MEXICO CITY/CARACAS (Reuters) - Venezuelan state oil firm PDVSA is revamping one of its major processing operations geared to supplying U.S. buyers to produce instead a crude grade favored by Asian refiners, according to internal documents seen by Reuters.

FILE PHOTO: An oilfield worker walks next to drilling rigs at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo

Sweeping U.S. sanctions on the government of President Nicolas Maduro since January have effectively halted its oil sales to U.S. refiners, historically among the largest receivers of Venezuelan crude. The Trump administration imposed the sanctions to starve Maduro’s government of oil revenue and force him from office.

Its Petropiar joint venture, which once made up to 210,000 barrels per day of exportable “synthetic” crude out of tar-like oil from its Orinoco Belt, will be converted next month to blend heavy and light oils, according to internal PDVSA documents detailing the strategy.

The joint venture, between PDVSA and U.S.-based Chevron Corp CVX.N, plans to make a heavy crude grade called Merey by blending extra-heavy oil with lighter grades. The move comes after domestic inventories of Venezuela's synthetic crude jumped after U.S. refiners halted purchases.

Asian refineries are better equipped to handle blended crudes compared to the synthetic type produced by the Venezuelan upgraders, said Rystad Energy analyst Paola Rodriguez-Masiu. “Asia has a low hydrocracking capacity compared with the United States,” she said, referring to the processing of synthetic crudes.

Neither PDVSA nor Venezuela’s oil ministry responded to requests for comment. Chevron referred questions to PDVSA, which controls Petropiar.

PDVSA’s plan faces significant logistical challenges, most notably producing enough domestic light oil to blend - given that U.S. sanctions have sharply limited imports.

Merey will account for 822,000 bpd of PDVSA’s roughly 900,000 bpd of planned July crude exports, the documents show, compared with about 500,000 bpd earlier this year.

The shift could take advantage of a heavy crude supply crunch. Declining exports of similar grades from other Latin American producers have boosted Asia’s appetite for Venezuelan crudes including Merey, and helped lift their pricing, traders said.

PDVSA's main customers in Asia are China National Petroleum Corp (CNPC) and its subsidiaries; India's Reliance Industries RELI.NS and Nayara Energy ESRO.M3, and Thailand's Tipco Asphalt TASCO.BK, according to long-term supply contracts.

Venezuela in the late 1990s relied heavily on Western companies to develop upgrading technology that allowed it to tap what had previously been unusable oil in the vast Orinoco Belt - now considered the world’s largest crude reserve.

Exxon Mobil Corp XOM.N, ConocoPhillips COP.N and Chevron made multi-billion-dollar investments in the facilities, and adapted their refineries to receive the resulting crude.

Exxon and Conoco left the country amid a nationalization wave last decade by late President Hugo Chavez, while operations at the facility part-owned by Chevron have all but ground to a halt - in part due to extended blackouts in March.

The strategy also involves scaling back exports of a grade known as diluted crude oil, or DCO, made by mixing heavy crude with naphtha. Sanctions cut imports of naphtha, and Venezuela’s ailing refineries struggle to produce enough of its own supplies.

The three other ventures with upgraders in the Orinoco, operated by PDVSA and Rosneft ROSN.MM, Total SA TOTF.PA and Equinor EQNR.OL, will produce extraheavy oil temporarily mixed with naphtha for transportation and later blended to formulate Merey, the documents show.