Venezuelan state oil company PDVSA clinched $1.45bn in financing from a local firm led by one of the country’s wealthiest men and from India’s ONGC Videsh Limited to boost production in joint venture projects.
Delta Petroleum, a company led by Venezuelan billionaire Oswaldo Cisneros, will invest $1.13bn in the Petrodelta joint venture in a state-controlled oil field, PDVSA said in statement on Friday.
ONG Videsh, the overseas arm of state-owned Oil and Natural Gas Corp., agreed to invest $318m to raise production at the Petrolera Indovenezolana joint venture, where it holds a 40% stake.
“This is a very important alliance with India,” Venezuelan Oil Minister Eulogio Del Pino said in a statement. “India is the country building the largest number of refineries in the world right now. It had the highest growth in oil consumption this year, ahead of China.”
The financing deals announced on Friday also highlighted the government’s efforts to attract more private funds to the country’s energy sector.
Last month, Cisneros and a group of Venezuelan businessmen bought PetroDelta from Houston-based Natural Resources and Argentina’s Pluspetrol. PDVSA and Delta Petroleum plan want to increase production at Petrodelta to 110,000 barrels per day (bpd) from the current 40,000 bpd during the next five years.
ONGC’s financing is expected to go towards increasing production at the San Cristobal field to 40,000 bpd from 20,000 bpd.
Also on Friday, S&P Global Ratings said it upgraded PDVSA’s outstanding senior unsecured 2017 notes and corporate credit rating to CCC- from SD.
The upgrade comes after PDVSA’s liability management exercise in October where the company exchanged $2.8bn or 39.4% of outstanding 2017 notes for new 2020s. The rating agency said the debt swap improved the firm’s financial flexibility and added that another exchange is possible with about $1.1bn in amortizations due this month for its 5.25% November 2016 notes and another $2bn related to its April 2017 notes.
Last month, Fitch downgraded PDVSA’s credit rating after the bond exchange to CC from CCC, saying the oil company’s liquidity positions remains weak and that it could still face difficult in making payments.