Very usefull links





Business Partners




caracas chronicles

Gustavo Coronel


Venezuela Today

Le Blog des
Energies Nouvelles




PDVSA to allow CITIC to float Petropiar stock on the Hong Kong SE


Petropiar (Petrozuata-Hamaca project-Orinoco belt)

CARACAS, Mar 01 2012

Observers of the Venezuelan oil sector did a collective spit-take on Tuesday when the proudly socialist administration announced that it intends to privatize part of the state-owned oil industry. It's a decision that barbecues perhaps the most sacred of all sacred ideological cows in the Bolivarian Republic. In a first for the Chávez era, a portion of Venezuela's vast oil industry is to be floated on the stock market. (Characteristically, perhaps, the stock exchange involved is Hong Kong's, rather than New York's or London's.)

The decision involves Petropiar, a joint venture between Venezuela's state-owned oil firm, Petróleos de Venezuela (known as PDVSA), and U.S. oil major Chevron. Petropiar, which has the capacity to transform 190,000 barrels of thick, tar-like, extra-heavy crude into 180,000 barrels of light, easy-to-refine synthetic crude every day, has been 70 percent PDVSA-owned for years, while Chevron holds the remaining 30 percent.

On Tuesday, PDVSA announced that it would sell a 10 percent stake in the company to Chinese state holding firm CITIC. In itself this was unremarkable; the Chávez era has often seen Venezuelan state firms selling stock to state-owned companies in other countries. The surprise came later in the same announcement, when PDVSA announced it had agreed to allow CITIC to float a portion of its share on the Hong Kong Stock Exchange, essentially allowing any Tom, Dick, or Harry to buy into Venezuela's state-owned oil sector with a simple call to his broker.

For Venezuelans, the irony here is impossible to overstate. For years now, whenever someone even hinted at the notion that it might make sense to sell off part of Venezuela's state holdings in the oil sector, the Chávez Administration invariably reacted with outraged revulsion, branding any such move as tantamount to "selling out the homeland." Emotional, often borderline-hysterical denunciations of opposition politicians as schemers intent on handing over Venezuela's hydrocarbon birthright to foreign speculators have been at the heart of chavista resource nationalism from the beginning. And while pragmatic acknowledgement of the need to attract foreign investment into the oil sector have been known to lead the government to specific partnership deals with given companies to operate given oil fields, floating any part of the industry in foreign markets crosses every ideological red line chavismo was supposed to hold dear.

That PDVSA would allow CITIC to privatize any part of the oil industry speaks to the government's increasing desperation to attract investors into the country's vast but hard-to-develop extra heavy oil fields. Though Venezuela boasts the world's largest recoverable oil reserves on paper, tough geology and one of the world's most hostile investment climates have left PDVSA short of the huge capital flows needed to develop the area properly. With the need to bring production online to help finance chavismo's unlimited thirst for fiscal largess, PDVSA is left with an increasingly weak hand in negotiating with potential partners. So weak, in fact, that it has now willing to compromise one of the most hallowed principles of the Chavez era in its desperation to entice investors in.

Story Francisco Toro from FP Foreign Policy

FP | Thursday, March 1, 2012 - 7:05 AM


Follow us and post your comments: in Twitter Facebook

Send this story to a friend

Copyright© 1999-2009 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ stories by anyone provided it mentions as the source. Other stories you have to get authorization by its authors.

Internet web links to 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

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

Any question or suggestions, please write to:

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


office (58 212) 635 7252, cel (58 414) 276 3041, (58 412) 996 3730 , (58  412) 952 5301
Editor:Elio C. Ohep A/Producer - Publisher:Elio Ohep /
Contact Email:
CopyRight © 1999-2006, Elio Ohep - All Rights Reserved. Legal Information
- CCS office Tele
phone/Teléfonos Oficina: ( 58 212) 635 7252
PW in Top 100 Energy Sites

Technorati Profile

Fair use notice of copyrighted material:
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: 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.