Venezuela's PDVSA Sends Oil to Asia to Fetch Better Price

Petroleos de Venezuela SA, the state oil company, gets a higher oil price by selling crude to Asia rather than the U.S. and will continue to diversify its export markets, said company president Rafael Ramirez.

Venezuela’s growing exports to Asia accounts for the country’s export basket price being above U.S. benchmark West Texas Intermediate crude, Ramirez said today at an event in Caracas. West Texas Intermediate crude on the New York Mercantile Exchange currently sells for about 11 percent less than Brent oil, according to data compiled by Bloomberg.

“We don’t sell discounted oil to anyone,” Ramirez said today. “We get more for oil that we ship to Asia than we get from oil that we sell to the U.S. and are sending more oil and fuel oil to China as a result.”

Venezuela, South America’s largest oil producer, curtails production to comply with its OPEC quota and keep oil prices from falling, Ramirez said. The country plans to produce an average of 3.13 million barrels a day of oil in 2012 and end the year with daily production capacity of 3.5 million barrels, said Ramirez, who is also the country’s oil and mining minister.

“We’re worried about stability in oil prices and working to construct a price floor of $100 a barrel. We see some OPEC countries producing more than their quotas,” Ramirez told reporters. “Rising inventories are a terrible signal that there is over production.”

The country’s oil export price fell 1 percent in the week ending April 13 to $113.85 from $115.01 the prior week.

Crude Production

Venezuela’s price is above West Texas Intermediate crude oil for May delivery, which advanced $1.27, or 1.2 percent, to $104.20 a barrel at 2:05 p.m.

Brent oil for June settlement rose 32 cents, or 0.3 percent, to $119 a barrel on the London-based ICE Futures Europe exchange.

PDVSA, as the Caracas-based company is called, averaged production of 2.99 million barrels of oil a day last year, a 0.5 percent increase from 2010, the company said today in a presentation on its 2011 financial results. Exports rose 2.2 percent to 2.5 million barrels a day.

PDVSA will need to raise 81 percent of the $236 billion that the company wants to invest through 2018 and its partners will raise 19 percent, the minister said today in a presentation.

The company has no plans to sell new dollar-denominated bonds at the moment, Ramirez said without elaborating.

To contact the reporter on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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