PDVSA takes full control of the Petrocedeño oil JV (Venezuela)

11 Aug 2021

Venezuela's state-owned oil and gas company Petroleos de Venezuela SA (PDVSA) has taken over 100% of the shares in the Petrocedeño oil joint venture, in which it owned 60%, while Total held 30% and Equinor the remaining 10%. Petrocedeño, which was set up in 2007, operates in the Junín bloc between Guárico and Anzoátegui states. The compensation amounts were not disclosed, but PDVSA will have to invest massively to restore the production of new wells and rejuvenate the upgrader.

PDVSA has acquired a majority stake in four projects on the Orinoco belt through the transformation into mixed companies of the 4 joint ventures (including Petrocedeño). Petro Anzoategui (previously Petrozuata) is fully owned by PDVSA, while Petro Piar (previously Hamaca) is 70% owned by PDVSA and 30% by Chevron. Finally, Petromonagas is 83.33% owned by PDVSA and 16.67% by Rosneft (capacity of 120 000 bbl/d); in 2016, Rosneft signed an agreement to increase its stake to 40%. Because of the change in status of the associations exploiting the fields of the Orinoco Belt, ExxonMobil and ConocoPhillips withdrew from the country in 2007. ExxonMobil was awarded a compensation of US$1.6bn by ICSID for the expropriation of La Ceiba and Cerro Negro.

Oil operations in Venezuela have been severely hit by US sanctions imposed since 2017 (reinforced by an oil embargo in 2019 and secondary sanctions in 2020), especially oil production in the Orinoco oil belt, which were shipping around 0.5 mb/d of extra-heavy crude oil to US Gulf coast refiners. PDVSA an its partners thus tried to convert heavy crude upgraders into blending facililities to export to Asian markets, but production has remained limited.

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