By Marianna Parraga
HOUSTON, Aug 3 (Reuters) - Venezuela's state-run PDVSA hasreceived at least six offers from foreign companies, more thanexpected, to supply it with light crudes for diluting its extraheavy oil output, people from the bidding companies toldReuters.
To keep increasing output at the vast Orinoco belt, wheremost of Venezuela's heavy crude reserves lie, PDVSA needs toguarantee a stable source of imported diluents. But buying themhas been a challenge as the company struggles with cash flowproblems that limit its ability to pay for purchases quickly.
PDVSA last month asked oil suppliers to submit offers to sellsome 70,000 barrels per day (bpd) of light crudes throughcontracts of up to five years, with deliveries starting laterthis year.
Royal Dutch Shell, Norway's Statoil, U.S.Chevron Corp, India's Reliance Industries Ltd and Essar Oil, and PetroChina Co deliveredbids, the sources said.
"A portion of the success comes from the fact that thecompany has been recently paying for imports on time," one ofthe sources said.
Most of bids include West African crudes supplies. One theoffer's terms says the crude must be between 40 and 48 APIdegrees of density and up to 1.5 percent of sulfur content.
"Shell is in the best position to win the offer as it hasstorage capacity in Bahamas for West African crudes," said thesource, who does not work for the Anglo-Dutch company.
Shell recently sold at least two 1-million-barrel cargoes ofNigerian crude to PDVSA with deliveries at the island ofCuracao, where the Venezuelan company operates a refinery and astorage terminal.
But after these spot purchases, the company is now trying toguarantee supplies of diluents for longer. The term sheet saysthat volumes to be delivered could be increased to between115,000 and 250,000 bpd in 2017 if PDVSA wants.
Venezuela started importing light crude last year withpurchases of Saharan Blend, but the contract with Algeria'sstate-run Sonatrach ended after disagreements over terms. Thisforced PDVSA to resume production of less attractive blends forexport made with imported naphtha.
It remains to be negotiated how the payment mechanism willwork for these new contracts, even though PDVSA is trying to getopen credit.
"Some companies are willing to swap light crude withVenezuelan medium or heavy grades," a second source said. "Itwould reduce the amount of money pending from each delivery." (Reporting by Marianna Parraga; Editing by Terry Wade and LisaVon Ahn)
