Venezuela's PDVSA got at least 6 light crude supply offers

By Marianna Parraga

HOUSTON, Aug 3 (Reuters) - Venezuela's state-run PDVSA has received at least six offers from foreign companies, more than expected, to supply it with light crudes for diluting its extra heavy oil output, people from the bidding companies told Reuters.

To keep increasing output at the vast Orinoco belt, where most of Venezuela's heavy crude reserves lie, PDVSA needs to guarantee a stable source of imported diluents. But buying them has been a challenge as the company struggles with cash flow problems that limit its ability to pay for purchases quickly.

PDVSA last month asked oil suppliers to submit offers to sell some 70,000 barrels per day (bpd) of light crudes through contracts of up to five years, with deliveries starting later this year.

Royal Dutch Shell (Xetra: R6C1.DE - news) , Norway's Statoil (Xetra: 675213 - news) , U.S. Chevron Corp, India's Reliance Industries Ltd (BSE: RELIANCE.BO - news) and Essar Oil (BSE: ESSAROIL.BO - news) , and PetroChina Co delivered bids, the sources said.

"A portion of the success comes from the fact that the company has been recently paying for imports on time," one of the sources said.

Most of bids include West African crudes supplies. One the offer's terms says the crude must be between 40 and 48 API degrees of density and up to 1.5 percent of sulfur content.

"Shell (LSE: RDSB.L - news) is in the best position to win the offer as it has storage capacity in Bahamas for West African crudes," said the source, who does not work for the Anglo-Dutch company.

Shell recently sold at least two 1-million-barrel cargoes of Nigerian crude to PDVSA with deliveries at the island of Curacao, where the Venezuelan company operates a refinery and a storage terminal.

But after these spot purchases, the company is now trying to guarantee supplies of diluents for longer. The term sheet says that volumes to be delivered could be increased to between 115,000 and 250,000 bpd in 2017 if PDVSA wants.

Venezuela started importing light crude last year with purchases of Saharan Blend, but the contract with Algeria's state-run Sonatrach ended after disagreements over terms. This forced PDVSA to resume production of less attractive blends for export made with imported naphtha.

It remains to be negotiated how the payment mechanism will work for these new contracts, even though PDVSA is trying to get open credit.

"Some companies are willing to swap light crude with Venezuelan medium or heavy grades," a second source said. "It would reduce the amount of money pending from each delivery." (Reporting by Marianna Parraga; Editing by Terry Wade and Lisa Von Ahn)