A Review of the Nigerian Energy Industry

PDVSA ‘makes offer’ for Harvest JV stake

15 April 2015, News Wires – Venezuelan state oil company PDVSA has reportedly offered to buy Texas-based oil and gas producer Harvest Natural Resources’ minority stake in its Petrodelta joint venture.

VenezuelaThe news pushed Harvest’s New York-listed shares up nearly 129% to $1.01, their highest level since December, on apparent relief the financially troubled company may be on the brink of finally exiting Venezuela.

PDVSA is awaiting a response from Harvest, Reuters reported.

Harvest, which says Opec-member Venezuela has twice blocked it from selling its stake, did not immediately respond to requests for comments, the news wire said.

Harvest’s website says the company has a 32% equity stake in Petrodelta.

“The offer by PDVSA last week was in a fair range to settle the deal taking into consideration today’s oil prices,” Reuters cited a source close to PDVSA as saying.

It remained unclear if PDVSA would keep the Petrodelta stake for itself or sell it on, as the company’s new leadership seeks to spur investment in the country’s mature oilfields.

Petrodelta, located in Venezuela’s north-east, produces around 42,853 barrels per day, according to Harvest’s 2014 results.

In 2013, a Harvest deal to sell its stake to Indonesian oil company Pertamina was rejected by the government, and a similar attempt to sell it to a unit of Argentina’s Pluspetrol was also unsuccessful.

The company has warned it will seek arbitration if talks with Venezuela do not lead to a “fair and equitable solution”.

Harvest is among many foreign companies in oil-rich Venezuela that are struggling with currency controls that complicate imports and repatriation of profits. They also must deal with spiraling inflation and shortages of basic goods.

Vietnam’s state oil and gas group PetroVietnam, for instance, is considering selling its 40 percent stake in a JV with PDVSA, two sources said last month.

Still, PDVSA’s new leadership appears open to renegotiating contracts to give foreign partners more control over operations, exchange rate terms, and sales, sometimes in return for fresh investment.



– Reuters

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