1. Exploration and Production of PetroleumBy: Jesus Rodriguez and Pedro Rojas

2. First Years Since the beginning of the oil exploitation,people started to talk about a petroleumeconomy. New towns were founded. The first one wasLa Aquitrana, Tachira, established by theVenezuelan company la Petrolia in 1882. It was abandoned on 1934, since theproduction of oil was not enough. 3. 1916-1933 The companies Caribbean and Shell foundedMene Grande (1916), in Zulia state. Thecompany of La Creole founded Judibana(1922), in the Falcon Peninsula. Thispopulation was considered the first oilcommunity.The Venezuelan Oil Concessionsestablished a camp in Cabimas; when the oilwell of Los Barrosos 2 blewout, the town soonbecame a suburban center (1924). 4. 1916-1933 The oil activity was involved in thefoundation of El Tigre, Anzotegui (1932). On that same year the Gulf Oil Companycreated the Office Camp 1, and thepopulation began to grow, and it was thesecond most important city of the region inthe 1950s. 5. 1937-1939In 1937, president Eleazar Lopez Contrerasfounded Ciudad Ojeda, constructed by the oilcompanies of the region. In 1939, in the Monagas state, Creole foundedJusepin, which was given to the CorporacinVenezolana del Petroleo which in turn donated itto the UDO (Universidad de Oriente) for thecreation of School of Petroleum. 6. 1941- 1943 The town Punta de Mata, Monagas, was anestablished oil camp for operations forcompanies such as Sinclair, Mito Juan andVistaven. In 1943, the exploitation of Campo LasMercedes, El Sombrero, began, and thecompanies Las Mercedes and Texacorestored the town. In 1979, Deltaven gave itto the military. 7. Impact on Oil Explotation Oil caused big transformations. Cities lookeddifferent, means of communications were built,modern buildings were built, educational plans weredone. Also, subsidy was granted to industrialsectors. 8. Economic Changes The Agricultural economy was transformedinto a mining-exporting, mono-productive andmono-exporting economy. The export of oil surpassed traditional coffeeand cacao. The country established bonds of economicdependence with foreign money, which weremainly from American, English and Dutchcompanies. 9. Economic Changes The commercial sector was hereby released ofthe agriculture because of poor exportation ofcoffee and cacao. The Latifundistas took benefit from the rent oftheir lands when they were paid by oilcompanies (0.75 annual bolivares per hectare).They also took benefit from the selling of urbanlands at speculative prices in association withthe government and commercial banking. An important amount of the petroleum incomeswere transferred to the construction sectors. 10. Political Changes Two opposing political forces emerged in theprocess of transition towards the oil-producing Venezuela. On one side, the traditional and autocraticform of the government represented by theGomecismo. On the other side, the hope of change andthe aspiration to live in democracy. 11. Political Changes The country unified territorially and it becamecentralized -the power of the State-; thedifferent regions were isolated. In the international grounds, Venezuelacame under the U.S. geopoliticalinfluence. 12. Social Changes The isolation of the agricultural production bylandowners and merchant importers andexporters, who stopped assisting theproducers, put Venezuelan peasant under asituation of uncertainty. Rural people migrated to the north centralcities of the country, and to new ones thatdeveloped around oil camps. 13. Social Changes The Venezuelan workers increased with theirappearance of the industry, the construction, thecommerce and the transportation. The living conditions and the work of the oilworkers were poor and exploited. The social problems of agricultural Venezuelasuch as, illiteracy, endemic diseases, the lack ofhygienic homes and lack of means ofcommunication, started to be confronted by theState with educational, sanitary and housingplans. 14. Cultural Changes With the arrival of new foreign technologies and theentailment with companies, managers, professionalsand workers that came from the United States aprocess of transculturation started. This process changed Venezuelan customs,behavior, language and music. The American and European influence accentuatedthe media, such as the radio, the cinema and thetelevision. However, the Venezuelan cultureenriched, since this media allowed them to spreadand know values from Venezuela. 15. Economic Dependence Beginning of the XX century, the economyhas depended on the petroleum so theeconomical and social state could develop. From the first years of the commercialization,the administration of the incomes hasbecome a political problem. The execution plans and constructions in thecountry depended entirely partially or entirelyon the income from the petroleum. 16. Economic Dependence To break up with the oil dependence, it isnecessary to invest the income on thecreation, development and strengthening ofindustries such as the textile, food and carindustries. The oil industry must turn into an economicaccelerator of goods and services. 17. Oil Policies Since 1926, oil became the main product ofexportation, and the major source of incomefor the country. The production methodsincreased to 3,366,011 daily oil barrels. However, most part of the income frompetroleum were done by foreign businesseslike: Standard Oil of New Jersey, and CreolePetroleum Corporation, both from UnitedStates,and Shell from the Dutch capital. 18. Oil Policies Policy of No ms Concesiones.- After PerezJimenez was defeated, in 1958 the democraticgovernments started to accomplish the directparticipation of the State in the oil industry. In 1959, the policy of granting concessions toforeign companies for exploration andexploitation of oil was eliminated. In 1960, the CVP (Corporacion Venezolana dePetroleo) 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(Organizacin de Paises Exportadores de Petroleo),this was created to protect the prices of thepetroleum world wide. After that, the countries of Qatar, Libya, Indonesia,United Arab Emirates, Nigeria, Ecuador and Gabonstarted to be part of this organization. During the first years of the OPEP it was ignored bythe developed countries until 1965 ,when it wasmentioned by the United Nations. 20. Oil Nationalization The initiation of the nationalization was in the year of1943 with the approval of the law of Hydrocarbons. The nationalization of the oil industry advancedbecause of the decision of international companiesto not continue the exploration and extraction ofpetroleum. (1971) Ley de Rervesin de los Bienes Afectos a laindustria Petrolera and the Ley Reserva el Estado laIndustria del Gas Natural promulgated, and in(1973) Ley Reserva al Estado el Comercio Internode los Productos Derivados del Petroleo werepromulgated. 21. Oil Nationalization Finally, in 1975, the National Congressapproved the Ley Organica Reserva elEstado la Industria y el Comercio de losHidrocarburos, also known as Ley deNacionalizacion del Petroleo. 22. Opening of Venezuelas OilIndustry 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.