Petrodelta defers work on PDVSA payment shortfall - Harvest CEO - Venezuela
Published: Thursday, November 5, 2009 17:14 By David Casallas / Business News Americas


Venezuelan JV Petrodelta has deferred some work due to state oil company PDVSA falling behind on payments, according to James Edmiston, CEO of Houston-based Harvest Natural Resources (NYSE: HNR), which is one of the venture's partners.





Work delays include completion of a gathering system upgrade at the Temblador field and the contracting of a second rig, Edmiston announced during Harvest's third quarter results webcast.


"However, we are seeing progress in stabilizing the situation and PDVSA has stated publicly that these debts would be settled by year-end," said the executive, adding funds are starting to reach contractors following a bond issue by the state company.


"PDVSA has fallen behind in payments to its contractors including contractors engaged by PDVSA to provide services to Petrodelta. PDVSA also has fallen behind on certain payments and obligations to Petrodelta which Petrodelta would have used to pay its contractors. As a result, Petrodelta has experienced difficulty in retaining contractors," Harvest CFO Stephen Haynes said in the presentation.


In the third quarter, Petrodelta delivered 1.94Mb to PDVSA, compared to 1.5Mb in 3Q08.


Gas deliveries to PDVSA in July-September totaled 900Mf3 (25.5Mm3), versus 2.8Bf3 in the year-ago quarter.


"This reduction in gas offtake is consistent with the overall development plan and represents the depletion of small gas caps present in Uracoa. Until new facilities are built for the new fields, we will not see much contribution on the gas side from the newer assets," Edmiston said.


The CEO added that Petrodelta's oil production in October averaged 24,000b/d, the best month of production since spring of 2005.


Harvest has a 32% stake in Petrodelta, while PDVSA holds 60% and local construction firm Vinccler 8%.