Venezuela turns to India for oil exports as US sanctions bite

HOUSTON/MEXICO CITY/MOSCOW, Feb 13 (Reuters): Venezuelan oil company PDVSA is looking to double exports to India as US sanctions hobble deliveries to the United States and Europe.

The United States (US) and most Western countries have recognised opposition leader Juan Guaido as Venezuela's head of state, but President Nicolas Maduro retains the backing of Russia and China as well as control of state institutions including the military.

The country's oil 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, Venezuela is turning its focus to buyers paying in cash, especially in India, its second-largest customer after the United States.

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

Venezuela has sent its oil minister, Manuel Quevedo, to India to convince refiners, including Reliance Industries Ltd and Nayara Energy Ltd, to double their oil purchases.

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

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

Two supertankers, Baghdad and Folegandros I, left from Venezuela's Jose terminal late on Monday carrying cargoes destined for Indian ports.

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

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

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

Barclays bank 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 bank wrote. "It seems unlikely that all production can, in short order, go to other markets."

The US sanctions are designed to undercut financial support for President Maduro, cutting his access to oil revenue that has helped his government remain in power.

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

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

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

PDVSA's debt to Rosneft 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 Reuters showed.