Multinational companies are exiting from the crisis-stricken OPEC nation of Venezuela and the latest company to do so is the Japanese oil company Inpex Corp which sold off two of its oil and gas assets in the country to Caracas based Sucre Energy Group, said reports quoting sources.

70 per cent stake in Inpex’s Gas Guarico natural gas partnership with state oil company PDVSA as well as 30 per cent stake in the Petroguarico oil joint venture was purchased by the privately held Sucre, a company engaged in exploration and production of oil and gas focuses on improving mature fields in Latin America. The deal however has not yet made public.

No comments were available in the reports from Inpex, Sucre and PDVSA.

The value of the transactions was also not mentioned in the reports.

The once promising assets in Venezuela are being sold off by a string of foreign companies as the exit the country. Venezuela has some of the largest crude reserves of the world. the country has however been tormented by hyperinflation, corruption, and sanctions on PDVSA byt the United States  aimed at ousting President Nicolas Maduro which has been labelled a dictator by Washington.

TotalEnergies of France and Equinor ASA of Norway exited their  Petrocedeno joint venture with PDVSA in recent weeks because of the high carbon intensity of the extra-heavy crude extracted from the project. Their stakes in Venezuelan gas fields have however been retained by both the companies,

There 5 per cent stake in Petroindependencia joint venture with PDVSA was recently exited by a consortium of Japanese companies including Inpex.

The move by Sucre to enter the segment highlights the growing interest of local companies to move into the space vacated by multinationals in the oil sector and beyond with the government of the country pulling itself back from intervening in the economy and relaxing restrictions imposed on the private sector in the hope of attracting more investment in the face of sanctions.

Sucre is invested in the oil sector of Ecuador and has a stake in a subsidiary of Paris-based Maurel et Prom which acquired Royal Dutch Shell’s 40 per cent stake in Petroregional del Lago in 2018, which in turn is a joint venture with PDVSA in western Venezuela.

Reports said that Sucre was more interested to buy into Gas Guarico, which churns out about 50 million cubic feet per day of natural gas. However it agreed to buy the stake in Petroguarico as well as part of the deal.

Reports also quoted sources as saying that investors can find the Venezuelan gas fields more attractive than oil-focused projects as majority stakes in the fields can be held by private companies in addition to operating them as well

Under Venezuelan law, PDVSA has to be a majority stake holder in oil joint ventures with private companies.

Despite owning huge gas reserves, there is limited infrastructure to process and transport it in Venezuela. That has presented the country with a handicap in exporting oil to neighbors. Within the country, only 10 per cent of the households have a gas connection which means majority of the gas produced along with oil drilling is burnt which results in heavy carbon emissions.

(Adapted from OffShore-Technology.com)