Foreign partners of Venezuela's Petróleos de Venezuela SA (PDVSA) are facing pressure from the state-run oil firm to publicly declare whether they will continue as minority stakeholders in Orinoco Belt projects following U.S. sanctions, three people familiar with the matter said.
The sanctions on PDVSA, imposed last month in an attempt to dislodge Venezuelan President Nicolas Maduro, barred access to U.S. financial networks and oil supplies for the PDVSA joint ventures (JVs), pressuring Venezuela's already falling crude output and exports.
PDVSA's Orinoco Belt JV partners, mostly U.S. or European companies, are facing difficulties getting cashflow out of the country as a result of the sanctions, straining their ability to continue production and exports.
PDVSA has been in talks with the companies to persuade them to commit publicly to the JVs, the sources said in recent days.
France's Total SA (NYSE: TOT), Norway's Equinor ASA (NYSE: EQNR), Russia's Rosneft and U.S.-based Chevron Corp. (NYSE: CVX) hold minority stakes in JVs with PDVSA that produce crude and operate oil upgraders capable of converting Venezuela's extra-heavy oil into exportable grades.
PDVSA did not reply to a request for comment. On Feb. 11, Venezuelan Oil Minister and PDVSA head Manuel Quevedo said on a visit to India that relations with international oil companies including Chevron were continuing.
A manager at Rosneft said last week that the company did not expect oil output to decline at its projects in Venezuela this year, adding that the company saw the current situation in Venezuela as temporary.
Rosneft did not respond to a request for comment on Tuesday.
The four crude upgraders are capable of converting up to 700,000 barrels per day (bbl/d). The oil is exported by the joint ventures and each partner receives its share of the exports.
Total believes it can stay in Venezuela, its CEO Patrick Pouyanne said Feb. 11, although last week the company said its bank accounts were blocked and it had evacuated its foreign employees.
Rosneft has continued working normally at its Petromonagas joint venture with PDVSA, according to the sources.
Equinor declined to comment on operational issues, referring questions to Petrocedeno, its JV with PDVSA.
Chevron's operations in Venezuela are continuing, a spokesman said Feb. 11, reiterating that the company was committed "to the country's energy development in compliance with all applicable laws and regulations."
Even if the companies commit to Venezuela, their ability to produce could be crimped by the sanctions. Last week PDVSA ordered Petrocedeno to halt oil production and upgrading, due to a lack of naphtha to dilute the extra-heavy crude, according to sources from the project.
The Petrocedeno-PDVSA venture's 220,000-bbl/d upgrader was already out of service when the decision was made, one of the people said. It is unclear when oil output will be halted.
PDVSA is studying if the other JVs in the Orinoco will have to halt operations, with diluent supplies dwindling, the people said.
India's Reliance Industries Ltd. and PDVSA's U.S. unit Citgo Petroleum Corp. are the main suppliers of naphtha to Venezuela, according to internal PDVSA data. Those flows have declined since sanctions took effect on Jan. 28, according to Refinitiv Eikon data.
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