Venezuelan oil minister Nelson Martinez said Thursday he does not see any threats to the country's oil projects despite recent political turmoil.
"Not at all, the oil industry in Venezuela is operating as normal," he said, when asked if crude production in the country is at risk.
He also played down concerns over technical issues on the Venezuela's heavy oil upgraders.
Earlier this month, technical reports indicated that Venezuela and its joint venture partners in the Orinoco Belt could no longer blend its diluted heavy crude oil (DCO) at levels much above 16 degrees API due to problems with upgraders.
"We have four different upgraders in Venezuela, sometimes we do some revamps," he said.
In particular, Venezuela's Petro San Felix (PSF) upgrader, which was operating at 60% of its capacity recently, is about to "go up to 100,000 b/d-120,000 b/d," while currently it operates at a 80,000 b/d capacity level, he said, without elaborating further on the issue.
Located in northern Anzoategui state, PSF is a state-owned company that produces DCO for export from extra-heavy Orinoco Belt crude blended with light crude.
Originally PSF was a joint venture between the then Conoco (51%) and Venezuela's state-owned PDVSA (49%) to produce synthetic crude with an API of 26 degrees. Conoco's assets in Venezuela were expropriated in 2007.
Martinez did not comment on the situation with the three other upgraders and whether the technical issues were posing difficulties in marketing Venezuela's crude.
Martinez was speaking before OPEC ministers met in Vienna to review an oil output cut deal aimed at hastening the market's rebalancing.
Venezuela produced 1.95 million b/d in April, according to the latest S&P Global Platts OPEC survey, below its allocation under the deal of 1.97 million b/d.
That is down from 2.31 million b/d a year ago, as analysts have said the country's economic crisis and years of fiscal mismanagement in state-owned PDVSA has caused the output decline.
However, Venezuela has consistently self-reported higher production to OPEC, pegging its April output at 2.19 million b/d.
COOPERATION WITH ROSNEFT
Martinez also said Venezuela was working to resolve issues over PDVSA's assignment of a 49.9% stake in its US refinery company Citgo as collateral to Russia's Rosneft as part of a $1.5 billion loan, which has raised concerns among US lawmakers.
It used the other 50.1% share of Citgo as collateral in an earlier $2.8 billion bond swap deal.
"Citgo's stake was used as a [collateral to] a loan by Rosneft but it does not mean that Rosneft will receive this stake," Martinez said.
"We are under way to resolve [the issue]," he added, declining to give details "because this is a part of the negotiations we're taking."
A US Senate bill introduced earlier this month urges President Donald Trump to prevent Rosneft from gaining control of Citgo in the event PDVSA defaults on its loans.
The bill says the growing economic crisis in Venezuela "raises the probability" that the Venezuelan government and PDVSA will default on their international debts, possibly allowing Rosneft to take control of Citgo's three refineries, 48 terminals and network of pipelines.
Despite the controversy in the US that could derail the deal, Martinez said Venezuela hopes "to maintain good relationships" with Rosneft, which takes part in a number of joint projects in the country.
Besides oil ventures, Rosneft is also interested in taking part in gas projects, he said.
At the same time, Venezuela's authorities are yet to receive an answer from Rosneft on a proposed purchase of a 10% stake in the Petropiar joint venture in the Orinoco Belt.
The JV, which is 60% owned by PDVSA and 40% by US major Chevron, is designed to produce 190,000 b/d of 26 degree API synthetic crude oil, but is only producing 180,000 b/d of DCO with an API of 16 degrees.
Asked if Rosneft has already made clear its intention to purchase the stake, Martinez said: "No."
The offer is part of a larger package offered to Rosneft as PDVSA seeks to raise money to pay suppliers and bond holders, according to sources.
