Rafael Ramirez Speech in Puerto La Cruz

(Energy Analytics Institute, Piero Stewart, 4.Oct.2013) – Venezuela’s Oil Minister President Rafael Ramirez spoke with journalist in Puerto La Cruz, Venezuela.

What follows are excerpts from the discussion.

Rafael Ramirez on the economic sector:

Ramirez: We have bonds that we are using to bring in food stuffs to guarantee supply to the Venezuelan people.

We will not use our dollars to create a parallel market. However, there are actors that are misusing these dollars to feed the speculative market.

We have to neutralize the elements that are conspiring against our economy in the parallel market that are creating distortions in Venezuela and of course affecting the people.

We will use our existing $600 million bonds to buy foodstuffs from Colombia. We will conduct whatever operation that is necessary to reestablish equilibrium in the area (of food distribution).

There are people in the private sector that have all the responsibility for everything that is happening to the Venezuelan economy. We will not use our dollars to create a parallel market, it would be a foolish move, right?

However, there are actors that are directing the use of the dollars that PDVSA is generating to supply this speculative sector. This is something that cannot be done by a maid or a student but economic actors that control large bolivar volumes and that continue to attack our economy. The actors working against the economy are different from those in the government.

On the petroleum sector:

Ramirez: We still need to finish work on the ICO pipeline system which will allow us to carry all of our gas from Eastern Venezuelan to Western Venezuela. The Northern Monagas region has become a great gas producer with 400 MMcf/d of gas.

The Faja did not have infrastructure to transport gas since the old associations said the Faja contained bitumen. Now that we are finding sufficient gas in the Faja coupled with gas from offshore, we will have sufficient gas to cover domestic demand as well as supply the Colombian market.

On gasoline/component imports from the U.S.:

Ramirez: We continue to import components to produce gasoline. It is a complex situation that we continue to evaluate.

We have taken control of the JV we had with Eni and we expanding the JV to produce the MTBE that we need. We continue to move forward with ethanol projects with the goal to mix 10% ethanol with our gasoline.

The Venezuelan driver consumes primarily 95 octane gasoline since the price between 95 and 91 octanes is the same, and under the perception that 95 octane is better for the automobiles.

On the Faja; companies leaving the Faja:

Ramirez: OPIC and PetroCanada were never in the Faja. Lukoil’s decision to leave Junin 6 was taken by the Russian consortium. It is a problem between the Russians. Rosneft President Igor Sechin has said his company wants to have a controlling or operating company in the consortium. We think it is a good decision since we would have one principal Russian voice in the JV.

PDVSA has to have a majority/controlling stake in the Faja projects because the transnational companies have their international strategies while PDVSA has a national strategy.

We have different options/offers to explore regarding Petronas’ 11% stake in Carabobo 1.

We are producing 3 MMb/d and working hard to increase production capacity.

The internal market in Venezuela is consuming 700 Mb/d, up due to increased demand for diesel. Venezuela is exporting 2.4 MMb/d, we want to send more gas to our electric sector which will allow them to switch from diesel to gas.

We plan to export at least 150 MMcf/d of gas to Colombia in July/June of 2014.

We are looking for alternatives so that early production materializes. Early production should approach 50,000 b/d from seven projects in 2013.

Junin 1: Sinopec agreement signed and companies working to constitute the JV and achieve production of 200,000 b/d. Junin 10: CNPC has agreed to participate in the JV and in the upgrader expansion with PDVSA. PDVSA has increased production at the project by 15,000 b/d in one year. We plan to expand the existing upgrader.

On the Abreu e Lima refinery project in Brazil:

We are still in discussions with Petrobras regarding the Abreu e Lima refinery project but this is a topic we will not discuss over a microphone. However, we want to be in the project.


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