CARACAS/HOUSTON/NEW DELHI (Reuters) – Venezuela’s state-run oil company, PDVSA, has spent at least a decade trying to build business ties and boost shipments to refineries in India, where crowds once welcomed the late socialist leader Hugo Chavez with cries of “Viva!”
Now, the ailing firm is being forced to slash sales to its crucial trade partner.
Venezuela has given up the fight for coveted market share in India because of a combination of declining crude production and heavy obligations under oil-for-loan deals with China and Russia, according to internal PDVSA data and two people familiar with the company’s strategy and operations.
Caracas needs the oil to pay debts to China and Russia, key political allies that have together lent Venezuela at least $50 billion in exchange for promised crude and fuel deliveries.
PDVSA and the Venezuelan Oil Ministry did not respond to requests for comment.
In 2013, when Venezuela exports and oil prices were high, PDVSA raked in nearly $14 billion from India, the world’s fastest growing large economy. By last year, after an oil price crash, that figure had plummeted to $2.7 billion, according to a Reuters analysis of the PDVSA data.
That means less cash income for the isolated South American economy, deepening a recession that has left many citizens skipping meals amid food shortages and soaring inflation. …