Venezuela Supplies 300,000 Barrels of Subsidized Oil

By Matthew Walter

Oct. 16 (Bloomberg) -- Venezuela, the biggest oil exporter in the Americas, is currently supplying 300,000 barrels of oil a day at subsidized prices to poor countries in South America and the Caribbean, President Hugo Chavez said.

The president said Venezuela will continue to press the Organization of Petroleum Exporting Countries to provide subsidized oil to the 50 poorest countries in the world, most of which are in Africa. There isn't yet a ``consensus'' on the issue within the oil-producing cartel, Chavez said late yesterday in comments broadcast by state television.

Chavez said the Venezuelan economy won't collapse even as oil prices decline. Crude oil traded below $73 a barrel today after a global stock plunge heightened concern bank bailouts won't prevent a recession.

``Many want the oil price to continue to drop to see us fall, but Venezuela isn't going to go under,'' he said, according to the state news wire. ``Although no country can say that it won't be affected by this economic disorder, the threat that some sectors want this to create in this country isn't going to materialize.''

Venezuela intends to reduce its dependence on trade with the U.S. by increasing oil shipments to China, he said. The South American country will ``soon'' be sending 400,000 barrels a day to China, with the goal of increasing that to 1 million barrels a day ``in the coming years,'' he said.

Oil Output

Venezuelan oil output was unchanged in September from the previous month at 2.36 million barrels a day, according to Bloomberg estimates.

Chavez said OPEC should also consider Venezuela's proposal to create a development bank. If the initiative fails, he said he'll pursue the option with oil-producing nations such as Russia and Iran.

The socialist leader said his country has benefited from economic and military agreements with Russia, which has sold Venezuela billions of dollars of weapons.

``I think the rebirth of Russia is positive for the world,'' Chavez said. ``If it weren't for Russia, and the rebirth of Russia, Venezuela would be completely disarmed.''

To contact the reporter on this story: Matthew Walter in Caracas at mwalter4@bloomberg.net.