Shell seeks to sell Venezuela JV stake

Daily Sabah (Turkey) - - Business -

ROYAL Dutch Shell Plc is ne­go­ti­at­ing the sale of its stake in a Venezue­lan oil joint ven­ture to Paris-based Mau­rel & Prom , three sources said this week, a move to scale down its crude busi­ness in the ail­ing OPEC-mem­ber coun­try to fo­cus on gas. The An­glo-Dutch com­pany is seek­ing to sell its 40 per­cent stake in Petrore­gional del Lago, a joint ven­ture with Venezuela’s staterun oil com­pany PDVSA in the western state of Zu­lia near Colom­bia.

The area has been plagued by fre­quent theft of equip­ment and near-daily power cuts as Venezuela re­mains mired in deep re­ces­sion, hy­per­in­fla­tion and chronic short­ages of food and medicine. For­eign com­pa­nies also have com­plained in pri­vate that joint ven­tures with PDVSA are stymied by con­vo­luted bu­reau­cracy, dodgy con­tracts, and lack of re­sources, ac­cord­ing to dozens of sources in the in­dus­try. At Petrore­gional, Shell has grown frus­trated by de­lays in re­ceiv­ing div­i­dends from PDVSA and a ban on mi­nor­ity part­ners in­de­pen­dently ex­port­ing pro­duc­tion, one of the sources said. That has de­prived Petrore­gional, which in 2016 pro­duced about 33,000 bar­rels per day (bpd) of crude, of much-needed in­come and dented prof­itabil­ity, the source added. In the last few weeks a dis­agree­ment with Venezuela has emerged over a fee called an en­trance bonus that Mau­rel & Prom would have to pay to the govern­ment, as re­quired by Venezue­lan law, to gain ac­cess to the field’s re­serves, two of the sources said. Ne­go­ti­a­tions are cur­rently on hold, they added.

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