Venezuela’s oil minister made a surprise appearance at an energy event in India as the Opec producer seeks closer ties with major crude customers due to U.S. sanctions.
Manuel Quevedo, who’s also the head of state producer Petroleos de Venezuela SA (PDVSA), said Monday his nation wants to sell more crude to India, and U.S. sanctions have resulted in a $20 billion loss to the Latin American country’s economy, Bloomberg reported.
His arrival in India coincides with speculation over the future of the Venezuelan oil industry after the U.S., its largest customer, importing roughly 400,000 barrels per day of crude, blocked imports, Kallanish Energy reports.
PDVSA working to keep buyers
PDVSA is working to retain buyers in other countries such as China after American refiners halted purchases. The U.S. wants Venezuelan President Nicolas Maduro to cede power to an interim government led by Juan Guaido, a lawmaker who claims he’s the country’s rightful leader.
India is set to emerge as Venezuela’s preferred customer due to the nation’s willingness to pay for crude in cash, unlike China, which has entered into oil-for-loans deals.
Output could keep falling
One of the founding members of Opec, Venezuela’s output could decline further if it fails to secure enough funds for upstream investments, after production halved from 2016 levels, to roughly 1.3 million barrels a day (Mmbpd) in January.
Quevedo, who met Indian Oil Minister Dharmendra Pradhan Monday, said Venezuela has a “healthy relationship” with the Asian country.
“I have met the Indian oil minister, we are going to meet again,” Quevedo said in New Delhi. “We have a good relationship with India and we want to continue this relationship.”
Double sales to India
Venezuela, which is selling more than 300,000 barrels a day to India, wants to more than double sales to the South Asian nation, according to Quevedo.
The U.S. sanctions have cut Venezuela’s oil exports to a 10-month low. Last year, the nation loaded one vessel a day on average for U.S. refiners.
Floating storage facilities
After the American restrictions were imposed on Jan. 28, only one tanker has loaded in 10 days. That has turned oil tankers into floating storage facilities. There are more than 8 million barrels of Venezuelan crude sitting in tankers all over the Gulf of Mexico, Bloomberg reported.
Guaido, the head of Venezuela’s National Assembly, is trying to wrest ownership of PDVSA’s Houston-based unit, Citgo Petroleum, away from the current regime. The move forms part of his strategy to topple Maduro and install an interim government that would call new elections. Guaido has said he plans to name a new board of directors for the state producer and its U.S. subsidiary.
This post appeared first on Kallanish Energy News.