Venezuela offers India 30% discount on crude but with cryptocurrency rider

Sources said Venezuela wanted to host a conference in India where its President Nicolas Maduro would have pitched for Petro. (Bloomberg file photo)
Venezuela has offered India a 30 per cent discount on crude oil purchases. The discount, however, will be applicable only if India uses the country’s new blockchain technology-based currency Petro.

Put on a pre-sale on February 20, Petro is the world’s first state-backed cryptocurrency tied to the South American country’s oil reserves. Many see this as the safest cryptocurrency, as Venezuela has the world’s largest oil reserves of 300 billion barrels. The world’s largest oil producer, Saudi Arabia, is a distant second, with 266 billion barrels of oil reserves.

A team of experts from Venezuela’s blockchain department was in India last month, according to multiple sources. They entered into a pact with Coinsecure, a Delhi-based bitcoin trading firm, to sell Petro in India. 

Coinsecure Chief Executive Officer Mohit Kalra said Venezuela wanted to add Petro as a cryptocurrency on Coinsecure, so they can trade Petro against bitcoin and the rupee.

A senior Venezuelan official has indicated they have received response from the private sector in India. 

Kalra said the country mooted the idea of offering India at least 30 per cent discount on crude oil purchases through Petro during the discussions. “They are going to different countries and making offers. The offer that they have given to the Indian government is: you buy Petro and we will give you a 30 per cent discount on oil purchases,” Kalra said. 

According to some reports, Petro has already raised more than $3.8 billion, with interests from more than 127 countries during the pre-sale. 

Kalra said Venezuela wanted to host a conference in India where its President Nicolas Maduro would have pitched for Petro.
Based on the deal, Coinsecure is also providing them with White Label exchange solutions — all cryptocurrency players who want to trade in Venezuela will have to trade on that exchange. “That would be run by their brand name, but the back-end will be us. We plan to provide them with 10-15 cryptocurrency players,” Kalra said. 

Petro will be launched after the presidential elections in Venezuela, which is slated to take place on May 20.
“Petro will be an instrument for Venezuela’s economic stability and financial independence. We expect huge interest from countries like India,” Angel Gonzalez, vice-minister for hydrocarbons of Venezuela, told Business Standard, on the sidelines of the International Energy Forum in Delhi earlier this month. 

The cash-strapped nation, facing high inflation due to US sanctions, is planning to make Petro its official currency by 2020. But the Donald Trump administration has issued a ban on Petro. 

Oil diplomacy

  • Venezuela is pitching for Petro in different countries
  • Team of experts from Venezuela visited India in March
  • Entered a pact with Coinsecure to sell Petro in India

What is Petro

  • World’s first cryptocurrency tied to oil reserves
  • Considered safest as Venezuela has world’s largest oil reserves
  • To be launched after May 20 Venezuelan presidential elections 


And, some investors are sceptical. “Even if it is backed by oil, it is more of a centralised currency. Nobody knows how many coins will be launched or issued. It is not decentralised like bitcoin or ethereum,” a source said.

However, a senior official with the Venezuelan government said the country had a proper law governing cryptocurrencies. 
“Like any cryptocurrency, Petro is managed through digital free software using blockchain technology. All transactions will be carried out by buyers without intermediaries,” the official said.

Reports show that India’s oil imports from Venezuela averaged around 300,000 barrels per day (bpd) between November 2017 and February 2018 — a drop of about 20 per cent from the same period a year earlier and the lowest such level since 2012.

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