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Venezuela pressures foreign partners on oil venture commitments: sources

Reuters 

By Parraga and Deisy Buitrago

(Reuters) - Foreign partners of Venezuela's are facing pressure from the state-run firm to publicly declare whether they will continue as minority stakeholders in Belt projects following U.S. sanctions, three people familiar with the matter said.

The sanctions on Petroleos de (PDVSA), imposed last month in an attempt to dislodge Venezuelan Nicolas Maduro, barred access to U.S. and supplies for the joint ventures, pressuring Venezuela's already falling crude output and exports.

PDVSA's Belt joint venture partners, mostly U.S. or European companies, are facing difficulties getting cashflow out of the country as a result of the sanctions, straining their ability to continue production and exports.

has been in talks with the companies to persuade them to commit publicly to the joint ventures, the sources said in recent days.

France's Total SA, Norway's Equinor ASA, Russia's and U.S.-based hold minority stakes in joint ventures with PDVSA that produce crude and operate upgraders capable of converting Venezuela's extra-heavy oil into exportable grades.

PDVSA did not reply to a request for comment. On Monday, Venezuelan and PDVSA head said on a visit to that relations with international oil companies including were continuing.

A manager at said last week that the company did not expect to decline at its projects in this year, adding that the company saw the current situation in as temporary.

did not respond to a request for comment on Tuesday.

The four crude upgraders are capable of converting up to 700,000 barrels per day. The oil is exported by the joint ventures and each partner receives its share of the exports.

Total believes it can stay in Venezuela, its said on Monday, although last week the company said its were blocked and it had evacuated its foreign employees.

Rosneft has continued working normally at its Petromonagas joint venture with PDVSA, according to the sources.

Equinor declined to comment on operational issues, referring questions to Petrocedeno, its joint venture with PDVSA.

Chevron's operations in Venezuela are continuing, a said on Monday, reiterating that the company was committed "to the country's in compliance with all applicable laws and regulations."

Even if the companies commit to Venezuela, their ability to produce could be crimped by the sanctions. Last week PDVSA ordered to halt and upgrading, due to a lack of naphtha to dilute the extra-heavy crude, according to sources from the project.

The Petrocedeno-PDVSA venture's 220,000-bpd upgrader was already out of service when the decision was made, one of the people said. It is unclear when will be halted.

PDVSA is studying if the other joint ventures in the will have to halt operations, with diluent supplies dwindling, the people said.

India's and PDVSA's U.S. unit are the main suppliers of naphtha to Venezuela, according to internal PDVSA data. Those flows have declined since sanctions took effect on Jan. 28, according to Refinitiv Eikon data.

(Reporting by Parraga in and Deisy in Caracas; additional reporting by in Oslo, Olesya Astakhova in Moscow; Editing by and Susan Fenton)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, February 12 2019. 17:12 IST
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