PetroChina Drops Venezuela’s State Oil Company

PetroChina is looking to drop Venezuela’s state-owned oil firm PDVSA as an equity partner in a planned and long-delayed $10-billion oil refinery and petrochemical complex in southern China, Reuters reported on Thursday, quoting executives and an official with the Chinese company and its parent CNPC.
The plan to dump the ailing Venezuelan oil firm is not a result of the new sanctions that the United States imposed on PDVSA earlier this week. The reason behind the Chinese decision is the continuously deteriorating finances of Venezuela’s oil company in recent years, two executives at PetroChina’s parent company China National Petroleum Corporation told Reuters.
“There will be no role of PDVSA as an equity partner. At least we do not see that possibility in the near future given the situation the country has been through in recent years,” one of the executives said.
PDVSA was initially planned to be an equity partner with a 40% stake in the refinery and petrochemical project, with the refinery originally designed to process Venezuelan crude oil and to have a capacity of 400,000 bpd.
In the summer of 2018, PetroChina had to reconfigure the refinery—approved in 2011 but without notable progress since—to be able to process crude grades other than Venezuela’s, as the Venezuelan production collapse and deteriorating finances at its oil firm PDVSA were putting future crude oil supplies at risk, S&P Global Platts reported in July.