Venezuela hopes to catapult past Saudi Arabia as the world leader in certified crude oil reserves when it finishes registering oil deposits in its vast Orinoco Belt this year.

An increase of 22.5 percent in the Latin American country's reserves was behind OPEC's announcement last week that the group's proven reserves rose in 2009 to 1.06 trillion barrels.

"We hope to end 2010 with the incorporation of (another) 105 billion barrels of proven reserves. With this achievement, Venezuela would become the country with the biggest certified crude reserves (316 billion barrels) on the planet," President Hugo Chavez's government said in a statement at the weekend.

Saudi Arabia has 265 billion barrels of reserves, according to its latest statement to OPEC. But its big advantage is that its oil is mostly light, conventional, easily-pumped crude.

Venezuela's Orinoco belt deposits are extra heavy tar-like sour crude that must be upgraded or mixed with a lighter grade to create an exportable blend. But there is a lot of it.

In January, the U.S. Geological Survey gave credibility to the Caracas government's long-held assertions by saying the Orinoco belt held some 513 billion barrels of crude that could be recovered — if costs were not an issue.

There are doubts about when touted projects to tap the area will come online because of mismanagement in state oil company PDVSA, which has a majority stake in each Orinoco block, and political uncertainty about investing in Venezuela, where Chavez has nationalized most of the oil industry.

That included taking over multibillion dollar Orinoco projects run by U.S. majors Exxon Mobil and ConocoPhillips in 2007, followed by expropriating the assets of 76 smaller oil service companies in May last year.

But those concerns did not stop Venezuela signing several contracts in February with energy companies for projects slated to add 2.1 million barrels per day (bpd) of new production and draw some $80 billion in investment.

Most interesting are Junin block 5, where Italy's Eni has a 40 percent stake, Carabobo project 3, where U.S. major Chevron has a 34 percent interest, and Carabobo project 1, where Spain's Repsol has 11 percent.

"The question is, to what extent will PDVSA let their partners participate? Because they do have skilled partners in these blocks with the experience that's needed," said one consultant who works in the sector and asked not to be named.

Elsewhere in the Orinoco, Chavez's socialist government has awarded deals to Chinese, Indian, Vietnamese, Japanese and Malaysian firms, and to a consortium of five Russian companies.

These firms have less experience handling extra heavy crude.

Francisco Monaldi, an energy expert and professor at Caracas' Higher Management Studies Institute business school, said a reserve audit by U.S.-based petroleum consultant Ryder Scott had given more credibility to the already well established approximate figure of oil in place in the Orinoco.

"What it did not provide is an audited figure on the recovery rate. The government uses a recovery rate of 20 percent, well above the actual rate obtained in the Orinoco projects (around 9 percent)," Monaldi told Reuters.

The technology needed to pump the Orinoco's ultra-heavy crude is much more complicated and expensive than light oil machinery.

But since analysts say the world's reserves of easy-to-produce light oil are running out, the future of the industry is in more difficult production areas like the Orinoco Belt, Brazil's deep water fields or Canada's tar sands.

In Venezuela, many of the planned projects are in isolated rural areas that lack even basic infrastructure.

Until those challenges are overcome, experts say, the country's huge reserves statistics remain just numbers on spreadsheets.

Development will also depend on global oil prices that fell to near $32 in late 2008 from a historic high of $147 in July of that year, and are currently at around $75.

"Oil in the ground has zero value," said Jorge Pinon, a former oil executive, and now visiting research fellow with Florida International University's American and Caribbean Center. "The development of the Orinoco reserves is very expensive and complex and can only be monetized if the long term price forecast of oil is over the range of $75 to $85 per barrel."

Venezuela's relative success at its Orinoco blocks auction in February is testament to the fact that oil majors are scouring the globe for increasingly scarce reserves, and many are willing to push aside political risk concerns to lock in future supply and boost chances of winning further projects. They now hope to see a more investment-friendly approach from PDVSA and Chavez's socialist administration.

"Venezuela should be locking in contracts and treating these companies well. It's well known the oil is there, so the exploration risk is minimal," said Brian Gambill, managing director at Manning & Napier Advisors in Rochester, New York.

"For any company with a business plan that involves investing in Venezuela, if it involves anything more than maintenance of assets that are already in place, at the moment, I think shareholders are going to react quite badly to that."