For the immediate future at least, it would appear that foreign oil companies that had been part of joint venture arrangements with Venezuela in the shadow of United States-imposed sanctions have, it seems, decided to call it a day, according to an Oilprice.com report published last week.
The report states that eight foreign oil companies that had worked in the country under Joint Venture arrangements (JV’s) with Venezuela’s state-run oil company PDVSA have decided to respond to the ‘green light’ given by the Venezuelan government to terminate their JV’s and effectively sever their working relationships with the country’s oil and gas sector. There is, however, a critical caveat in the arrangement, according to a Reuters report, while the departing companies will be allowed to either sell their shares or return them, they must forgive past debts and unpaid dividends as part of the exit deal.
Eight foreign companies that reportedly had JVs with Venezuela have, over the past five years, either transferred the ownership of those shares or else, simply given them up.
That another wave of oil companies would appear to be preparing to follow suit is now painfully apparent, according to a Reuters report. The report says that the situation in Venezuela has become sufficiently bleak “that even taking the loss of not been able to collect monies due has been seen by some as an acceptable “term.”
The Reuters report says that three foreign companies, Equinox, Inpex, and TotalEnergies, have already departed Venezuela having agreed to the terms spelt out by the government. The report said that the company TotalEnergies had lost US$1.38 billion in the process of complying with the departure conditions set by Caracas.
All told, eight foreign companies that had Joint Venture Agreements with PDVSA have already either transferred the ownership of their interests or surrendered their shares over the past five years. The report says that seven other smaller companies operating in Venezuela have no physical presence there while fifteen others have been inactive.
