VENEZUELA'S OIL DOWN TO 1.17 MBD

REUTERS - The head of Russian oil company Rosneft (ROSN.MM), Igor Sechin, flew to Caracas this week to meet Venezuelan President Nicolas Maduro and complain over delayed oil shipments designed to repay loans, two sources briefed on the conversation said on Saturday.

The visit, which was not publicly disclosed, is one of the clearest signs of strain between crisis-stricken Venezuela and its key financier Russia.

Over the last few years, Moscow has become Venezuela’s lender of last resort, with the Russian government and Rosneft handing Venezuela at least $17 billion in loans and credit lines since 2006, according to Reuters calculations.

State oil company PDVSA is repaying almost all of those debts with oil, but a meltdown in its oil industry has left it struggling to fulfill obligations.

Sechin and a large delegation of executives met with officials at PDVSA in a Caracas hotel this week. Sechin also met with Venezuela’s leftist leader Maduro, and chided him overoil-for-loans shipments that are behind schedule.

"He brought information showing that they were meeting obligations with China but not with them," said one source with knowledge of the talks.

"They're running around in PDVSA because of this," added the source, asking to remain anonymous because he was not authorized to speak to media.

The country's oil production has fallen to just 1.17 million barrels-per-day, a 37 percent drop in the last year, according to reports from secondary sources to OPEC, leaving itstruggling to ship Russian entities the roughly 380,000 bpd it has agreed to send, according to PDVSA documents seen by Reuters.

The closing of a dock at Venezuela's main oil export port, through which the vast majority of shipments to Rosneft transit, has delayed millions of barrels in crude since August.

Sechin handed Maduro graphics about oil shipments to Russian entities compared with China, the two sources said.

Top financier China, which has ploughed more than $50 billion into Venezuela, also gets reimbursed in oil.

According to Reuters calculations based on PDVSA data, the Caracas-based company delivered around 463,500 bpd to Chinese firms between January and August, a roughly 60 percent compliance rate. That compares with around 176,680 bpd to Russian entities, or a 40 percent compliance rate.

Rosneft and PDVSA did not immediately respond to a request for comment.

One of the sources with knowledge of Sechin's visit, as well as two separate sources, said a Chinese delegation was also in Caracas this week.

CHINA, RUSSIA VIE FOR VENEZUELA OIL

As of early 2017, PDVSA began to fall months behind on shipments of crude and fuel under the loan deals with China and Russia due to problems in its oil industry, home to the world's biggest crude reserves, according to documents reviewed by Reuters.

The problems include operational mishaps, such as refining outages and delayed cleaning of tanker hulls, and financial disputes with service providers owed money by PDVSA.

This April, Rosneft and PDVSA signed a refinancing agreement designed to allow the Venezuelan company to catch up on delayed loan payments by delivering more crude to Rosneft. Under the refinancing, PDVSA has to provide Rosneft with some 380,000 bpd, up from around 310,000 bpd, according to Reuters calculations.

The Russian company was planning on using Jose's South dock to pick up the cargoes, before an August tanker collision delayed exports to Rosneft. PDVSA reopened the dock earlier this month, sources said.

China agreed to use ship-to-ship (STS) operations to avoid Venezuela's clogged ports. However, the clients to whom Rosneft sends Venezuelan crude, Russian-backed Indian refiner Nayara Energy and Indian conglomerate Reliance, did not agree to STS transfers, likely heightening delays.

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Earlier:

2018, November, 23, 12:05:00 VENEZUELA'S ECONOMY DOWN 17% REUTERS - Preliminary data compiled by Venezuela’s central bank shows the economy shrank by 16.6 percent in 2017 compared with the year before, two sources familiar with the matter said on Thursday, the country’s sharpest decline on record.

2018, September, 17, 15:00:00 VENEZUELA - CHINA COOPERATION REUTERS - Venezuela gave China another stake in the OPEC nation’s oil industry and signed several other deals in the energy sector, but Beijing made no mention of new funds for Caracas during President Nicolas Maduro’s visit to his key financier on Friday.

2018, August, 22, 12:30:00 CONOCOPHILLIPS - PDVSA: $2 BLN OGJ - the ICC tribunal awarded ConocoPhillips $2.04 billion after PDVSA failed to uphold its contractual commitments. The award applies to contracts ConocoPhillips had with PDVSA and two of its subsidiaries in the Hamaca and Petrozuata heavy crude oil projects expropriated by the government and to fiscal changes enacted before the nationalizations in 2007.

2018, July, 25, 09:15:00 VENEZUELA'S ECONOMIC COLLAPSE IMF - On Venezuela, it is difficult to discuss because it is in a state of economic collapse. We have not engaged with them in over a decade on their economic policies.

2018, June, 25, 12:15:00 VENEZUELA CAN UP BY 1 MBD REUTERS - Venezuela has the ability to boost crude output by 1 million barrels per day (bpd) by end of the year in its bid to recover lost production, but the oil minister also said on Friday this goal would be “a challenge” for state oil firm PDVSA.

2018, June, 22, 13:10:00 THE LARGEST VENEZUELA'S OIL U.S. EIA - Venezuela holds the largest oil reserves in the world, in large part because of the heavy oil reserves in the Orinoco Oil Basin. In addition to oil reserves, Venezuela has sizeable natural gas reserves, although the development of natural gas lags significantly behind that of oil. However, in the wake of political and economic instability in the country, crude oil production has dramatically decreased, reaching a multi-decades low in mid-2018.

2018, June, 20, 12:35:00 VENEZUELA'S OIL PRODUCTION DOWN PLATTS - Venezuela's crude output averaged 1.36 million b/d in May, down from 1.41 million b/d in April, and 1.9 million b/d in May 2017, according to S&P Global Platts. The International Energy Agency said it could fall to 800,000 b/d or even lower next year.