Exclusive: Venezuela's PDVSA asks partners to pick up tab as oil prices sink
By Marianna Parraga
(Reuters) - Venezuela's state-run company PDVSA has requested its partners in at least a half dozen joint ventures pay for naphtha imported to produce exportable crudes amid a punishing oil price crash, according to sources and a company letter seen by Reuters.
With at least some partners likely to balk at the request, PDVSA [PDVSA.UL] could face even bigger obstacles to import diluents and, in consequence, to keep barrels flowing from the Orinoco belt, its main producing region.
PDVSA is responsible for providing the naphtha, or light crude, needed to dilute the extra heavy oil produced at the Orinoco Belt, according to contracts signed with foreign partners including Chevron (CVX.N: Quote), Repsol (REP.MC: Quote) and ONGC.
But the company has now asked some of its foreign partners to cover the payments as of this year.
"The joint venture you currently represent will have to purchase the naphtha volumes needed to meet your production plan for 2016," reads a letter sent to companies working in the Orinoco.
Caracas-based PDVSA did not immediately respond to a request for comment.
As imported diluents are increasingly crucial to transport and market Venezuelan crudes amid declines in PDVSA's own light and medium oil output and refinery frequent stoppages, some companies might agree to the deal.
A barrel of Venezuelan Merey or DCO heavy crude needs around 30 percent to 50 percent of diluent to be exportable. A joint venture that produces 25,000 barrels per day, for example, would spend around $9 million a month on naphtha purchases at current spot prices in the U.S. Gulf Coast. Continued...