Thursday, April 14, 2016

Schlumberger to pare Venezuela services on lack of payments

From @Bloomberg -- Schlumberger will reduce activity in Venezuela after the world’s largest oil services provider failed to collect enough payments from the national oil company.

The reduction will take place this month in close coordination with all customers in Venezuela to continue servicing those with available cash flow, the contractor said in a statement. Venezuela, which holds the biggest oil reserves of any country, has been battered by the collapse of prices as most of the government’s revenue comes from petrodollars.

In October, Schlumberger was said to be shifting some of its workers from Brazil to Venezuela, reinforcing the contractor’s commitment at the time as others in the industry pulled back. By late January, Schlumberger said it had entered into a deal with @PetroleosDeVenezuela during the fourth quarter to receive certain fixed assets in lieu of payment of about $200 million of accounts receivable. "Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry," the company said in the statement. "However, Schlumberger is unable to increase its accounts receivable balances beyond their current level." Currency Controls

Venezuelan authorities have struggled to make the country’s currency controls work for foreign oil partners. Venezuelan Energy Minister Eulogio Del Pino said earlier this month that partners of PDVSA, as the state-owned producer is known, would be allowed to use a new floating rate that last sold dollars for 312 bolivars. On the black market, however, one US dollar can buy almost four times as much. With triple-digit inflation, spending in bolivars can look very expensive when transacted at the official rate of 10 bolivars per dollar or the newer floating rate.

Still, the Venezuelan oil giant denied it’s struggling to pay its bills. In a statement, PDVSA rejected the cutbacks, labeling them a “manipulation” by the media and said it would continue to make payments in “various forms” to the service provider.


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