I still can’t believe that the Government and PDVSA have decided to do away with the Orimulsion project. For those that don’t know, Orimulsion was a fuel oil substitute developed in Venezuela using heavy crudes (70%) suspended in water (30%) in the form of an emulsion. For years PDVSA and its research and development center worked on this project until they made it into a real commercial project. Power pants in the US, China, Korea the UK, Italy and other countries began importing this cheaper product to generate electricity. For Venezuela Orimulsion had a number of advantages, first, it allowed the country to export the cheaper heavy crudes, the process is fairly economical and the product is not covered by the country’s OPEC quotas. PDVSA even created a company called Bitor to commercialize the product which had been quiet successful despite charges that it was quite dirty as a burning fuel. In fact, I consider Orimulsion to be the most important contribution by Venezuelan Science and Technology to the economy.
Given this preamble, I was quite shocked to learn that the Chavez administration had decided to ditch the Orimulsion project reportedly because it is intensive in knowledge and technical expertise and those that have that are part of the people fired from PDVSA. While some reports say that only new projects will be cancelled, the Italian Ambassador to Venezuela visited the Vice-President today to express his dismay on his country not receiving any more Orimulsion. Thus, once again, the Chavze administration puts politics above everything else, simply canceling a project that would add to economic activity and would bring foreign reserves to the country and profits to PDVSA. According to former PDVSA executives, just the fact that Canada’s New Brunswick Power will not initiate its Orimulsion project will cost the Republic US$ 750 million in 2004 alone. Reportedly PDVSA will replace Orimulsion by fuel oil. Orimulsion was designed to compete in costs with coal not with fuel oil and its margins are more attractive. As usual, there was confusion on the issue, while the Italian Ambassador expressed his concerns to the Vice-President, PDVSA’ General Manger told Globovision that the current contracts would be fulfilled. Venezuela is the only country in the world which produces Orimulsion.
The Devil's Excrement 
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