OPEC says Venezuela’s oil reserves are biggest

CARACAS, Venezuela – OPEC’s latest figures have Venezuela as the country with the biggest proven crude oil reserves ahead of Saudi Arabia. But analysts said Wednesday it’s an increase largely on paper and unlikely to lead to changes within the organization or affect oil markets.

Venezuela’s proven crude reserves have risen to 296.5 billion barrels, surpassing Saudi Arabia’s more than 264.5 billion barrels, the Organization of Petroleum Exporting Countries said in its annual statistical report issued last week.

“I don’t necessarily think it’s going to change the fundamental dynamics at OPEC,” said Jason Schenker, an energy analyst and president of Austin, Texas-based Prestige Economics LLC.

He and other analysts said Venezuela’s reserves have apparently grown by including more of the country’s unconventional extra-heavy crude, which is much more difficult and expensive to extract from the ground and to process than oil found elsewhere.

Schenker said that while Venezuela’s reserves are “going to be critical for global oil supplies in the future, processing this oil into usable products is likely to be at a more expensive point in the cost curve than a number of crudes produced by different OPEC member states.”

Venezuelan President Hugo Chavez said in January that the country had dramatically increased its oil reserves.