PetroVietnam mulls leaving Venezuela joint venture: sources


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Storage tanks sit elevated at the Petroleos de Venezuela SA, PDVSA, Amuay refinery in northern Venezuela. Source: PDVSA via Bloomberg Storage tanks sit elevated at the Petroleos de Venezuela SA, PDVSA, Amuay refinery in northern Venezuela. Source: PDVSA via Bloomberg


Vietnam's state oil and gas group PetroVietnam (PVN) is considering selling its 40 percent stake in a joint venture with Venezuelan counterpart Petroleos de Venezuela (PDVSA), according to two sources close to the exploration project.
PVN's investment in the Junin 2 venture in Venezuela's heavy-crude Orinoco belt had been initially costed at $1.8 billion over five years, making it one of Vietnam's biggest overseas investment projects.
But a senior source in PDVSA said the Vietnamese company - long rumored to be unhappy over Venezuela's high inflation and currency controls - was now considering a definitive pullout.
Another source close to the Petromacareo project confirmed that and also said a Colombian company was interested in buying PetroVietnam's stake. That source did not name the Colombian company.
Both sources requested anonymity because they are not authorized to speak publicly about the matter.
In a difficult economic environment that many foreign investors complain about, OPEC member Venezuela has one of the highest inflation rates in the world, 68 percent last year, and operates a Byzantine three-tier currency control system.
That complicates both payments in Venezuela and repatriation of profits for companies. The strongest rate for the local bolivar currency is 6.3 to the dollar, whereas the weakest is 170. Greenbacks also go for about 250 bolivars on the black market.
A senior Venezuelan official, Communes Minister Elias Jaua, was in Vietnam earlier this month and visited the oil company's chief executive, Nguyen Quoc Khanh, to boost the venture.
Jaua "said that President (Nicolas) Maduro had directed the government to resolve the current difficulties in the oil and gas cooperation between the two countries and not to let PetroVietnam leave the oil and gas cooperation project," the Vietnamese company said afterwards in a statement.
Petromacareo reported no production last year, according to the latest figures from Venezuela's Oil Ministry.
PDVSA and PetroVietnam did not respond to requests on Wednesday for details about the joint venture's future.
The exit of PetroVietnam would be a further disappointment for Maduro's government after Malaysian oil company Petronas also decided to exit the flagship Petrocarabobo project in the Orinoco belt in 2013, due to problems in its dealings with Venezuelan authorities and PDVSA.

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