Español

 

Guyana


Trinidad
& Tobago




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

Chinese HQC ends oil-projects with venezuelan supliers

PDVSA

Officials tour the first phase of the Sinovensa expansion plant.

- PDVSA's unpaid invoices to China has cascade effect on locals
- China proposed Venezuelan providers to negotiate in yuan

By Fabiola Zerpa / Bloomberg

CARACAS
Petroleumworld 10 23 2019

China's leading oil contractor in Venezuela terminated deals with local providers at oil projects due to lack of payment from the state oil company. But exiting is proving a challenge to both sides.

China Huanqiu Contracting and Engineering Corp. , known as HQC, an affiliate of China's biggest energy company China National Petroleum Corp., told local providers that their contracts were being terminated, citing “the extremely difficult situation of this project,” according to a document seen by Bloomberg.

Local oil service companies were invited to negotiate exit terms and payments due with HQC officials. The move follows HQC's decision in early September to halt work at the biggest China-Venezuela joint venture due to lack of payment on the part of Petroleos de Venezuela SA .

The additional pullback by the Chinese firm threatens to further slow production that has plunged amid a lack of investment, made worse by U.S. sanctions that have cut off income from oil sales and imports of needed equipment and chemicals. China's ventures with PDVSA accounted for about 13% of the country's total output in August, according to PDVSA internal data obtained by Bloomberg.

READ: Venezuela's Oil Woes Deepen as Chinese Contractor Halts Work

A CNPC spokesman declined to comment. Multiple calls and emails to HQC and its listed parent China Petroleum Engineering Corp. went unanswered.

Negotiations haven't yielded results. HQC asked Venezuelan service providers to open accounts in China in order to receive payments in yuan, amid concern that if it paid contractors locally, HQC's accounts in the U.S. financial system could be frozen for violating sanctions against PDVSA, according to people with knowledge of the situation.

Venezuelan companies view the proposal as impractical and costly, as their financial resources are located in the Western Hemisphere. Beijing banks' rules for opening accounts are cumbersome and other options, such as banks in Hong Kong, were ruled out by CNPC's affiliate, the people said.

Several companies are lobbying the Chinese embassy in Caracas in an effort to seek a mediated solution, the people said. They are owed over $30 million, according to a person with knowledge of the situation.

CHQ said last month it was halting expansion work at the jointly managed 130,000 barrel-a-day upgrader, alleging lack of payment by PDVSA. Just two months earlier, Nicolas Maduro‘s government went on state TV with CNPC officials to launch the expansion.

— With assistance by Jasmine Ng

 



Story by Fabiola Zerpa from Bloomberg.

bloomberg.com / 10 23 2019

________________________


We invite you to join us as a sponsor.Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.

 

________________________

 

Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


TOP

Contact: editor@petroleumworld.com,

Editor & Publisher: Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2019, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld ™  / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.