The Devil’s Excrement and OPEC

On October 16th, Oil prices plummeted below $70 for the first time in 16 months, loosing half its value since hitting a record high of $147.27, prompting the oil cartel OPEC to call an emergency meeting.

OPEC cut production by 1.5 million barrels a day starting November after their emergency meeting on October 24th one month ahead of their scheduled meeting.

Although their next meeting was not scheduled until December 17th, the OPEC cartel will meet again this coming November 29th in Cairo, most likely to make another cut in production. In this global financial turmoil, they run the risk of taking things too far as demands for energy increase during the winter months.

The drop in prices has already created problems for oil producers, who have become accustomed to high prices. Iran needs oil prices at $95 a barrel to balance the budget, Russia needs $70, Venezuela needs $60 and Saudi Arabia needs $55 a barrel, according to Deutsche Bank estimates. Cartel representatives have hinted at the idea of fixing a price high and low, which they call “ideal” ranging between $70 and $90 a¬†barrel.

Juan Pablo Perez Alfonzo was a Venezuelan minister of energy that popularized the phrase “oil: the devil’s excrement” and the minister said that the oil corrupts the power.

Gasoline: The fall in world oil prices since July has pushed gasoline in the United States, the world’s largest oil consumer, from a high of $4.114 a gallon on average to $1.91 a gallon Monday, according to motorist group AAA.



Crude Improvement – Cerro Negro Upgrader Project

Cerro Negro is a strategic association formed by the state oil company of Venezuela, PDVSA (42 percent), ExxonMobil (42 percent) and Veba Oel of Germany (16 percent). Operadora Cerro Negro S.A., an ExxonMobil subsidiary, operates the project.

The complex can process 120,000 barrels of heavy crude oil a day, which it converts to 108,000 barrels of upgraded crude.

Initially produced in the Cerro Negro field as 8.6-degree API extra-heavy crude, the oil is diluted with naptha and transported by pipeline 190 miles to the port of Jose. The upgrader complex then converts the mixture into a 16-degree API crude oil.

[slickr-flickr tag=”cerro negro” id=”61116089@N00″ group=”n”]

Description of the process:

The Cerro Negro Upgrader complex consists of new facilities destined to improve the quality of crude initially produced in the Cerro Negro field as 8.3-degree API extra-heavy crude, in Synthetic Crude Oil (SCO) of approximately 16-degree API. In order to improve the quality of crude the Cerro Negro complex uses the technology of “Delayed Coking” and the “hydrofining of naphth” originating from the coker. The plant is designed to produce around 18495 tons per day of Synthetic Crude Oil (SCO), from the heavy Cerro Negro crude of 8.3-degree API. In production wells, the heavy crude must be diluted with naphtha, with the purpose of reducing its viscosity and to easily transport it through the pipe line towards the improvement plant. The upgrader complex consists of several units of process required to turn Diluted Crude Oil (DCO) into Synthetic Crude Oil (SCO). In addition to the units of processes required for the crude improvement of the heavy oil, there are other units or facilities such as: industrial services (steam, water cooling, etc.), storage of raw material and products, and 190 miles of pipeline in order to deliver to the port of Jose, which are necessary for the total integration of the upgrader complex in the production of the Cerro Negro crude.

General Diagram of the Process is described:

List of crude oil products

UPDATED: 11/30/2010 Credit to Oilman.