<article><p class="lead">Venezuela is quietly lobbying key Opec and non-Opec oil producers to hold a new meeting as soon as possible to discuss how a current pact to coordinate output cuts can be strengthened, presidential palace and energy ministry officials said.</p><p>If Venezuela's low-key diplomatic outreach to oil producers such as Russia, Iran and Saudi Arabia concludes there is support, Venezuelan president Nicolas Maduro would seek a joint public statement calling for an "extraordinary meeting" as soon as possible, the officials added.</p><p>The Maduro government's tentative agenda for such a meeting would address what Caracas sees as the need for "more production discipline" by Opec producers including Libya, Nigeria, Iran and Iraq in a bid to strengthen oil prices. </p><p>Caracas also hopes to expand the current coordinated output reduction agreement by inviting more non-Opec producers to join the agreement, the officials said.</p><p>The government's attempt to marshal support for another meeting reflects growing worries in Caracas that state-owned PdV could default within five months if oil prices remain stuck below $50/bl in second half 2017. Nearly all of Venezuela's hard currency revenue comes from oil exports.</p><p>Venezuela's scheduled bond debt maturities from August-December total over $4.9bn, including over $3.267bn of PdV bond debt.</p><p>Scheduled PdV and sovereign bond maturities in October and November alone total more than $3.63bn, including $2.97bn in PdV debt. The latter features $2.24bn due within a seven-day window from 27 October to 2 November.</p><p>The central bank's foreign currency reserves including cash and gold holdings currently total around $10bn.</p><p>Maduro and PdV chief executive Eulogio Del Pino optimistically predicted in January 2017 that the Opec/non-Opec agreement to cut output for six months would raise oil prices to over $60/bl by the second half of this year. At the end of May, Opec and non-Opec producers agreed to extend their 1.72mn b/d of production cuts for a further nine months from July, beyond the original six-month agreement. Prices have failed to respond amid rising production from Nigeria and Libya, which are exempt from the deal to cut output.</p><p>Venezuela's year-to-date 2017 average export price as of 14 July was $43.53/bl, only $8.38/bl higher than its 2016 full-year average price of $35.15/bl and $1.12/bl below the 2015 price of $44.65/bl, energy ministry data shows. </p><p>Venezuela's current year-to-date average price remains about $45/bl below the average 2014 export price of over $88/bl. </p><p>At the same time, Opec's July monthly market report shows that Venezuela's production contracted significantly in first half 2017.</p><p>Opec reported based on secondary sources that Venezuela's crude output in June averaged 1.938mn b/d compared with 2.159mn b/d at end-2016, a decline of 221,000 b/d or 11.4pc during the six-month period.</p><p>PdV said yesterday that the Opec secondary sourced output number for June represents 136pc compliance with its share of production cuts.</p><p>Venezuelan official crude output figures reported by the energy ministry to Opec indicate a 217,000 b/d decline, from 2.373mn b/d at end-2016 to 2.156mn b/d in June 2017.</p><p>On an annualized basis, the official 221,000 b/d output decline represents about $3.5bn in lost oil export revenues based on PdV's year-to-date average export price of $43.53/bl as of 14 July.</p><p>Venezuela's default potential has also spiked amid an increasingly unstable political outlook as the Maduro government insists on establishing a constituent assembly that critics including long-serving attorney general Luis Ortega Diaz decry as illegal and unconstitutional.</p><p>The constituent assembly will be elected on 30 July in closed elections rigged to favor the ruling United Socialist Party (PSUV), critics argue. The government's political foes have scheduled a plebiscite on 16 July in an effort to demonstrate there is overwhelming opposition to the assembly.</p></article>
