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Maduro prepares jet for fresh Opec, Russia tour

19 Oct 2016 17:57 (+01:00 GMT)
Maduro prepares jet for fresh Opec, Russia tour

Caracas, 19 October (Argus) — Venezuelan President Nicolas Maduro says he will embark on a "lightning tour" of Opec and non-Opec oil-producing countries in coming days to consolidate support for implementing a price-strengthening accord.

The trip is intended to "definitively close an agreement to stabilize the oil market and allow a sustained and permanent rise in oil prices," he said.

The planned tour coincides with looming debt payments that Venezuela's state-owned oil company PdV is not believed capable of honoring in full, barring a debt restructuring that most bondholders have proved reluctant to concede.

Venezuela oil-based economy is forecast to shrink by 10pc in 2016, with inflation well into the triple digits.

The government has not released timing or an agenda for Maduro's upcoming trip, but a presidential palace official tells Argus that the route will cover Russia, Iran, Saudi Arabia and Qatar, among others.

Opec producers agreed late last month in Algeria to stabilize combined output at 32.5mn-33mn b/d with the details of implementation to be agreed at Opec's next formal meeting in Vienna at the end of November. Prior to that, an Opec technical committee will meet in Vienna on 28 October to thrash out those details. The following day, Opec representatives are due to meet delegations from an as yet unspecified group of non-Opec producers they hope to persuade to join them in production restraint. So far, Russia has said it will attend the second meeting.

Maduro has been at the forefront of attempts to shift Opec away from the market share-focused strategy it adopted in December 2014 and back towards production restraint to try to bolster prices. In addition to showcasing his role as an oil diplomat, the tour may be an attempt to draw in more non-Opec countries and to ensure that the differences between Saudi Arabia and Iran that were blamed for the failure to reach a production freeze deal earlier this year do not hamper the current initiative.

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