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Matthew Smith

Matthew Smith

Matthew Smith is Oilprice.com's Latin-America correspondent. Matthew is a veteran investor and investment management professional. He obtained a Master of Law degree and is currently located…

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Venezuela’s Oil Industry Is Killing South America's Oldest Lake

  • Over a century of oil production in the Maracaibo Basin has left Lake Maracaibo heavily polluted, with regular occurrences of oil slicks and algae blooms.
  • Rundown energy infrastructure around the lake is leaking crude oil, compounded by frequent oil spills that devastate local fishing and tourism industries.
  • Despite announcements of clean-up efforts by the Maduro regime, the continuous extraction and oil spills, combined with the country's crisis, suggest the damage to Lake Maracaibo may be irreversible.
Oil Spill

Lake Maracaibo, which is South America’s oldest lake and forms part of a crucial regional ecosystem, is dying. The five thousand square miles ecologically diverse body of water, which is home to 145 species of fish, sits at the heart of one of the world’s richest petroleum-producing regions. The lake formed around 36 million years ago and is considered the largest natural lake in South America despite being connected to the Caribbean Sea. Over a century of oil production in Venezuela’s prolific 25,000 square mile Maracaibo Basin, where over 30 billion barrels of crude oil have been lifted, has left Lake Maracaibo heavily polluted. Thin films of oil and algae blooms frequently coat the lake’s surface, while petroleum slicks are regular occurrences. Due to the magnitude of pollution, which intensified after Hugo Chavez launched his 1999 socialist Bolivarian revolution, the damage now appears irreversible. 

Lake Maracaibo is situated near the center of the Maracaibo Basin. The first petroleum discovery in the geological body was made in 1914 at the town of Mene Grande, which was followed by Royal Dutch Shell discovering the La Rosa oilfield in 1922. By 1928 commercial oil deposits under Lake Maracaibo had been identified. It is estimated that the Maracaibo Basin contains a fifth of Venezuela’s vast oil reserves, which at 303 billion barrels, are the world’s largest and responsible for roughly two-thirds of the crisis-torn country’s petroleum production. Estimates vary, but it is believed there are up to 44 billion barrels of crude oil contained in the geological body which have yet to be discovered.

There are reputedly more than 10,000 oil-related installations dotted around Lake Maracaibo and along with thousands of miles of petroleum industry pipelines crisscrossing the body of water. Much, if not all, of that aging energy industry infrastructure, including pipelines, storage tanks and derricks, has fallen into disrepair, leaving it heavily corroded and steadily leaking crude oil into the lake. According to a 2021 North American Space Agency (NASA) report, most of the crude oil entering Lake Maracaibo is coming from a vast network of aging submerged pipelines that have fallen into disrepair and are not even mapped. Oil spills are also coming from above-ground storage tanks, drilling platforms and transportation vessels.

The situation is so severe that in June 2023, the Venezuelan environmental group, the Blue Environmentalists Foundation, known in Spanish as Fundación Azul Ambientalistas (Spanish), warned of a state of emergency at Lake Maracaibo. According to the conservation group, founded in 1986 at the University of Zulia in Maracaibo, oil slicks are responsible for the widespread death of marine wildlife in what was once a highly biodiverse body of water. For years, local fishermen who make their living from Lake Maracaibo have complained of a persistent black sludge coating their boats, equipment, clothing and catches. At the end of each workday, those fishermen not only have to clean oil from there but are forced to use raw gasoline to remove the oil sludge from their hands and equipment, leaving them with prickly rashes.

Crude oil oozing into Lake Maracaibo from rickety and heavily corroded infrastructure isn’t the only problem. An array of frequent algae and duckweed blooms are also choking the lake causing oxygen levels to fall and killing marine life. In the latest development, a thick greenish film, known locally as verdin, is coating up to 70% of Lake Maracaibo (Spanish). This is the result of a photosynthetic organism, cyanobacteria which is tolerant to oil and is feeding on excess nutrients in Lake Maracaibo. The film prevents light from entering the lake’s waters, creating an aquatic greenhouse effect. This, along with the organism emitting a toxin, is killing whatever marine life is left in Lake Maracaibo. The verdin outbreak saw the Blue Environmentalist Foundation declare that the water body’s ecology is collapsing (Spanish) with claims that a combination of the verdin and frequent oil spills has led to parts of the estuary being filled with dead zones that have no marine life.

The frequency of oil spills in and around Lake Maracaibo is only growing as the autocratic Maduro regime desperately seeks to squeeze every barrel of oil out of operational assets. The Venezuelan Observatory of Environmental Human Rights (OVDHA) estimated in a 2022 report that 1,000 barrels of oil per day are being discharged into Lake Maracaibo. The Observatory of Political Ecology of Venezuela counted 86 oil spills across the country during 2022 (Spanish) compared to 77 a year earlier. More than a third of those 2022 spills, 31 in total, occurred in the state of Zulia in or around Lake Maracaibo. A member of the observatory Elsa Rodriguez, said, “There are more and more reports of spills,.” She then went on to say that many spills go unreported, which along with national oil company PDVSA refusing to provide official data and Carcas’ failure to acknowledge spills, makes it impossible to quantify the true scale of the catastrophe.

The rising volume of oil oozing into Lake Maracaibo has paralyzed the local fishing and tourism industries from which local communities eke a living. This is destroying what is left of the local economy in a country suffering from a deep and long-running economic crisis. The ongoing leakage of crude oil into Lake Maracaibo, combined with a dearth of clean-up efforts, means that after more than two decades, the damage could very well be irreversible. The latest announcement from Maduro that he has allocated resources to clean-up efforts and created a special plan of attention (Spanish) for the recovery of Lake Maracaibo underscores the gravity of the situation. Nonetheless, it is too little too late in a country where a dictatorial regime is determined to pump as much crude oil as possible regardless of the degradation that occurs. This is aggravating the already colossal environmental catastrophe underway in Venezuela. 

By Matthew Smith for Oilprice.com

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