MARIANNA PÁRRAGA
EL UNIVERSAL

Oil production costs per barrel -one of the most accurate indicators to measure how much money did Venezuelan oil state-run firm Pdvsa spend only in oil production-related activities- soared 13.6 percent in 2007, totaling USD 4.93.

This is the highest oil production cost per barrel over the last five years, and the performance matches growing oil production costs worldwide.

According to Pdvsa financial statements, the consolidated operational expenses climbed from USD 14.77 billion in 2006 to 14.95 billion in 2007. Meanwhile, exploration costs went up from USD 100 million to USD 154 million in the same period.

Excluding the operational agreements, last year Pdvsa's production costs totaled USD 4.88 per barrel -21.7 percent higher than USD 4.01 per barrel in 2006. Consequently, while production costs in the extinct operational agreements (now turned into joint ventures) are higher than those in the parent company, in 2007 Pdvsa's production costs grew more than those in the joint ventures.

The production cost per barrel is estimated by dividing the direct and indirect production costs (excluding depreciation and depletion) by the pumped total volume of crude oil, natural gas and gas liquids.

Tumbling production
As shown in the 2007 Report Pdvsa submitted to the National Assembly earlier this year, the corporation's financial statements confirmed that in 2007 the firm's daily crude oil production dropped 100,000 barrels, thus averaging 3.15 million bpd.

Gross natural gas production fell 114 million cubic feet/day (1.6 percent), and totaled 6.95 billion cubic feet/day. Out of total gas production, 2.90 billion cubic feet/day (41 percent) were reinjected to keep oil reservoirs pressurized, with a view to foster higher production. From the remaining 4.05 billion cubic feet/day, 2.20 billion cubic feet/day of methane were sold in the domestic market -which means a decline of 80.8 million cubic feet/day compared to 2006. The document explained that such a drop was due to "a reduced consumption (of natural gas) by the steel, petrochemical and oil refining industries."

The report also put the number of operational oilrigs at 111 -a number quite below the figure the authorities reported at the end of 2007. Further, the number of active oilwells was 15,817. Oil production capacity was 3.56 million bpd at the end of last year.

Growing reserves
The assessment and certification of oil reserves in Orinoco oil belt, under the so-called Magna Reserva Project, bore fruit in 2007. Proven oil reserves increased by 12.05 billion barrels, totaling 99.37 billion barrels.

"Based on the 2007 production levels, proven oil reserves have a life term of 87 years, excluding the oil reserves estimated under the Magna Reserva Project."

Proven gas reserves climbed 2.8 percent to 170.92 trillion cubic feet, including 20.48 trillion cubic feet associated to the Orinoco belt.

"Accumulated oil production since 1914 added up to some 61.54 billion barrels as of December 31, 2007," the report highlighted. Out of this figure, 41.61 billion have been pumped from the Maracaibo-Falcón basin.

Translated by Maryflor Suárez R.