Chavez rules out return to cheap oil

If you thought high oil prices were just a blip think again – Venezuelan President Hugo Chavez has ruled out any return to the era of cheap oil.

In an interview with BBC Newsnight’s Greg Palast, Mr Chavez – who is due to host the Opec meeting on 1 June in Caracas – said he would ask the oil cartel to set $50 a barrel as the long term level.

..Analysis by the US Department of Energy (DoE) – seen by Newsnight – shows that at $50 a barrel Venezuela – not Saudi Arabia – will have the biggest oil reserves in Opec.

Venezuela has vast deposits of extra-heavy oil in the Orinoco. Traditionally these have not been counted because at $20 a barrel they were too expensive to exploit – but at $50 a barrel melting them into liquid petroleum becomes extremely profitable.

The DoE report shows that at today’s prices Venezuela’s oil reserves are bigger than those of the entire Middle East – including Saudi Arabia, the Gulf states, Iran and Iraq.

The US agency also identifies Canada as another future oil superpower.

Venezuela’s deposits alone could extend the oil age for another 100 years.

BBC