Chapter 148: That Time I Got Into the Oil Business in South America (3)

TL: Skye

Excluding its offshore fields, Venezuela's oil fields can be broadly divided into two major regions.

The first is Lake Maracaibo. An enormous quantity of crude oil lies beneath the lake in northwestern Venezuela.

The crude there is relatively high-quality and easy to extract, so development began in 1914. Today, Venezuela's state-owned oil company, PDVSA, has driven out the oil majors and spent decades pumping crude from the field.

However, after more than a century of extraction, it no longer produces anything close to the volumes it once did.

The other is the Orinoco Belt, the world's largest crude oil deposit, stretching six hundred kilometers east to west along the Orinoco River across southern Venezuela.

Its estimated reserves alone exceed 200 billion barrels. More than Saudi Arabia's total reserves.

But the crude in the Orinoco Belt was a little different from ordinary crude oil.

If conventional crude flowed like water, Orinoco extra-heavy crude was more viscous than honey.

It would not rise from underground on its own, and extracting it through conventional drilling methods was extremely difficult.

Naturally, that made it expensive to turn into a marketable product as well.

Getting Orinoco extra-heavy crude from extraction to a marketable state cost more than forty dollars per barrel. If oil prices fell below forty dollars, the operation ran at a loss.

In other words, unless oil prices were above a hundred dollars a barrel, as they were now, the economics simply did not work.

But on closer examination, blaming the high production costs was little more than an excuse.

Canada's oil sands also contained extra-heavy crude. Their extraction costs were every bit as high as those of the Orinoco Belt.

But Canada had not simply sat around doing nothing.

Even during periods of low oil prices, it introduced new technologies, upgraded equipment, and optimized its processes to lower extraction costs.

After years of painstaking effort, Canada managed to bring extraction costs down into the twenty-dollar range per barrel and achieve a stable total production cost of thirty-five dollars by the time the crude was market-ready.

But what about Venezuela?

PDVSA went in the exact opposite direction.

Far from introducing new technology, it could not even properly maintain the extraction equipment it already had, causing production costs to rise with each passing year.

The Chavez administration poured its oil revenue into welfare spending while cutting PDVSA's equipment investment budget, and as skilled personnel left the country, its technical capabilities deteriorated rapidly.

The result was the bizarre situation of a country possessing the world's largest crude oil reserves while being unable to extract them properly.

Even when it did manage to extract the crude, there was another problem. Extra-heavy crude could not be processed in ordinary refineries. It required specialized refining equipment called a coker, but PDVSA had no such facilities, creating the absurd situation where Venezuela exported crude cheaply overseas while importing petroleum products.

There was only one way to solve all of these problems.

Bring in companies with the technology and capital, as well as the expertise to refine the crude.

After Maduro was ousted and Telsy came to power, the American oil majors began exploring ways to enter Venezuela.

But it was not easy. The Telsy administration kept direct entry by American companies in check, and Venezuelan public opinion was also highly sensitive to the idea of handing the country's oil fields over to the Americans.

That was why they chose San Marcos as an indirect route.

A country Venezuelans regarded as a brother nation.

A country that had not only provided them with food and jobs, but had also taken in one million refugees.

If San Marcos stood at the front, public resistance diminished even with the American oil majors standing behind it.

On top of that, the Tortilla Energy plant had a coker imported from Korea. Its geopolitical location was perfect as well.

In the end, Telsy had no other viable option, and so Black Oil, the joint venture between San Marcos and the oil majors, began its advance into the Orinoco Belt.

Libertad Port.

The massive cargo ships docked at the harbor raised anchor one after another.

Their destination was the port of Ciudad Bolívar in eastern Venezuela.

It was the gateway into the interior along the Orinoco River.

The first ship carried a complete set of drilling equipment along with two of the latest American drilling rigs.

Each was a steel structure more than forty meters tall, capable of lowering a drill thousands of meters underground.

The second ship safely carried the key equipment needed to extract extra-heavy crude, the SAGD system.

The method involved injecting high-temperature, high-pressure steam underground to melt crude that had hardened like tar, allowing it to flow downward under gravity for recovery. The equipment included boilers, steam generators, and machinery for drilling paired horizontal wells.

The third ship carried tens of thousands of tons of steel pipe and pipelines that would transport crude from the Block to the port, while the final ship carried two hundred container housing units for the workers.

And then there was the manpower.

Three hundred Black Oil technical personnel. Drilling specialists drawn from ExxonMobil, ConocoPhillips, and Occidental had all been mobilized.

Every last one of them was a veteran who had cut his teeth in the oil fields of the Middle East and Africa.

The workers dispatched from San Marcos boarded the ships as well.

All 1,500 of them belonged to Tortilla Construction, seasoned laborers who were thoroughly accustomed to hard construction work.

And so they arrived at Bolívar Port.

The moment he disembarked, CEO Harper headed straight for the site and looked over the Block they had been granted.

“Whew, this certainly isn't going to be easy.”

It had been neglected so badly that there was nothing but trees, brush, and wetlands.

The roads did not even properly reach the site, and there was neither electricity nor clean water. The only trace of civilization was drilling equipment that no longer worked.

But that was fine.

They had come expecting exactly this.

“Tell them to get started.”

“Yes, sir.”

The first thing Black Oil's drilling team did was order Tortilla Construction to clear the jungle and lay down a road.

