* Bond issue planned for later in October
* PDVSA sees oil output at above 3 million bpd (Adds debt to service providers)
By Marianna Parraga
MARACAIBO, Venezuela, Oct 13 (Reuters) - Venezuela’s state oil company PDVSA said on Tuesday it was planning an estimated $3 billion bond issue for the second half of October.
The dollar-denominated issue had been widely expected, both to repay debts and as part of President Hugo Chavez’s government’s efforts to narrow the gap between the official and parallel exchange rates for the bolivar currency VEFFIX=.
PDVSA Vice President Eulogio del Pino told reporters in the western city of Maracaibo that the issue would be in Eurobonds, with a maturity of two to three years.
“They are bonds with an international rating,” he said. “They have a fairly short maturity, we are talking of two to three years ... with a return in dollars.”
Faced with falling crude revenues, PDVSA issued $3 billion in 2011 “petrobonds” in July, mainly to pay debts to service companies. The government also raised $5 billion with another issue of 2019 and 2024 paper last week. For details, see[ID:nN06414223]
Russell Dallen, head trader of BBO Financial Services in Caracas, said the new PDVSA issue should be as attractive for investors, as the other two.
“The indications are that they are willing to put it out there cheaply,” he said.
Last week’s issue was “a gift” for buyers, Dallen said.
“Simply put, there is no other place to go in the international credit markets to find a similar credit profile and get those kind of 13 percent yields,” he said.
PDVSA’s Del Pino also said PDVSA had recently repurchased some debt, though only “small amounts” less in total than $1 billion.
“Yes, we have bonds undervalued at times in the market, and we have taken the opportunity to buy bonds at a very good price for us,” he explained.
He said part of the proceeds of this month’s bond issue would be used to pay service providers in the exploitation and production sectors, who are owed some $1.4 billion. Chavez recently said PDVSA would pay $5 billion to service companies in the fourth quarter as part of the country’s economic stimulus measures.
The PDVSA official said Venezuela’s national crude production had averaged 3.04 million barrels per day so far in 2009, and was projected at 3.08-3.11 million bpd in 2010.
The 2009 figure is below the 3.17 million bpd PDVSA and the government had projected for the year, but way above estimates of nearer 2.1 million by both the U.S. Energy Information Administration and the International Energy Agency.
Del Pino said PDVSA planned to invest “no less than” $16 billion in 2010, compared to $15 billion this year. (Reporting by Marianna Parraga and Caracas bureau reporters; Writing by Andrew Cawthorne)