to anywhere in the world - this short series did capture what it was like on the summit extremely well, but if you would like to see more about the wildlife, the conservation etc then come to the Premiere of 'The Lost World Film' at the Royal Geographical Society on Tuesday 13th September 2011.

Tickets are priced at just £15.00 with all money going towards the conservation effort to protect the long-term future of Mount Roraima - tickets are available at http://www.lostworld.eventbrite.com/

Robbie Miles - Winner of The Lost World Project

In January / February 2010 Ibex Earth began a nationwide tour of UK universities to provide 10 students with the opportunity to take part in the adventure of a lifetime and work with a BBC film crew to help us make a documentary about Mount Roraima the plateau that inspired Arthur Conan Doyle's 'Lost World' novel,'

The winner of The Lost World Project was Robbie Miles and here is a short video that shows you his experience of joining our filming expedition for what proved a trip of a lifetime!

Join the 2011 Expedition

Join the Adventure of a Lifetime and help save Arthur Conan Doyle's 'lost world'

In April 2011 Ibex Earth will be travelling back to Mount Roraima, Venezuela with the star of BBC 2's 'Decade of Discovery' Stewart McPherson and we are looking for ten people to travel with us and see one of the world's most breathtaking natural wonders as part of The Lost World Project.

The project looks to safeguard the long-term future of Mount Roraima, which is the South American plateau that inspired Sir Arthur Conan Doyle to write his famous adventure novel 'The Lost World' and has most recently been the major influence behind Disney Pixar's animated blockbuster 'UP'. Sadly Mount Roraima is now under threat from unregulated/unsustainable tourism, illegal goldmining and the introduction of non-endemic species of flora and fauna. The Lost World Project looks to raise funds to address these issues via the making of a broadcast quality documentary, which will be premiered at the Royal Geographical Society on 30th June 2010 and then on national television in late 2011/early 2012.

The filming aspect of The Lost World Project was completed last Autumn when Ibex Earth sent a critically acclaimed film crew to Mount Roraima with ten university students from the UK. The footage taken in Venezuela will form part of a fifty minute documentary that will air on national television in late 2011/early 2012. This part of the project has already won a number of awards and has been endorsed by both the Royal Geographical Society and the Zoological Society of London.

We are now looking for the final ten people to form the next expedition to Mount Roraima and would like to invite you to journey with us to a land that will leave you with memories to last a life time. The Itinerary of the April expedition is available to download directly from the Ibex Earth website on the link below:

http://www.ibexearth.com/projects/lost-world.html

If you would like any further information about the project please email chris.livemore@ibexearth.com

The Lost World Project - Achievements to Date...

First and foremost we hope that you have all had a fantastic Christmas period and may we take this opportunity to wish you all the best for the New Year. We wanted to end 2010 with a quick blog about what Ibex Earth has accomplished to date with The Lost World Project, and what 2011 holds for what we believe is one of the most exciting conservation initiatives that people can get involved in.

2010 saw the first year of the Lost World Project, and Ibex Earth raising and donating US $11,000 to directly support the conservation of the Guiana Highlands and the conservation of Mount Roraima. We aimed funding through three avenues:

1. Through the Lost World Project, we were able to donate US $3,000 to support the Venezuelan National Parks institute (Inparques, La Luepa branch). This money was used to repair the park authority’s patrol vehicles, which had been lying idle due to disrepair. Through this grant, the local authorities will be better prepared to protect the fragile ecosystem of the Guiana Highlands and continue their work safeguarding the Lost Worlds.

2. The Lost World Project also offered the opportunity to build successful relationships with communities in need across the Guiana Highlands. Local communities hold the key to protecting the fragile landscape of the lost worlds, and so are an intrinsic part in securing a sustainable future for Lost Worlds. As such, Ibex Earth donated US $2,000 to support sustainable development projects in the impoverished Amerindian village of Paratepui, located close to the base of the majestic Mount Roraima where the Lost World Project took place.

3. To further our goal of raising awareness of need for the conservation of the Lost Worlds and their wildlife, Ibex Earth engaged thirty Amerindians from the Gran Sabana to be involved in the Lost World Project and participate in developing an understanding of the need for the conservation of Mount Roraima. Through engaging with Lost World Project participants, and through discussion, training and interviews, we aimed to contribute to developing local conservation awareness, and in the process, contributed US $6,000 in wages to support the developing sustainable tourism industry that holds the key to a secure future.

(Furthermore Ibex Earth also used local 'fixers' throughout the first phase of The Lost World Project, which saw an additional US $4,500 added to the local economy.)

Additionally, in order raise awareness of the need to conserve the region, the Lost World Project set out to produce a non-profit conservation documentary to highlight the importance of Mount Roraima and the need for regional protection. In August and September 2010, we sent ten students from across the UK to the Guiana Highlands along with a critically acclaimed film crew.

The group filmed the unique wildlife, landscapes and threats of the Lost World for two weeks, and the resultant footage is currently being edited into a fifty minute, broadcast quality documentary that will then be premiered at two high profile and prestigious events at two of London’s most famous venues - the Royal Geographical Society and the Zoological Society of London in June 2011. The film will then be broadcast to a global television audiences, raising awareness of this unique region to millions of viewers.

You might have already seen some of our footage during BBC 2's documentary 'Decade of Discovery', which aired on Tuesday 14th December 2010.

Happy New Year from all at Ibex Earth