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Venezuela blames oil woes on 'sabotage'

Thursday, November 30, 2017

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VIENNA, Austria (AFP) — Venezuela's oil industry is being sabotaged, the general newly installed as the crisis-hit country's oil minister and head of state crude giant PDVSA said Thursday.

"We have managed to arrest 20 people involved in a plan to sabotage production," Manuel Quevedo told reporters at a meeting of OPEC in Vienna.

"This sabotage plan is aimed at achieving a repeat of 2002-3 when there was an attempted coup against [Hugo] Chavez," the former president, Quevedo said.

"This time there is a whole plan to hit [oil] production."

The South American country, teetering on the brink of a full-blown default on its massive debt pile, has the world's biggest reserves of oil.

But because of a endemic corruption and a chronic lack of investment, the OPEC member's production is falling sharply.

Annual output is around 1.9 million barrels per day, having slumped more than 23 per cent between January 2016 and October this year.

Quevedo also floated the possibility that Venezuela would stop selling oil to the United States, echoing comments from President Nicolas Maduro on Tuesday.

"We want to sell oil to the American people but if their government doesn't want to help its people, then we can easily switch to other markets," Quevedo said.

Venezuela relies on oil exports for 96 percent of its hard currency earnings, and almost half its crude exports go to the United States.

Venezuela is beset with crippling shortages of food, medicine and industrial inputs, fuelling inflation of 1,000 percent, the world's highest.

PDVSA and Venezuela have been declared in selective default for failing to meet payments on certain bonds in time.

Washington sanctions prohibit US individuals and banks from buying new Venezuelan bonds, usually a requirement for any debt resolution.

However, US President Donald Trump's administration has so far stopped short of slapping sanctions on Venezuela's oil exports.

Joseph McMonigle, an analyst for Hedgeye, said not to take Venezuela's threats seriously and that a US embargo on Venezuelan oil was unlikely for now.

"Venezuela doesn't really have other buyers of their crude. Their crude is really specifically used by the refiners of the (US) Gulf coast," McMonigle told AFP.

Washington "considered it (an embargo) this summer as a way to expedite some kind of political change. That seems to be happening at its own pace," he said.

The Vienna meeting of oil producers inside and outside OPEC was expected to extend a deal curbing output until 2019, in order to reduce a global glut and lift the oil price.

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