Venezuela election result set to upset global oil politicsSubmitted by emalvini on Sat, 10/06/2012 - 15:15
Venezuela election result set to upset global oil politics
Hugo Chávez promises to increase production and reduce dependence on US market by doubling crude exports to Asia
Jonathan Watts and Virginia Lopez
The Observer, Saturday 6 October 2012 06.09 EDT
While giant rallies in Caracas may be drawing the world's attention ahead of tomorrow's Venezuelan presidential election, the global significance of the vote can be found hundreds of miles to the east in the oil-soaked Orinoco Belt.
According to studies, Venezuela has overtaken Saudi Arabia to become number one in the world for proven oil reserves, largely thanks to the heavy crude found in this vast alluvial plain.
Whether this multi-trillion dollar asset is controlled by Hugo Chávez or the opposition challenger, Henrique Capriles, will influence which countries and companies are given the priority to exploit them and how much drivers around the world pay at the pump. According to a report this year by BP, Venezuela has reserves of 296.5bn barrels, about 10% more than Saudi Arabia and 18% of the global total. At the country's current levels of production, this would last about 100 years.
If Chávez wins – as most polls suggest – he has promised to ramp up production and reduce his country's dependence on the US market by doubling crude exports to Asia. To further this goal, Venezuela plans to build a pipeline through Colombia to the Pacific which would reduce costs and transport times to China and other Asian markets.