By September 23, 2016 Read More →

Contractors offer $700M financing for PDVSA drilling deals


Schlumberger NV, Horizontal Well Drillers and Venezuelan contractor Y&V won PDVSA contracts to drill 480 wells in three joint ventures.

PDVSA says contractors will be repaid in future oil production

CARACAS, Sept 23 (Reuters) – Venezuela’s state oil company Petróleos de Venezuela (PDVSA) said on Friday oil service companies that won $3.2 billion in contracts to drill wells in the crude-rich Orinoco Belt would supply $700 million in financing for the projects.

PDVSA has awarded major contracts to drill wells in the Orinoco, although sources close to the matter said some foreign partners had complaints the tender was rushed and that structural problems could hinder projects.

Hurt by low oil prices and a steep recession at home, PDVSA has asked bidders to provide financing themselves and be repaid in future oil production, according to company documents seen by Reuters.

PDVSA said in an English language statement on Friday that the deals “will be marked by a new scheme that involves 700 million dollars financing by participating companies.”

“Under this type of contracting, PDVSA and its service providers act under the principle of shared responsibility in drilling, and well completion and connection operations,” the statement said.

The company did not immediately respond to a request for further details.

Schlumberger NV, Oklahoma-based Horizontal Well Drillers, and Venezuelan contractor Y&V won contracts to drill a total of 480 wells in three joint ventures between PDVSA and foreign partners.

Horizontal Well Drillers has a 48-month credit line from Canada’s Callidus Capital for $350 million to finance the project, a PDVSA document seen by Reuters shows.

Callidus Capital describes itself as offering “creative funding solutions to companies that cannot access traditional lending sources.”

Y&V has secured a credit line from commodities trader Burj Petroleum Corporation for up to $250 million, according to a separate PDVSA document seen by Reuters.

(Reporting by Alexandra Ulmer; Editing by Daniel Bases)

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