1. Exploration and
Production of Petroleum
By: Jesus Rodriguez and Pedro Rojas

2. First Years
 Since the beginning of the oil exploitation,
people started to talk about a petroleum
economy.
 New towns were founded. The first one was
La Aquitrana, Tachira, established by the
Venezuelan company la Petrolia in 1882.
 It was abandoned on 1934, since the
production of oil was not enough.

3. 1916-1933
 The companies Caribbean and Shell founded
Mene Grande (1916), in Zulia state. The
company of La Creole founded Judibana
(1922), in the Falcon Peninsula. This
population was considered the first oil
community.
 The Venezuelan Oil Concessions
established a camp in Cabimas; when the oil
well of Los Barrosos 2 blewout, the town soon
became a suburban center (1924).

4. 1916-1933
 The oil activity was involved in the
foundation of El Tigre, Anzoátegui (1932).
 On that same year the Gulf Oil Company
created the Office Camp 1, and the
population began to grow, and it was the
second most important city of the region in
the 1950’s.

5. 1937-1939
• In 1937, president Eleazar Lopez Contreras
founded Ciudad Ojeda, constructed by the oil
companies of the region.
 In 1939, in the Monagas state, Creole founded
Jusepin, which was given to the Corporación
Venezolana del Petroleo which in turn donated it
to the UDO (Universidad de Oriente) for the
creation of School of Petroleum.

6. 1941- 1943
 The town Punta de Mata, Monagas, was an
established oil camp for operations for
companies such as Sinclair, Mito Juan and
Vistaven.
 In 1943, the exploitation of Campo Las
Mercedes, El Sombrero, began, and the
companies Las Mercedes and Texaco
restored the town. In 1979, Deltaven gave it
to the military.

7. Impact on Oil Explotation
 Oil caused big transformations. Cities looked
different, means of communications were built,
modern buildings were built, educational plans were
done. Also, subsidy was granted to industrial
sectors.

8. Economic Changes
 The Agricultural economy was transformed
into a mining-exporting, mono-productive and
mono-exporting economy.
 The export of oil surpassed traditional coffee
and cacao.
 The country established bonds of economic
dependence with foreign money, which were
mainly from American, English and Dutch
companies.

9. Economic Changes
 The commercial sector was hereby released of
the agriculture because of poor exportation of
coffee and cacao.
 The Latifundistas took benefit from the rent of
their lands when they were paid by oil
companies (0.75 annual bolivares per hectare).
They also took benefit from the selling of urban
lands at speculative prices in association with
the government and commercial banking.
 An important amount of the petroleum incomes
were transferred to the construction sectors.

10. Political Changes
 Two opposing political forces emerged in the
process of transition towards the oil-
producing Venezuela.
 On one side, the traditional and autocratic
form of the government represented by the
Gomecismo.
 On the other side, the hope of change and
the aspiration to live in democracy.

11. Political Changes
 The country unified territorially and it became
centralized -the power of the State-; the
different regions were isolated.
 In the international grounds, Venezuela
came under the U.S. geopolitical
influence.

12. Social Changes
 The isolation of the agricultural production by
landowners and merchant importers and
exporters, who stopped assisting the
producers, put Venezuelan peasant under a
situation of uncertainty.
 Rural people migrated to the north central
cities of the country, and to new ones that
developed around oil camps.

13. Social Changes
 The Venezuelan workers increased with their
appearance of the industry, the construction, the
commerce and the transportation.
 The living conditions and the work of the oil
workers were poor and exploited.
 The social problems of agricultural Venezuela
such as, illiteracy, endemic diseases, the lack of
hygienic homes and lack of means of
communication, started to be confronted by the
State with educational, sanitary and housing
plans.

14. Cultural Changes
 With the arrival of new foreign technologies and the
entailment with companies, managers, professionals
and workers that came from the United States a
process of transculturation started.
 This process changed Venezuelan customs,
behavior, language and music.
 The American and European influence accentuated
the media, such as the radio, the cinema and the
television. However, the Venezuelan culture
enriched, since this media allowed them to spread
and know values from Venezuela.

15. Economic Dependence
 Beginning of the XX century, the economy
has depended on the petroleum so the
economical and social state could develop.
 From the first years of the commercialization,
the administration of the incomes has
become a political problem.
 The execution plans and constructions in the
country depended entirely partially or entirely
on the income from the petroleum.

16. Economic Dependence
 To break up with the oil dependence, it is
necessary to invest the income on the
creation, development and strengthening of
industries such as the textile, food and car
industries.
 The oil industry must turn into an economic
accelerator of goods and services.

17. Oil Policies
 Since 1926, oil became the main product of
exportation, and the major source of income
for the country. The production methods
increased to 3,366,011 daily oil barrels.
 However, most part of the income from
petroleum were done by foreign businesses
like: Standard Oil of New Jersey, and Creole
Petroleum Corporation, both from United
States,and Shell from the Dutch capital.

18. Oil Policies
 Policy of “No más Concesiones.”- After Perez
Jimenez was defeated, in 1958 the democratic
governments started to accomplish the direct
participation of the State in the oil industry.
 In 1959, the policy of granting concessions to
foreign companies for exploration and
exploitation of oil was eliminated.
 In 1960, the CVP (Corporacion Venezolana de
Petroleo) was created.

19. OPEP
 On September 14, 1960 at a conference in Bagdad,
representatives from Iraq, Saudi Arabia, Iran,
Kuwait, and Venezuela met to create the OPEP
(Organización de Paises Exportadores de Petroleo),
this was created to protect the prices of the
petroleum world wide.
 After that, the countries of Qatar, Libya, Indonesia,
United Arab Emirates, Nigeria, Ecuador and Gabon
started to be part of this organization.
 During the first years of the OPEP it was ignored by
the developed countries until 1965 ,when it was
mentioned by the United Nations.

20. Oil Nationalization
 The initiation of the nationalization was in the year of
1943 with the approval of the law of Hydrocarbons.
 The nationalization of the oil industry advanced
because of the decision of international companies
to not continue the exploration and extraction of
petroleum.
 (1971) Ley de Rervesión de los Bienes Afectos a la
industria Petrolera and the Ley Reserva el Estado la
Industria del Gas Natural promulgated, and in
(1973) Ley Reserva al Estado el Comercio Interno
de los Productos Derivados del Petroleo were
promulgated.

21. Oil Nationalization
 Finally, in 1975, the National Congress
approved the Ley Organica Reserva el
Estado la Industria y el Comercio de los
Hidrocarburos, also known as Ley de
Nacionalizacion del Petroleo.

22. Opening of Venezuela’s Oil
Industry
 The nationalization of Oil in 1976 included
the Article- 5 empowered the State to
celebrate agreements with private
associations or companies, from inside and
outside the country.
 In 1992, the state and the international
companies associated to exploit the Strip of
the Orinoco, and the natural gas reserves.