HOUSTON (Reuters) - Venezuela is considering producing fuels from foreign crude oil for the first time, according to planning documents seen by Reuters, as the country struggles to meet its obligations despite having the world’s largest crude reserves.

FILE PHOTO: A general view of the Amuay refinery complex which belongs to the Venezuelan state oil company PDVSA in Punto Fijo, Venezuela November 17, 2016. REUTERS/Carlos Garcia Rawlins/File Photo

State-run oil company PDVSA may process up to 57,000 barrels per day (bpd) of foreign crude in June at the country’s largest refinery, according to a monthly refining plan which was viewed by Reuters on Wednesday. The output would help fulfill fuel contracts for Russian, Chinese and other customers and reduce purchases of fuels for domestic use, the documents showed.

PDVSA did not respond to a request for comment.

PDVSA has been falling short on fuel exports in recent years due to a lack of lighter crudes to refine, a shortage of spare parts, poor maintenance, and management upheaval at its domestic refining network. PDVSA also lost access in May to inventories produced in Curacao, where it operates the Isla refinery.

Declining revenue resulting from falling oil production and exports have driven Venezuela into a severe economic recession, and led to a loss of skilled workers, and widespread food and medicine shortages. Some energy experts say further production declines could contribute to a global crude shortfall.

U.S.-based ConocoPhillips COP.N last month seized some of PDVSA's assets in the Caribbean seeking payment for a $2 billion arbitration award, reducing PDVSA's ability to deliver fuel and crude exports to Asian customers and regional allies.

Venezuela, an OPEC member country, has never before imported foreign crude oil for its domestic refineries, although it has blended African, Russian and U.S. crudes with its extra heavy oil to make exportable products. It also has purchased foreign oil for Caribbean refineries and to supply allies, including Cuba.

DECADES-LOW OUTPUT

In May, the country produced 1.53 million bpd of crude, according to numbers delivered to OPEC, but other sources put the figure at 1.39 million bpd, which would be the lowest monthly output since the 1950s.

If PDVSA chooses to refine the imported crude, one of two scenarios outlined in documents showing its production, supply and contract requirements, the imports would alleviate a lack of domestic lighter crudes needed at the refineries, which have been running at about a third of their capacity. It could use Russian, Iranian or Angolan crudes, according to the documents.

“The larger processing of crude would increase our fuel availability. It would also decrease the requirements (to import) of vacuum gasoil and diesel,” said one of the documents prepared in May.

The alternative, not using imported crude, would mean the shortfall in fulfilling contracts to supply fuel would increase, the document showed. Most of these fuel contracts cover oil-for-loans with Chinese and Russian companies.

As of June 13, two tankers holding Russian Urals crude were waiting in Venezuelan waters to discharge, according to Thomson Reuters vessel tracking data. One of the two, the Advantage Atom, is waiting near its Amuay refinery.

Venezuela in January started routine imports of Urals crude to supply Cuban refineries, spending nearly $440 million on the purchases for its Caribbean ally.

The Urals cargoes had been discharged in Curacao for transfer to Cuba, but since Conoco began seizing PDVSA’s Caribbean assets, tankers arriving from Russia have been diverted to Venezuela’s Paraguana Refining Center (CRP), which includes its Amuay and Cardon refineries.

NOT ENOUGH FOR ALL

To meet its domestic demands and PDVSA’s fuel supply contracts, Venezuela would have to produce some 850,000 bpd of fuels, the documents show.

Neither of the June alternatives show it getting close to that level. If PDVSA decides to process the foreign crude, it would produce 606,000 bpd, and less if it does not.

From January through March, PDVSA’s refineries supplied 78 percent of the 365,000 bpd of the fuels demanded by Venezuela’s domestic market, which forced the company to import finished products including gasoline and diesel.

Under the plan excluding foreign oil imports, PDVSA’s domestic refineries this month would work at about 36 percent of their total capacity, or 473,000 bpd of Venezuelan crude, according to the documents, reflecting an acute lack of spare parts and delayed maintenance projects.

On Wednesday, PDVSA’s 310,000-bpd Cardon refinery restarted a vacuum distillation unit that was waiting for spare parts to be repaired. Last week, the 645,000-Amuay refinery restarted one of its crude distillation units.

Those repairs are just some of the many still pending, according to the documents. At Venezuela’s smallest refineries, Puerto la Cruz and El Palito, the lack of medium and light crudes has kept several distillation units out of service for months.

The insufficient fuel production is affecting China’s CNPC [CNPC.UL] and its subsidiaries the most as PDVSA would have to ship 258,000 bpd of fuel oil and jet fuel to these companies for repaying Chinese loans extended to the Venezuelan government in the last decade, but it typically delivers less than 100,000 bpd.

Russia's Rosneft ROSN.MM this month is entitled to 80,000 bpd of fuel oil, jet fuel and natural gasoline under oil-for-loan contracts, while Cuba and members of Petrocaribe should receive at least 108,000 bpd, according to current contracts.