TotalEnergies, Equinor Exit Venezuela Heavy Oil
The divestments leave PDVSA as sole shareholder of the onshore Petrocedeño project in the Orinoco Belt.
France’s TotalEnergies and Norway’s Equinor are divesting their interests in Venezuela’s extra-heavy crude oil Petrocedeño project onshore in the Orinoco Belt, leaving state-owned Petróleos de Venezuela (PdVSA) to hold 100% of the project’s equity.
Equinor said it will transfer its 9.67% nonoperated interest to Corporación Venezolana del Petróleo (CVP), a PdVSA company; TotalEnergies will do the same, transferring its 30.32% nonoperated minority stake also to CVP.
Petrocedeño S.A. produces extra-heavy crude oil from the Orinoco Belt in Venezuela and transports it for upgrading and blending into a lighter crude suitable for export.
US sanctions have seriously depressed the project’s output, which S&P Global said can produce 202,000 B/D under normal operating conditions.
But while commenting on the divestiture during a webcast on 29 July to report the company’s financial results for Q2, TotalEnergies CEO Patrick Pouyanne assured analysts that the decision to divest was “not related to the political situation in Venezuela or to sanctions.”
Rather, the company considers it “inconsistent to employ Capex in the Orinoco Belt” given that shareholders in May approved a strategy to focus new oil investments only on projects with a low carbon intensity, Pouyanne said.
Petrocedeño falls short of the criteria that TotalEnergies is now using to assess which oil projects will remain in its portfolio.
For its part, Norway’s Equinor issued a statement coinciding with the French major’s announcement, saying that Equinor was exiting the Venezuelan project to focus its "portfolio on international core areas and prioritized geographies where it can leverage its competitive advantages.”
TotalEnergies showed a symbolic one-time capital loss of $1.38 billion in its Q2 2021 financial statements to indemnify against any past and future losses resulting from TotalEnergies’ having participated in the Petrocedeño project, the company said in a statement.
TotalEnergies still holds a 69.50% stake in Venezuela’s Yucal Placer gas field (operated by Ypergas S.A., 30%), and a 49% nonoperated interest in Plataforma Deltana block 4.