Page 8 - LatAmOil Week 02 2020

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Melbourne-based Karoon is the operator of Block Z-38. It owns a 40% net interest in the licence area through its wholly owned sub- sidiary KEI Sucursal del Peru. Meanwhile, UK-headquartered Tullow Oil has a 35% share, and Pitkin Petroleum – registered in the UK but majority-owned by Phillipines-based PXP Energy – owns the remaining 25% equity interest.
Karoon, which has assets in Australia and Brazil as well as Peru, acquired a 20% interest in Block Z-38 in 2008. In the following year, it became the operator of the project and increased its stake to 75%. Then in May 2019, it farmed out a minority stake to Tullow Oil.
Peru has the seventh-largest oil reserves in Central and South America, with 741mn bar- rels of estimated proven crude reserves as of January 2015, according to Oil and Gas Journal.
VENEZUELA
Maduro, opposition spar over JV reforms
VENEZUELAN President Nicolas Maduro recently tried to push through new legislation allowing for changes in the ownership structure of joint ventures (JVs) that PdVSA, the national oil company (NOC), has formed with foreign investors. But his plans appear to have fallen vic- tim to the political turmoil that has gripped the country for nearly a year since opposition leader Juan Guaido declared himself interim president.
Maduro began taking steps to secure author- ity for the proposed changes in early January, when the ruling Socialist Party sought to appoint legislator Luis Parra as the head of Venezuela’s National Assembly, which is dominated by the opposition. The move drew strong criticism from opposition MPs, who were prevented by military troops from submitting votes in favour of Guaido. They responded to this show of force by declaring Parra’s appointment to be inva- lid and holding their own vote – which went, unsurprisingly, to Guaido.
President Maduro had been hoping that Parra would lead the National Assembly’s Socialist delegates to authorise legal reforms permitting changes in the ownership of PdVSA’s JVs with companies based in countries that have close ties to Venezuela. These countries are less likely to be concerned about the possibility that expanding co-operation with Caracas might trigger penalties under the US sanctions regime, which aims to limit investment in PdVSA.
According to Angel Alvarado, a member of the opposition-dominated National Assembly’s finance commission, the proposed reforms would allow these partners to obtain larger equity stakes in their projects in exchange for certain concessions. Maduro’s regime agreed to give the NOC’s partners larger stakes, provided
that they agree to turn in bonds and accept pay- ment for outstanding debts in the form of oil production, he explained.
Jose Guerra, another member of the finance commission, concurred with Alvarado’s state- ment. “Parra was put there to try to approve these oil deals,” he was quoted as saying by Reu- ters. He was referring to the fact that Venezuelan law stipulates that the National Assembly must approve changes in the structure of JVs.
Maduro and his supporters have not said exactly which projects might be affected by the proposed reforms, but Alvarado and other members of Guaido’s faction suspect that the Socialist Party is taking steps that will benefit Rosneft, a state-owned Russian company that is participating in several JVs with PdVSA. Russia’s government has been Parra’s only backer on the international stage, and it is probably not much bothered by the prospect of US sanctions on Rosneft. ™
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Even so, the country has seen crude oil produc- tion decline since the 1990s. Currently, it is only extracting around a quarter of what it did in the 1980s.. ™
Block Z-38 lies offshore Peru (Image: Tullow Oil)
Maduro is ready to give PdVSA’s partners larger stakes (Photo: La Patilla)
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w w w. N E W S B A S E . c o m Week 02 16•January•2020