CARACAS, Oct 22 (Reuters) - Venezuela’s state-run oil company Petroleos de Venezuela expects to earn just $35 per barrel of oil exports next year, down from the $60 it projected for 2020, according to a copy of the company’s 2021 budget seen by Reuters on Thursday.
The drop in expected pricing, in line with a decline in crude prices worldwide this year due to the coronavirus pandemic and slowdown in economic activity comes as the cash-strapped company, contends with a drop in exports due to U.S. sanctions, and as hyperinflation complicates operating in Venezuela.
The projection is for a basket of Venezuelan crudes, made up mostly of heavy crudes like its flagship Merey grade and some refined products.
Due to the sanctions, PDVSA has been forced to offer its crude at steep discounts to compensate for the risks of transacting with the company.
Venezuela’s flagship Merey grade crude has averaged just $27.93 per barrel so far in 2020, down from $56.63 in 2019, according to OPEC’s latest report. Those figures refer to a Merey price derived from formula indexed to the prices of other crudes and products, not the amount PDVSA received for sales.
PDVSA, which did not respond to a request for further comment, said it expected to produce some 1.8 million barrels per day (bpd) of crude next year, more than four times the 397,000 bpd it told OPEC it produced in September. It did not explain how it planned to boost output so dramatically.
The company said it expected inflation to accelerate to 174,676% by December 2021, adding that the Finance Ministry did not provide it with its own projection. That was up from 1,813% interannual inflation recorded in September, according to Venezuela’s central bank. (Reporting by Mayela Armas in Caracas and Luc Cohen in New York; Editing by David Gregorio)
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