PDVSA Asset Sales May Shield Venezuela From Possible Seizures
CARACAS/HOUSTON, Sept 24 (Reuters) - Venezuelan state-run oil company PDVSA's rushed move to sell units raises questions whether Venezuela wants to reduce international exposure to avoid potential asset grabs in the event companies win arbitration cases against the country.
Latin America's leading crude producer is seeking to sell its major U.S refining unit Citgo Petroleum Corp, as well as stakes in the Hovensa refinery in the U.S. Virgin Islands, the Chalmette refinery in Louisiana, and a network of refineries in Sweden, England and Scotland.
The socialist government has shrouded the potential deals in secrecy, leaving analysts and industry players scrambling to piece together a rationale for the surprise divestment.
Most say the overarching reason behind the potential sales is a pressing need for liquidity in cash-strapped PDVSA and the government, which is looking to shore up its coffers ahead of key bond payments amid a declining economy.
But industry experts also point out PDVSA may be keen to reduce its international exposure ahead of ExxonMobil Corp and ConocoPhillips arbitration decisions due in coming months.
The companies are seeking compensation after their projects were taken over under late President Hugo Chavez, who led a wave of nationalizations that included the oil, electricity and steel industries.
While Venezuela has sworn it would pay if served a negative award, market fears have grown as PDVSA may be preparing for its biggest pullback ever from the U.S. refinery market as the country's financial crisis worsens.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 14 Offshore Rigs
Manages 26 Offshore Rigs
- Paralysis At PDVSA: Venezuela's Oil Purge Cripples Company (Dec 15)
- Cuba Takes Over Venezuela Stake In Refinery Joint Venture (Dec 14)
- Union Leader: PDVSA's Amuay Refinery Halts Distillation Unit (Nov 30)