After all the nationwide highway construction it had handled, this sort of work was Tortilla Construction's specialty.

THUD! RUMBLE!

Within ten minutes of the order being given, bulldozers were shoving trees aside while excavators ripped their roots from the ground.

An area of jungle equivalent to two soccer fields disappeared every day.

Behind them, gravel was laid down and compacted into a temporary road.

In just three weeks, roughly eighty kilometers of unpaved road had been opened between the port and the Block.

The container housing was installed at the same time as the roadwork.

Two hundred container units were lined up, and the generators began running.

Water purification facilities came online, providing clean water, and satellite communication antennas were erected, allowing contact with the outside world.

A small town had effectively been built in the middle of the jungle.

Of course, the environment was brutal.

Humidity in the tropical climate sometimes exceeded ninety percent.

Just breathing seemed enough to soak their clothes. Temperatures reached thirty-eight degrees during the day and never dropped below twenty-eight even at night.

Worse still, mosquitoes descended in clouds. The danger of malaria and dengue fever was ever-present. Everyone had been vaccinated, but the risk remained serious enough that the medical team conducted daily checks and distributed preventive medication.

The ExxonMobil engineers complained.

“Even the Middle Eastern desert was better than this.”

“At least the snakes in Saudi never came after us.”

“I swear, it feels like the jungle itself is trying to eat us.”

The San Marcos workers, on the other hand, were different.

For men from Tortilla Construction, conditions like these were not all that different from the job sites they had already worked on.

“This isn't bad at all.”

“They're paying us when we only work eight hours a day?”

“And we only work five days a week?”

“To think His Excellency would bestow such a cushy job upon us! As expected of His Excellency!”

“His Excellency's grace is vast as the heavens~”

“The more we look up, the higher it rises~”

A hymn rang out from the middle of the jungle.

The environment was harsh, but morale was high.

Their loyalty to His Excellency, and their pride in working on a project personally ordered by him, overcame even the brutal conditions of the jungle.

*

And so, three months passed.

At last, the roads and infrastructure were in place, allowing them to move the drilling equipment into the Block and begin drilling in earnest.

Block A-7. Drilling Site No. 1.

A forty-meter drilling rig towered over the jungle.

An engine roared at the top of the steel framework as the enormous drill bit slowly began boring into the earth.

The extra-heavy crude of the Orinoco Belt lay between two hundred and fifteen hundred meters underground.

In a sense, that could be considered relatively shallow, but it could not be extracted through conventional vertical drilling.

The crude had hardened to the consistency of tar, and pump pressure alone could not force it to the surface.

That was why they used SAGD(Steam-Assisted Gravity Drainage).

The principle was simple.

First, two horizontal wells were drilled.

One above, and one below.

Then steam heated to more than three hundred degrees was injected through the upper well.

The steam began melting the heavy crude underground that had hardened like tar.

The liquefied crude flowed downward under gravity into the lower well. From there, a pump drew the crude to the surface.

The principle was simple, but the technique demanded precision.

If the gap between the two wells exceeded five meters, the steam would fail to properly reach the oil-bearing layer.

But if they were too close together, the wells could merge, ruining the entire setup.

To make the process work, two horizontal wells had to be drilled hundreds of meters underground while maintaining a separation of almost exactly five meters.

That was why Mike, Black Oil's drilling team lead, never took his eyes off the monitor.

“Horizontal transition depth, eight hundred fifty meters. Azimuth, eighty-seven degrees. If we're off by even half a degree, we'll have to start all over again, so stay focused.”

The drill bored vertically down to eight hundred fifty meters before changing direction and transitioning to horizontal drilling. From a depth of eight hundred fifty meters, it had to bore another six hundred meters horizontally.

It took days. They advanced fifty meters each day.

Every member of the drilling team watched the drill's trajectory on the monitor with bated breath.

“Horizontal length, two hundred meters.”

“Four hundred meters.”

“Six hundred meters. Target reached!”

Cheers erupted. The first horizontal well was complete.

They repeated the same process to drill the second horizontal well, exactly five meters below the first.

“Spacing confirmed. Four point eight meters. Within tolerance!”

“Steam on!”

Then the boilers came online.

High-temperature steam began pouring into the upper well.

HSSSSSS-!

Steam heated above three hundred degrees traveled through the pipe to a depth of eight hundred fifty meters.

The steam reached the extra-heavy crude underground.

Bubble, bubble.

The crude that had lain dormant beneath the earth slowly began to melt.

Several days passed. The pressure gauge on the lower well began to shift ever so slightly.

“Pressure increase confirmed! The crude is flowing down!”

Harper rushed over to the monitor.

“Start the pump!”

The pump connected to the lower well came to life.

WHIRR- WHIRR- WHIRR-

The mechanical hum echoed through the jungle.

The pipe vibrated. Something was coming up.

And then.

SPLOOSH!

Black liquid gushed from the end of the pipe.

Thick, heavy, sticky black liquid.

Crude oil from the Orinoco Belt.

“We've got it! We've got oil!”

The site exploded in cheers. Some men threw off their helmets, others embraced, and still others shouted toward the sky.

The San Marcos workers, high on patriotic fervor, swayed their shoulders and began singing the national anthem.

"We were starving, and he gave us food~ We were ragged, and he gave us homes."

"His Excellency's grace is deeper than the Caribbean Sea~ His Excellency's will rises higher than the heavens."

"O our father ~How could we ever repay such grace"