Venezuela’s oil and gas partners will be leaving the country, forgoing unpaid debt by Stocksak


© Stocksak. A crude oil pump jack can be seen near Lake Maracaibo in Cabimas, Venezuela, October 14, 2022. REUTERS/Issac Urrutia


Mariela Nava and Marianna Parraga. Deisy Buitrago

CABIMAS (Stocksak), Venezuela – Venezuela allows its partners in the state oil company PDVSA’s joint ventures, by selling their shares or returning them, so long as they do not pay past debts or unpaid dividends. Four people familiar with the matter said.

Companies like TotalEnergies in France, Equinor in Norway, and Inpex in Japan have not been forced to make losses or pay off unpaid debt. Their departures illustrate how U.S. sanctions against the energy sector have rendered it impossible to operate in the country with the largest crude reserves, resulting in idle oilfields.

Eight foreign companies from the 44 joint ventures of PDVSA have either transferred or given up stakes. Stocksak found that seven other smaller companies have left Venezuela, while 15 projects are still inactive.

“None of these stakes are recoverable as book value,” said an oil executive, whose company sold Venezuela to another company last year. “Among those still in the partnerships, few hope ever to recoup pending commercial debts or dividends from PDVSA.”

Three years of severe U.S. sanctions against PDVSA have impeded access to capital and cashflow, and have limited the markets for Venezuelan oil. This has had a significant impact on the operations and workers of the majority foreign minority stakeholders.

After TotalEnergies and Equinor departed Petrocedeno in 2021, one of Venezuela’s largest oil upgrading projects, Petrocedeno was abandoned by Equinor and TotalEnergies. Smaller firms have since followed.

The transfer of its 30% stake to a PDVSA unit resulted in a loss of $1.38billion for the French company. It received “a symbolic amount” for its assets, Chief Executive Patrick Pouyanné said at the time.

Total was freed from all past and future liabilities arising out of its Venezuela projects by the transfer. Two people familiar were not surprised to hear that Petrocedeno wiped out the partners’ dividends and other debts.

Inpex sold stakes in two Venezuelan assets last year to private equity firm Sucre Energy Group and returned a stake to PDVSA in a third project. According to a person involved in this transaction, Sucre received accounts receivables as well as owed dividends.

These departures highlight risks of doing business in cash-strapped PDVSAs and the few legal avenues companies have that have not been paid.

Equinor declined details of the transaction but confirmed via email that there is no activity in the country. Inpex and Total did not respond to requests for comment.


PDVSA has appointed new joint venture managers for some companies that have lost staff in Venezuela, or are dealing with labor claims.

GPB Global Resources was a minority stakeholder of the Petrozamora joint-venture. Sources and workers did not provide any explanation.

Petrozamora worker, who requested anonymity to refer to GPB, said that “they left without paying us fully.” “A few days ago, a PDVSA official came to our rescue and stated that the company had not adhered to its contract.”

Suelopetrol declined comments on talks with PDVSA. However, Suelopetrol stated that the company remains committed Venezuela with assets in place and staff in place. GPB Global Resources didn’t respond to a request for comment.

Near Maracaibo Lake in Venezuela, one of the oldest producing regions, you can see workers and companies leaving. Its oil output is falling, outages are common, and some workers are in danger of starvation.

“A month back, they tried restarting a small-sized rig and it caused a blast that sent crude oil to people’s homes,” said a neighbor at Maracaibo’s Cabimas Oilfield. His feet were stained by oil.

PDVSA employs fewer than 110,000 people compared to a decade ago. This is according to Daniel Delgado (union leader at Tia Juana oilfield).

“We are putting our lives at risk to get an oil barrel out,” Delgado said. He said that they work in unsafe conditions without proper equipment and medical assistance. It’s a high price,” Delgado said.

PDVSA delivered oil cargoes in 2019 and 2021 to its partners to reduce outstanding loans.

Eni and Repsol received 3.6 Million barrels this summer in a temporary resumption oil-for-debt. However, nothing has happened since then. Chevron (NYSE:) proposed to the U.S. government that it be allowed to recoup its loans through an expanded license. However, this is still pending.

An oil industry representative said that almost none of the companies that have left this country have been granted that benefit. He declined to be identified.

The departures have affected oil service providers most, according to the Venezuelan Petroleum Chamber. Its members dropped from 500 to 300 in the last four year, to 300 now.

Last year, Venezuela fell short of its oil production goal. So far, the country’s oil production has stagnated at around 725,000 barrels per daily (bpd), which is well below its year-end goal of 2 million barrels per day.

To increase production further, PDVSA must honor past debts, Enrique Novoa (the Chamber’s president) said, adding that “Sanctions also need to be eased, at most partially.”

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Stocksak Editorial

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