Venezuela's Oil Reserve Claims Questioned by Experts

Venezuela claims to possess 303 billion barrels of proven oil reserves, a figure that places it ahead of Saudi Arabia and Iran in global rankings. However, independent experts assert that this estimate is significantly inflated, with more realistic figures falling between 60 and 120 billion barrels.

The discrepancy is particularly relevant as Venezuela seeks to attract investment for its struggling oil industry and in light of a recent U.S. deal involving Venezuelan reserves. The Trump administration had previously stated that the U.S. would control over 65 billion barrels of Venezuela's proven reserves, a claim that experts find improbable.

"That's a funny, funny proposal," said Evanan Romero, a former Venezuelan energy official, referring to the U.S. deal. "If the U.S. government called them and asked them to testify to how they did the procedure — well, the whole world will know that that’s a funny number, an absolute lie."

Experts point to several issues with Venezuela's reserve calculations, which largely originated in the mid-2000s under former President Hugo Chávez. The process involved state-owned companies from various countries and a U.S.-based firm, Ryder Scott. However, the government never fully disclosed the methodology, and Ryder Scott reportedly refused to endorse the final reserve figures before ceasing its involvement.

Francisco Monaldi, a Venezuelan oil expert at Rice University, estimated that only 10 billion to 15 billion barrels could be classified as proven reserves in the short term. He suggested that the official figures are "inflated by a factor of nearly three."

Luisa Palacios, a former Citgo chair and energy researcher at Columbia University, speculated that the 65 billion barrel figure cited by the U.S. administration might refer to oil underground rather than proven reserves, potentially meaning proven reserves could be as low as 3.2 billion barrels if a 5% recovery rate is assumed.

The oil in question is largely located in the Orinoco Belt, an area presenting significant technical challenges due to the heavy nature of the crude. Experts estimate the recovery rate for Venezuelan oil to be around 10%, with lower rates in the Orinoco Belt. High recovery rates would necessitate substantial investment in advanced technology, which companies are hesitant to undertake given Venezuela's political instability and a history of contract disputes.

Despite expert skepticism, OPEC has consistently listed Venezuela's reserves at over 300 billion barrels in its annual reports since 2011, a figure that has remained static and is cited by both government officials and the political opposition. The lack of transparency surrounding these calculations continues to fuel investor hesitation.