The West Houston company is in talks to sell its Venezuelan production to Argentina’s Pluspetrol, in a deal worth about $373 million. Harvest’s management is hoping to spin off the firm’s remaining assets and run them as a separate entity.
Harvest has been struggling ever since Venezuela’s 2007 nationalization of the oil industry. The takeover forced it into a minority partnership with PDVSA, the state-run oil monopoly. Casey Sattler is editor of EI Finance.
“What the company has found recently is that PDVSA has not necessarily been funding its obligations, and more specifically for Harvest, it has not been paid the dividends that were part of its agreement. And the asset, while it’s grown, and it’s very profitable, has just become too much of a headache.”
Harvest earlier attempted to sell itself to Indonesian state oil company PT Pertamina for more than $700 million. The Indonesian government rejected that deal in February.