Venezuela opts for oil contracts in euros

Venezuela opts for oil contracts in euros

Venezuelan state oil giant PDVSA has decided to sign some oil contracts in euros in the face of a plummeting dollar, local media reported, citing officials.

“There are some contracts in euros, contracts for crude, products and spot markets in euros. This is a subject which we are working on,” said energy minister and Petroleos de Venezuela (PDVSA) chief, Rafael Ramirez, in an interview with the journal El Universal published Friday.

It remained unclear which oil sales would require payment in euros.

Venezuela, Latin America’s leading petroleum producer, has previously backed Iran’s proposals for OPEC to abandon the dollar and use the euro for oil pricing. But the Organisation of Petroleum Exporting Countries has rejected the idea, at least in the short-term.

The head of the journal Petroleum World, Elio Ohep, said the shift to euros was “good business” for Venezuela.

“PDVSA always had an interest to negotiate in dollars because the company had refineries in the United States and needed cash but currently with the euro rising, it is taking in more dollars and (Venezuelan) bolivars,” he said.

The dollar hit new lows this week against the euro and yen, with the euro at 1.5669 dollars at 21000 GMT on Friday.

Venezuela produces 3.3 million barrels of oil a day, according to official figures, and 2.4 million according to the International Energy Agency. Half of its production is sold to the United States market.

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