What's new in exploration: A fresh look at Venezuela with the benefit of hindsight

WILLIAM (BILL) HEAD, CONTRIBUTING EDITOR 

I was on my way to my new assignment in Cody, Wyo., to work reservoir geophysics magic, sneak in some exploration, perhaps of the Minnelusa formation, and meditate on elk, when the V.P. of International Exploration called me, to tell me he wanted to go to lunch. Okay, V.P.s don’t call when they fire you. Neither do they invite the working class to lunch. Maybe we will talk about deer hunting. No, I was informed that he spoke with the V.P. of U.S. Production and that my move to Cody would be delayed by a year or two. My new assignment? Explore opportunities becoming available in Venezuela. Meanwhile, the Casper and Cody offices were closed. Perhaps I was being spared. 

Taxes trump geology. I studied a PDVSA opportunity to take over a field expansion and exploration effort near the mouth of the Orinoco River. That play was for a 300-MMbbl field, my estimate and PDVSA’s. Too bad, the collective taxes of the Venezuela-fed, Estado Delta Amacuro, Tucupita city, local Workers' Confederation of Venezuela unions, and resident drug dealers exceeded 135%. Despite arguing that no respectable oil company should walk but “find” a way, we walked. A Brit independent, as rare as they are, bid into the play and won.      

No matter. A few short years later, the late president, Hugo Chavez, nationalized all U.S. oil assets. Those billion-plus capital structures are in the news today. The oil being “discussed” belongs, in part, to the contract holders as of 1990, not to the breachers who currently reside in a New York City jail.  

A close call. 1998, I was in Caracas, constructing a new office for a seismic data processing center, moving our computer kit from a high-crime compound. The relocation was to an upper floor in a new high-rise office building, immediately across the boulevard from the PDVSA office. In walked a famous colonel, who demanded prepayment of a ransom to continue business in Venezuela. He announced he would become the country's new president. His plan was to reorganize all “his” national oil companies, starting with foreign oil risk contractors. That episode was played out in front of my staff. I declined to pay, then or ever. The man in uniform issued a stern, convincing warning.  

While not an overt pragmatist, I hoovered that build-out down to the cement floor. All supercomputer parts were sent back to Houston or destroyed. I evacuated staff to the U.S. and paid for legal green cards. After all, geophysicists were in short supply. The PDVs were taken over, and many of their execs were “disappeared.”  

Perhaps, now that Chavez is dead and his mausoleum has been blown up, exploration has a future? Absolutely. The Ven-fed has not been a major player in finding new offshore oil since about 2010. Yes, they threatened Trinidad to take theirs. It appears the U.S. Navy has prevailed. What me worry? What else could go wrong? * 

“The Islamic Republic of Iran has been assisting Venezuela in exploring for uranium deposits and initial evaluations suggested resources are significant, according to a government statement made on 25, September 2009.” https://infcis.iaea.org/udepo/Resources/Countries/Venezuela,%20Bolivarian%20Republic%20of.pdf 

The future: the entire offshore area of Venezuela, from the northern coast to the Orinoco River, could benefit from new digital 3D seismic data. The 3D should include the mouths of the rivers. Competent 3D was not previously available in such high-current areas. While the rivers are the same—nasty—the capture of acoustics has evolved to near-microsecond real-time recording. I suggest the same: acquiring new 3D gravity and magnetic surveys on a grand, regional scale. 

Fig. 1. There has been a dramatic improvement in results by reimaging the same original data. Image: ExxonMobil, https://corporate.exxonmobil.com/who-we-are/technology-and-collaborations/energy-technologies/exploration-technology/discovering-hidden-hydrocarbons-using-seismic-imaging-technology-to-map-formations#FullWavefieldInversionFWI

Basic geologic knowledge of Venezuela stopped in 1951 (Mencher, E., Fichter, H. J., Renz, H. H., Wallis, W. E., Renz, H. H., Patterson, J. M., & Robie, R. H. (1953). Geology of Venezuela and Its Oil Fields. AAPG Bulletin, 37(4), 690-777). So, what can you observe and study from the recent expansion of knowledge in the Exxon plays around the area? Exxon’s use of well logs were/are complex, not cheap, nor [hint] are they mere quickie TripleC logs.  

Full-waveform inversion seismic data processing, circa 2012, pursued by ExxonMobil, was presented in 2018. The illustration (Fig. 1) demonstrates a dramatic improvement by reimaging the same original data. Good ole story. Trading up-Tech can breathe new life into existing ideas. 

If Exxon is betting almost its entire future on the offshore Paria Gulf basin and East Venezuela basin, perhaps you could examine other opportunities, +/- 100 km, that do not require the U.S. Navy to intervene. However, for now, I suggest avoiding going inland. The geology is different, nothing like Caño Limón. Also, the governments and unions demand a 200% tax. Small wonder, industries and the middle class are not common. 

Further geo references if you care: Digital geologic map and GIS database of Venezuela, Data Series 199, See also OFR 2005-1038; By: Christopher P. Garrity, Paul C. Hackley, and Franco Urbani, https://doi.org/10.3133/ds199  

Related references for future study: https://infcis.iaea.org/udepo/Resources/Countries/Venezuela,%20Bolivarian%20Republic%20of.pdf 

1. Central Intelligence Agency, The World Factbook: Venezuela, Washington, D.C., 

https://www.cia.gov/library/publications/the-world-factbook/index.html (accessed April 2010). 

2. Library Of Congress, Federal Research Division, Country Profile: Venezuela, March 

2005, http://lcweb2.loc.gov/frd/cs/profiles/Venezuela.pdf (2005). 

3. OECD Nuclear Energy Agency–International Atomic Energy Agency Joint 

Steering Group on Uranium Resources, “World Uranium: Geology and Resource Potential, 

Report on Phase 1,” International Uranium Resources Evaluation Project (IUREP), Miller Freeman Publications, San Francisco (1980) 524 pp. 

4. OECD Nuclear Energy Agency, International Atomic Energy Agency, International Uranium Resources Evaluation Project (IUREP) Orientation Phase Mission, Summary Report:Venezuela, OECD, Paris (1985). 
5. Theis, R., “Rusia colaborará con Venezuela para la explotación de uranio Caracas”, El Universel (8 May 2009), http://www.eluniversal.com/2009/05/08/pol_art_rusia-colaborara-con_1378541.html
6. Rivas, I., Davila, L., “Uranium Geology in Venezuela,” paper presented at IAEA Regional Training Course on Uranium Geology and Exploration, Poços de Caldas, 2009. 
7. Pasquali, J., Sifontes R., “Exploración de Uranio en Venezuela,” Universidad Central de Venezuela, Instituto de Ciencias de la Tierra, Caracas (2007).
8. Boston Globe, “Iran assists Venezuela with search for uranium deposits” (25 September 2009). 
9. OECD Nuclear Energy Agency, International Atomic Energy Agency, Uranium Resources, Production and Demand 1986,OECD, Paris (1986).