Hugo Chavez now controls the Orinoco Belt. What does this mean for the world of oil supply? On May 1, Venezuela took control of the Orinoco Belt. The Orinoco Belt just may contain the world's most extensive oil fields. And for the decade previous, Big Oil has had its say in the Orinoco Belt, investing close to $20 billion in development. Such companies as ExxonMobil (XOM), ConocoPhillips (COP), Statoil (STO), Total SA (TTFNF.PK), BP (BP) and Chevron (CVX) have been calling the shots. Now Hugo Chavez and the state-run oil company Petroleos de Venezuela (also known as PDVSA) control a 60 percent stake and a greater responsibility for investments. For big oil, this means that the payout won't be as large.

But can PDVSA (PVZ.YY) handle the projects under development along the Orinoco Belt? At first glance, the company seems to be doing well. With more than $100 billion in revenues (including those from U.S. retail arm Citgo), and high expectations to increase daily oil output (from the OPEC estimate of 2.3-2.5 million barrels to 5.8 million barrels by 2012), PDVSA appears ready to stand toe-to-toe with Big Oil. However, the oil found in the Orinoco Belt is heavy, sticky and requires a rather involved process to refine into usable oil, and some analysts insist that PDVSA lacks the ability to up production because the company has not invested in its infrastructure. The Washington Post reports:

'I think the consensus is that the company is in a very weak position,' said David R. Mares a Latin America expert at the University of California at San Diego and co-author of a study of the firm. 'For PDVSA, that's a particular problem because it means that with their inefficiencies, with higher prices, it's difficult for them to explore and to do more. They have multiple points where they're significantly weaker.'

So PDVSA may not be the best investment choice right now. It is likely to be worse in the future. But Big Oil in general? The nationalization of the Orinoco Belt hasn't really hurt Big Oil shares. Indeed, the share prices are still gaining on the stock market. And the fact that PDVSA may not be able to ramp up production or efficiently develop the Orinoco Belt means that the world oil supply won't be suddenly flooded with oil, lowering prices. Demand for oil from developing nations like India and China, as well as continued demand from the US, are likely to keep the pressure on, meaning that the profits will keep pouring into Big Oil. We may not see $4 gas, but Big Oil doesn't need it that high to cash in.