Harvest, stymied in Venezuela, eyes options

Citing “severe liquidity constraints brought about by the failure of the Venezuelan government to approve Harvest’s sale of its Venezuelan asset,” Harvest Natural Resources Inc. (HNR) is trying to raise funds in debt and equity markets to cover operating requirements and exploring reorganization if those efforts fail.

HNR affiliates earlier this year submitted a request for arbitration to the International Center for Settlement of Investment Disputes claiming the Venezuelan government hampered its business activities, including efforts to sell its 32% interest in Petrodelta SA, which produces oil in eastern Venezuela.

It later dropped the arbitration request when Petroandina Resources Corp. NV, an affiliate of Pluspetrol Resources Corp. BV with which HNR had negotiated the sale for $400 million of its Venezuelan interests, complained of harm to its business relationships in Venezuela, including an investment in Petrodelta (OGJ Online, Jan. 29, 2015).

In a statement on fourth-quarter and annual 2014 earnings, HNR Pres. and Chief Executive Officer James Edmiston revived the possibility of international arbitration.

He said HNR has begun discussions with state-owned Petroleos de Venezuela SA on “an amicable exit from Petrodelta” but will return to arbitration if those efforts fail “to the extent that it is legally permissible and that it continues to be in the best interests of our shareholders.”

For 2014, HNR reported a net loss of $193.5 million after a net loss of $89.1 million in 2013.

The statement said HNR is “consulting with professionals in the area of restructuring and reorganization in the event the company is not able to obtain sufficient funding to pay its expenses.”

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...