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Venezuela turns to India for oil exports as U.S. sanctions bite


By Eaton, Parraga and Gorodyankin

HOUSTON/MEXICO CITY/(Reuters) - Venezuelan company is looking to double exports to as U.S. sanctions hobble deliveries to the and

The and most Western countries have recognized as Venezuela's head of state, but retains the backing of and as well as control of state institutions including the military.

The country's exports since the sanctions took effect on Jan. 28 have fallen to 1.15 million barrels per day (bpd) of crude and refined products, Refinitiv Eikon data showed, down from about 1.4 million bpd.

In response, is turning its focus to buyers paying in cash, especially in India, its second-largest customer after the

Before the sanctions, shipped over 500,000 bpd to the United States, its largest cash market, followed by at above 300,000 bpd and then

has sent its minister, Manuel Quevedo, to to convince refiners, including and Nayara Energy Ltd, to double their

"We are selling more than 300,000" bpd to Indian buyers, Quevedo said on Monday in "We want to double that amount."

is open to barter arrangements with India using oil as payment, he said, but did elaborate.

Two supertankers, and I, left from late on Monday carrying cargoes destined for Indian ports.

Refinitiv Eikon ship tracking data showed several other tankers carrying Venezuelan crude or fuel towards


Finding buyers in may be difficult, however, analysts said, as uses its political and financial clout to pressure countries to stay clear of dealing with

It remains unclear how cash sales would be effected without using the U.S. or European systems after April 28, a deadline set by the

addressed the issue in a special report on Tuesday.

"Considering all the difficulties that Venezuela faces in delivering oil to other markets and the legal, reputational and financial risks confronting traders or counterparties that do business with it under the current conditions," the wrote. "It seems unlikely that all production can, in short order, go to other markets."

The U.S. sanctions are designed to undercut financial support for Maduro, cutting his access to that has helped his government remain in power.

U.S. bank said in a note on Wednesday that because of the sanctions there was "limited ability for non-U.S. refiners to take on Venezuela's very heavy crude" beyond India and


India's Reliance is among PDVSA's main cash customers, while Nayara receives Venezuelan oil via its stakeholder, Russia's

provided PDVSA with around $6.5 billion in loans from 2014 to 2017, to be repaid in oil and

PDVSA's debt to stood at $2.3 billion at the end of last year, Rosneft said last week.

It was supplying Rosneft with an average of 137,000 bpd of heavy crude and refined products before the latest sanctions, PDVSA trade data seen by showed.

Under its pre-payment deal with Rosneft, PDVSA deliveries about half that crude to Nayara, which controls Vadinar, India's second largest refinery, and sends the rest to Europe, including to Rosneft refining assets in

The last cargo containing for Rosneft left Venezuela for on Jan. 30-31, containing around 1 million barrels, according to a trading source close to PDVSA and the Russian firm.

"PDVSA supplies to Rosneft or its subsidiaries in India under deals clinched before the sanctions are not falling under the sanctions," said Natalia Abtseshko, group at firm

Nayara received 69,200 bpd of Venezuelan crude last year, down from 87,700 bpd in 2017, Refinitiv Eikon data shows.

When cargoes started to arrive irregularly last year, Rosneft flew to to complain to Maduro, sources have said.

PDVSA and Rosneft did not respond to requests for comment.

A of the (OFAC), part of the Treasury Department, declined to comment on whether Rosneft would be able to continue to receive PDVSA oil under their

About 9 million barrels were stuck in tankers waiting for payment or discharge instructions last week, Refinitiv Eikon data showed.

Most are anchored off the as Venezuelan and self-proclaimed moves to set up escrow accounts to receive proceeds.

(Reporting by in HOUSTON, Parraga in MEXICO CITY and Gorodyankin in MOSCOW; additional reporting by in NEW DELHI; Olga Yagova, Oksana Kobzeva, Olesya Astakhova, Vladimir Soldatkin and Natalia Chumakova in MOSCOW; Tim Gardner and David Gaffen; in WASHINGTON; Henning Gloystein in SINGAPORE; editing by and Jason Neely)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 15:16 IST