California Wildcatter PCEC Near Deal on Venezuela Oil Fields

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessCalifornia Wildcatter PCEC Near Deal on Venezuela Oil FieldsPacific Coast Energy Co., a small California producer, is nearing a deal to operate two Venezuelan oil fields as the US-backed government in Caracas presses potential partners to sign contracts by the end of July.Author of the article:Fabiola Zerpa and Patricia Garip You can save this article by registering for free here. Or sign-in if you have an account.A Petroleos de Venezuela SA oil pumpjack on Lake Maracaibo in Cabimas, Zulia state, Venezuela. Photographer: Bloomberg/Bloomberg Photo by Bloomberg /Photographer: Bloomberg/Bloomber(Bloomberg) — Pacific Coast Energy Co., a small California producer, is nearing a deal to operate two Venezuelan oil fields as the US-backed government in Caracas presses potential partners to sign contracts by the end of July.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe firm is one of several that are negotiating joint ventures and production-sharing contracts with state-owned Petroleos de Venezuela SA, or PDVSA, ahead of a July 28 regulatory deadline.“PCEC is in close negotiations for approval to operate two oil fields,” company spokesperson Joe Householder said in a text message.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe fields are part of the Petrodelta joint venture in eastern Venezuela, according to people familiar with the impending deal who weren’t authorized to speak publicly about it. PDVSA would hold a majority stake in Petrodelta, with PCEC holding a minority share but with control over operations, the people said.PCEC, based in Orcutt, California, declined to specify the assets under negotiation. The company is part of a group of wildcatters that are pushing for deals in Venezuela to reinvigorate its production after years of neglect, vaulting ahead of more established oil majors.PCEC, which specializes in reviving older fields, used to produce oil in California but has curtailed much of the operations in its home state as part of its land gets repurposed into housing. Large oil producers prefer to do extensive due diligence before taking the plunge on investments, especially in a country like Venezuela that’s still subject to some US sanctions. The speed with which the South American country aims to move is making it hard for them to keep up with the wildcatters. The Venezuelan government, in turn, is under pressure from the Trump administration to approve deals quickly to ramp up production. In a meeting with numerous industry chambers in Caracas on Friday, Venezuelan oil officials insisted that all contracts must be signed by the July 28 deadline, generating unease among companies that are still engaged in sensitive negotiations, the people said. While deals can be legally signed after that date, some attractive fiscal terms of the government’s contract structures could change.Another US firm, Lionheart Capital, said this week it signed a non-binding letter of intent for a $400 million deal for a stake in another Venezuela oil field. Petrodelta has a long history of false starts and controversy. PDVSA’s previous partner was DP Delta Finance BV, once led by Venezuelan mogul Oswaldo Cisnernos, who died in 2020. His widow Mireya Blavia-Cisneros and their children are now looking after his interests.DP Delta Finance didn’t respond to a request for comment.Venezuela’s oil ministry revoked DP Delta Finance’s minority participation in the venture in May, alleging that the company failed to fulfill investment commitments and production plans, according to two people with knowledge of the situation and documents seen by Bloomberg.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.DP Delta Finance has questioned the legality of the oil ministry’s move to rescind its contract. People close to the company allege that the government is giving preference to US businesses in its rush to overhaul energy contracts under a new hydrocarbons law and associated regulations.Neither the oil ministry nor PDVSA replied to requests for comment. Cisneros had entered into Petrodelta in 2016 after acquiring the minority share from Harvest Natural Resources and Argentina’s Pluspetrol, extending a $1.13 billion loan to boost oil production. Cisneros, at the beginning of the venture in 2016, pledged to triple output to 115,000 barrels a day. Petrodelta produced almost 9,000 a day as of July, according to PDVSA data seen by Bloomberg.DP Delta Finance has said it wasn’t duly notified of the Venezuelan government’s investigation in violation of due process. It said the joint venture was impacted by force majeure events, including PDVSA’s lack of investment, a pandemic-related market crash and US sanctions, which impeded both partners’ ability to finance operations and reach production targets. As with other partners, DP Delta Finance entered into an agreement with PDVSA to finance the state-owned company’s contributions to the joint venture. Despite negotiations through the years, PDVSA hasn’t paid back what the company says it owes. PDVSA’s total debt with DP Delta Finance, which also includes financing, structured notes and dividends, add up to more than $1 billion, one of the people said, including $770 million in crude sales through June 2026.(Updates with Lionheart deal in ninth paragraph)Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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