Venezuela sees U.S. shale boom as bonus for own oil industry

Mon Jun 16, 2014 7:34am EDT
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By Dmitry Zhdannikov

LONDON (Reuters) - Venezuela wants to increase oil supplies to the United States to regain some of the market share it lost over the past decade as Caracas sees the U.S. boom in light oil from shale as a chance to raise heavy-crude exports, the country's oil minister said. 

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 come.

"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 economy.   Continued...

Oil and Energy ministry Rafael Ramirez speaks to reporters in Caracas, January 22, 2014. REUTERS/Jorge Silva