* 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 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
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
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."