Rafael Ramirez, economy vice president and oil minister, also said
Venezuela was working on borrowing $4 billion from China guaranteed
by oil sales.
But Venezuela's total debt to Beijing stood at below $20 billion, he
said, much lower than market estimates of over $40 billion.
Venezuela has gone from being the top U.S. supplier at the end of
the 1990s to No.4 behind Canada, Saudi Arabia and Mexico as its own
output stagnated, U.S. production rose thanks to shale and relations
between Washington and Caracas hit new lows.
But Ramirez said his country, the world's largest holder of oil
reserves on the back of heavy-oil discoveries in the past decade,
would remain a major supplier to the United States in decades to
"We always expect to maintain our current exports to the U.S. and
even increase them. As a matter of fact, the shale oil has been a
great opportunity for us," Ramirez said in an interview after he met
investors and bankers in London last week.
"Now the U.S. has a huge amount of light oil that has to be blended
with extra heavy crude - unless they decide to change all the
refining parts they have on the East Coast. And it is clear that
won't be possible in the short term," he said.
Venezuelan oil output has been stagnant in recent years due to
severe pressure on state oil company PDVSA to prop up the socialist
With inflation at 60 percent, President Nicolas Maduro, heir to the
late socialist leader Hugo Chavez, is being forced to launch
economic reforms and weaken currency controls while facing lower
With debt costs rising, the country is looking to extend maturities
on its borrowings.
Ramirez promised new foreign exchange and fuel market reforms to the
investors, including holders of Venezuelan bonds, who are keenly
watching PDVSA's supplies and debt profile as the biggest borrower
in the country.
PDVSA in recent years has diversified oil supplies to Asia, shipping
640,000 barrels per day to China and 400,000 bpd to India, compared
to 1.2 million bpd to the United States, Ramirez said.
"For 100 years our sole market was the American market," Ramirez
said. "People ask 'why China, why India?' Like (former U.S.
President Bill) Clinton used to say - it's economics".
[to top of second column]
China has provided tens of billions of dollars in credits to
Venezuela, guaranteed by oil supplies, but Ramirez said the amount
of loans was much lower than the market thought.
He said China had provided $41 billion so far but some $24 billion
had been repaid. That leaves the outstanding debt at around $17
Ramirez said the country was looking to raise an extra $4 billion
from China before the year-end and described relations with Beijing
Venezuela hopes to refine larger volumes of its heavy oil at
refineries in China and India as those countries are building
sophisticated plants. Ramirez also said PDVSA had no plan to offload
its refining assets in the United States.
He said he believed his country would ultimately reform its heavily
subsidized fuel market, although this would take years.
"In the past you could not even raise this issue ... Based on our
estimates, there is a consensus in the country and people realize we
cannot continue losing $12 billion a year (due to subsidies)."
He did not believe the U.S. shale boom would weaken OPEC even though
the oil-producing cartel faced unrest and production problems.
"Shale oil production will have a peak. There is no way the shale
oil could destroy OPEC," he said.
(Editing by Dale Hudson)
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