Venezuela's PDVSA to Buy Top Oil Engineering Co

CARACAS (Dow Jones Newswires), Jan. 23, 2009

Petroleos de Venezuela SA, or PdVSA, is in the process of purchasing Inelectra, a top Venezuelan oil engineering company, even as depressed world oil prices are squeezing its finances.

"PdVSA wants to acquire our engineering operations in Venezuela," Antonio Vicentelli, Inelectra's president, told Dow Jones Newswires Friday. "Things are advanced, but as they say, the devil is in the details."

PdVSA officials couldn't immediately comment on the matter.

PdVSA's engineering arm, one of a number of new branches created over the past year and a half, is working on the "last details" to acquire Inelectra's operations as part of the company's plan to become self-sufficient in a number of areas.

Vicentelli noted that the acquisition wouldn't include Inepetrol, formerly an Inelectra subsidiary that is now independent and helps operate several oil projects in Venezuela.

"They're interested in our engineering and construction operations only," he said, but declined to give a possible purchase price. He said the deal isn't yet finalized.

People with knowledge of the deal say that talks have been ongoing since early 2008, and workers at the company have already been informed of the soon-to-be concluded transaction.

Inelectra is a Venezuelan company with operations in Colombia, Argentina, Mexico, Spain and Panama. It has business representation in Trinidad and Tobago, Qatar and Abu Dhabi as well, according to the company's web site.

PdVSA's move to acquire companies and sign joint ventures with others follows a mandate by President Hugo Chavez to make the state-oil firm technologically independent and rely less on U.S. supplies and knowhow.

The company is now facing a difficult outlook as oil prices have fallen more than $100 a barrel from their record highs last summer.

Oil Minister Rafael Ramirez has admitted that a number of planned projects are under review and could be shelved if needed.  

Copyright (c) 2008 Dow Jones & Company, Inc.