You are here

Harvest eyes Gabon development following Venezuela asset sale termination

05th January 2015

Harvest Natural Resources has announced that the Share Purchase Agreement (SPA) between Petroandina Resources Corporation (Petroandina), Pluspetrol Resources Corporation (Pluspetrol), Harvest and HNR Energia, a wholly-owned subsidiary of Harvest, for the purchase of Harvest's remaining interests in Venezuela for a purchase price of USD 275m in cash has been terminated as a result of the failure to obtain approval of the transaction from the Venezuelan government by December 31, 2014

Harvest eyes Gabon development following Venezuela asset sale termination
Harvest says that government innaction has caused the termination of its planned USD 275m asset sale

"After three years of our best efforts, we are both disappointed and frustrated that the sale of our interests in Petrodelta has once again been effectively denied by the government of Venezuela and CVP,” said James A. Edmiston, president and CEO of Harvest.

“As a result of this development, in the near term, Harvest will focus on strengthening its balance sheet and exploring alternatives with regard to our interests in Petrodelta and Gabon.  These actions may include efforts to monetise our Dussafu asset."

Representatives of the Venezuelan government and Corporacion Venezolana del Petroleo S.A. (CVP), a PDVSA affiliate who along with another PDVSA affiliate owns a 60 per cent interest in Petrodelta, informed Harvest and Petroandina that any approval of the contemplated transaction would be conditioned on Petroandina guaranteeing an unspecified bonus payment for access to Petrodelta's reserves and USD 1.52bn of financing for Petrodelta.

Neither of these conditions exist as contractual obligations related to ownership in Petrodelta and ultimately Petroandina and the Venezuelan government could not reach an agreement on those matters.

Harvest and Petroandina signed the SPA on December 16, 2013, and closing of the transaction had been subject to, among other things, approval by the company's stockholders and the government of Venezuela.

On May 7, 2014, the company's stockholders approved the sale of the company's remaining interests in Venezuela to Petroandina.

As a result of the termination of the SPA, Harvest will retain its 20.4 per cent interest in Petrodelta and Petroandina will retain its 11.6 per cent interest in Petrodelta, which it had purchased from Harvest for USD 125m in cash on December 16, 2013.

Got a news tip? Email news@oilandgastechnology.net