Venezuela Seizes Russia-linked Firm’s Oil Venture

State-owned PDVSA of Venezuela has acquired GPB Global Resources’ a private energy corporation created by ex-Gazprom PJSC personnel with minority ownership in a strategic joint oil venture.

According to four people familiar with the situation who are not permitted to talk publicly, Petroleos de Venezuela SA took over the 40% share in the Petrozamora venture over the past month and replaced the board of directors after alerting GPB in a letter.

After being informed of the changes to the project, GPB may have been offered compensation or maybe in negotiations with PDVSA. This type of operational control over a business by a foreign company is quite unusual in Venezuela, and GPB held this position, handling the partnership’s money and all.

Although GPB is a privately held Dutch firm, it is headed by Vladimir Shvarts and two ex-executives of the Russian government-affiliated Gazprom PJSC based in Moscow: Boris Ivanov and Sergey Tagashov.

According to the persons, PDVSA appointed Erick Perez as the new head of Petrozamora last week, and the company’s inaugural board meeting took place without the presence of any GPB personnel. Perez is not just the head of the government’s affiliate that works in partnership with international corporations, but also the vice minister of oil and vice president for exploration and production.

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GP Bank’s local affiliate is operating under the name Gazprombank Latin America Ventures. Russia’s Gazprombank sold its share in Petrozamora to GPB in 2019. Gazprombank had previously announced in 2013 that it would invest $1 billion in the project, a year after signing a 25-year contract with PDVSA.

Venezuela Seizes Russia-linked Firm
Venezuela Seizes Russia-linked Firm

Sanctions and the departure of international businesses like Rosneft Oil Co., Equinor SA, and drilling companies Baker Hughes and Halliburton have made it difficult for Venezuela’s oil industry to stabilize production at roughly 700,000 barrels per day. In 1998, the South American nation’s output reached a record high of 3.4 million barrels.

One of the people said that PDVSA’s goal in purchasing Petrozamora was to boost domestic supplies by transporting crude from the field to the Paraguana Refining Complex, located around 200 miles to the north.

PDVSA’s Nynas refinery in Sweden relied on crude from this partnership when it was at its peak. Nynas was a target of US sanctions in 2019 after PDVSA was hammered the previous year. After a reorganization, PDVSA cut its ownership and temporarily ceased supplies from Petrozamora.

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