Venezuela's post-Chavez oil policy to focus on China, Russia
* Election on April 14 for Chavez's successor
* Maduro vows to continue late leader's "revolution"
* Venezuela boasts world's biggest oil reserves
By Daniel Wallis
CARACAS, March 15 (Reuters) - Venezuela's post-Chavez oil policy will increasingly focus on deals with China and Russia if acting President Nicolas Maduro wins an April 14 election to continue his late boss's socialist programs.
During his 14 years in power, Hugo Chavez nationalized most of the OPEC nation's oil industry with the aim of putting its crude reserves - the biggest in the world - at the service of his power base, Venezuela's poor majority.
Turning away from the United States, the traditional top buyer of Venezuelan oil, Chavez also sharply increased fuel sales to China and turned Beijing into his government's biggest source of foreign funding.
"We are not going to change one iota of the fundamental themes of President Chavez's policies," Energy Minister Rafael Ramirez said in a recent interview with a local TV station.
"We have a very important strategic relationship with China, which we're going to continue deepening and cultivating. It's the same with our cooperation with Russia ... Chavez's policies are more alive than ever, and we will push ahead with them."
Maduro, the late president's preferred successor, faces Henrique Capriles, governor of Miranda state, in the forthcoming election. The vote was called after Chavez's death last week following a two-year battle with cancer.
If Maduro wins, he can be expected to increase oil sales to political allies at the expense of the United States, while taking on more debt from those partners.
Venezuela is sending China about 430,000 barrels per day (bpd) of crude and products, up from just a few thousand bpd in 2005, in repayment of loans totaling $36 billion.
The biggest Chinese energy company, China National Petroleum Corp (CNPC), is a key part of Venezuela's efforts to tap its enormous Orinoco extra heavy crude belt, one of the planet's largest hydrocarbon reserves.
CNPC has joined with state oil company PDVSA in a joint venture in the Orinoco called Petrourica that is expected to begin producing within weeks. A PDVSA project with a Russian consortium, Petromiranda, began pumping there last year.
Russia has given high-level support to its energy companies' efforts in Venezuela. During a visit in 2010, then-Prime Minister Vladimir Putin handed Chavez a $600 million check as part of a signing fee for Russian companies' participation in the Orinoco.
And Igor Sechin, deputy prime minister and chief executive of Rosneft, Russia's top crude producer, has been a regular visitor to discuss oil deals and arms sales.
Just weeks before the late Venezuelan president won re-election last October, Sechin donned a Chavez T-shirt to pose with workers as Petromiranda pumped its first barrels.
Not put off by the nationalizations of recent years in Venezuela, U.S. major Chevron and and Spain's Repsol are also working with PDVSA in the Orinoco. They will be watching April's presidential election very closely.
Maduro, a former bus driver and union leader, has pitched his candidacy as the continuation of Chavez's "revolution." Two recent opinion polls gave him a strong lead over Capriles.
The opposition leader says that if he were to triumph on April 14, he would immediately end politically motivated oil deals signed during the Chavez years, including shipments to Cuba and an eight-year-old regional program called Petrocaribe that supplies more than a dozen smaller countries.
He would also try to streamline PDVSA, which is widely seen as bloated and inefficient, and review all its joint ventures. But both would be time-consuming challenges, and Capriles would be under enormous pressure not to disrupt the industry's operations.
Whoever wins, Venezuela is likely to import more processed fuels because of recurrent problems in its refinery network that were starkly illustrated by the Amuay disaster in August - one of the global industry's most deadly accidents in decades.
The Orinoco projects have been suffering from lack of infrastructure and delays in PDVSA's payments to service companies. Nonetheless, the government hopes they will eventually add a combined 2 million bpd of new output.
It says Venezuela is currently producing about 3 million bpd. But it stopped publishing certified data in 2011, and industry experts estimate that the figure is lower than that.
The International Energy Agency (IEA) said this week that the sector could deteriorate more if Maduro wins the election, and that Venezuela's next leader faced a "Catch 22" situation.
Current policies of diverting of oil revenue to costly social programs could not continue, it said in a report, without putting the industry and the whole economy at considerable risk.
"But neither can they be reversed without the risk of social unrest and political chaos," it added.
Asked about the report, Ramirez dismissed the IEA as a "bitter enemy of the fatherland" that had been created purely to oppose political decisions taken by OPEC.
"We have a completely normal oil industry, without any problems, in an expansion plan with strategic goals to boost production to 4 million bpd by 2014. We invested $22 billion last year and plan to invest $25 billion this year."
The Chavez-era preferential deals with foreign allies meant PDVSA was not paid directly for almost half the crude it pumped in 2011. Meanwhile, the company has continued pressuring its joint venture collaborators to find funds to spur output.
As long as the political situation remains uncertain, Barclays Capital said, PDVSA's partners have seemed unwilling to shell out for new areas to be developed, mainly in the Orinoco.
"Most are maintaining their long-term plans in the country, given the great reserves, but are in wait-and-see mode."
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