April 8 (Bloomberg) -- Venezuela will hold a second dollar auction on a complementary currency system created last month after presidential elections are held on April 14, Oil Minister Rafael Ramirez told reporters yesterday during an interview.
The South American country won’t publish the exchange rate used in future auctions, he said. It will publish a schedule for the sales and plans to make them more accessible to importers, Ramirez, who sits on a new currency supervising board, said from his Caracas office.
“Companies involved in the process know the parallel exchange rate does not represent the economy,” Ramirez said, referring to the black market. “The first dollar auction was a test run.”
Venezuela, which is seeking to arrest the decline of its bolivar currency on the black market after a February devaluation, plans to create an electronic system for students and health-care patients to obtain dollars at the official exchange rate, Ramirez said, without providing information. The country sold $200 million to importers in a March 27 dollar auction without revealing the exchange rate used.
The bolivar has declined about 24 percent on the black market this year, according to Dolar Today, a website that tracks the exchange rate on the Venezuelan border with Colombia. The currency currently trades at about 23 per dollar on the black market, compared with 6.3 on the Cadivi system reserved for importers of essential items, such as medicine.
Acting President Nicolas Maduro faces opposition candidate Henrique Capriles Radonski in a snap election on April 14 after former President Hugo Chavez died last month.
“Those companies that participated in the auction now know it’s silly to go to the black market and be robbed,” Ramirez said. “The system will be normalized and that will produce confidence.”
Petroleos de Venezuela SA, of which Ramirez is also president, transferred $39.4 billion to the central bank in 2012 and will transfer $41.5 billion this year, he said.
PDVSA, as the Caracas-based company is called, is not planning to sell new dollar bonds this year and will ask joint venture partners to finance at least $8 billion of a $25 billion investment plan, Ramirez said. The company is continuing to negotiate loans from Chevron Corp. and companies in China, Spain, Russia and Japan, Ramirez said.
“Loans from partners are more advantageous,” Ramirez said, adding that interest rates for financing from partners average about 6 percent. “We’re not desperate to issue debt at a speculative interest rate. We don’t need to.”
China National Petroleum Corp will lend PDVSA $4 billion, and Chevron will lend the company $2 billion, Ramirez said.
PDVSA had revenue of $124.4 billion in 2012, down from $124.8 billion in 2011, while profit decreased to $4.2 billion from $4.5 billion, the minister said last month.
“The decline in revenue does not worry us,” Ramirez said yesterday, attributing the drop to increased sales of subsidized fuel in Venezuela.
Venezuela produced 3.03 million barrels of oil and natural gas liquids a day in 2012, compared with 3.13 million in 2011, Ramirez said, adding that the company was working to increase production capacity to 3.25 million barrels a day by the end of the year. There are 330 drilling rigs operating in the country, he said.
“We’re not going to increase production, because that would go against the policy of OPEC, which has a global ceiling of 30 million barrels a day of oil,” Ramirez said, adding that he thought the market was oversupplied. “We’re going to maintain our firm policy to defend the price of oil. There are currently crude inventories above the 5-year average, and we think that’s dangerous for the price.”
All OPEC countries are in agreement that the price of oil should be about $100 a barrel, he said.
PDVSA is building 11 ethanol plants with Brazilian companies including Odebrecht SA to reduce imports of gasoline components, according to the minister. The company invested $940 million in sugar plants last year, Ramirez said.
“Our oil policy is nationalistic, of the people and revolutionary,” he said. “The fiscal regime allows the state to keep 94 percent of oil revenue. Nothing will change after the election.”