Bitumen and the Orimulsion Business

Published at: 25/09/2026 05:00 PM

One of the oil businesses that produced the most losses for Venezuela was that of Orimulsion .

This business was presented in 1988 as the great scientific development that would increase national revenues with the extraction and processing of bitumen, which received royalties of less than 1%, on the premise that it was a mineral and not oil, direct revenues for the Venezuelan public coffers were miniscule.

Venezuelan university professor Antonio Silva Sprock, carried out research called ORIMULSION: a discredited innovation, published by the Universidad de los Andes in 2022, explained that “scientifically, it was an innovative proposal and during the last quarter of the 20th century, Petroleos de Venezuela, S.A. (PDVSA) and specifically its subsidiary INTEVEP, worked on research to facilitate the production and transportation of these crudes, and in the face of the global decline in oil prices, it incorporated a new variable into the studies, dealing with the possibility of creating a new fuel that would compete with coal through the combination of heavy and extra heavy crude oils with water, generating Orimulsion”.

Silva Sprock added that “however, this scientific development was far from being a business, since it presented significant financial losses for the nation and an investment that caused unprecedented ecological damage, compromising the region's freshwater reserves.”

Through the subsidiary BITOR (Bitumen del Orinoco, S.A.), the country successfully exported millions of barrels to thermoelectric plants around the world, until the business was completely deactivated in the early 2000s due to a radical change in the fiscal and oil strategy of the Venezuelan State.

It was not until 2001, under the management of President Hugo Chávez and under the influence of oil advisor Bernard Mommer, that the Venezuelan government began the dismantling of BITOR and suspended supply contracts. The central arguments of this policy were as follows:

Low return value : Selling bitumen as Orimulsion generated a very low price per barrel (approx. $4 to $6 USD) and provided minimum tax royalties to the State (royalties of only 1%).

Improvement strategy : The government argued that bitumen was actually extra heavy oil. They decided that it was financially more profitable to partner with transnational corporations to build crude oil improvers in the José Complex, converting that dense oil into lightweight synthetic crude (such as Merey), which was sold at substantially higher prices in the international refining market.

Water use : The high environmental impact resulting from the enormous consumption and subsequent contamination of millions of liters of fresh water needed for the emulsion process was also criticized.

The main argument for closing the business was low tax returns. Under the BITOR subsidiary 's commercial scheme, orimulsion was sold with a cost and price structure designed to compete with coal, not oil. The commercial strategy was to compete by volume against cheap coal, instead of maximizing the value per barrel in the refining market.

Finally, commercial operations of this product formally ceased in December 2003. The production infrastructure was reconfigured and BITOR's assets were transformed into joint ventures dedicated strictly to the blending and improvement of heavy crude oils.

AMELYREN BASABE/Mazo News Team