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India’s Jindal Abandons Oil Venture With Venezuela’s PDVSA

The Petroleos de Venezuela SA (PDVSA) El Palito refinery in El Palito, Venezuela, on Wednesday, March 9, 2022. The prospect that the U.S. could ease sanctions on Venezuela's state oil producer to offset Russia's cutoff from global markets has observers wondering how much crude the South American nation is able to add to a market roiled by the war in Ukraine. Photographer: Manaure Quintero/Bloomberg (Manaure Quintero/Bloomberg)

(Bloomberg) -- Jindal Power Ltd. is walking away from a venture that would have operated an oil-processing facility for Venezuela’s state-controlled crude producer, according to people familiar with the matter.

India’s Jindal is exiting the deal under which it would have overseen one of Petroleos de Venezuela’s key installations for producing and processing heavy-crude oil for export, said the people, who asked not to be named discussing non-public information.

Despite the deal’s collapse, Jindal continues to operate Venezuela’s largest iron-ore complex, a project it has led since late 2023. 

The unraveling upgrader agreement is illustrative of PDVSA’s difficulties finding deep-pocketed partners to help revive Venezuela’s crude industry amid domestic political turmoil and crippling US sanctions.

Jindal didn’t respond to requests for comment. A spokesperson for PDVSA declined to comment. 

Jindal agreed in May to partner with PDVSA in the Petrocedeno venture located in the the oil-rich Orinoco Belt. For Jindal, the $300 million plan to renovate upgrading equipment and make other improvements represented its first foray into the oil sector.

But the companies failed to reach a final agreement on control of the operation, the people said. Petrocedeno’s oil fields reached a maximum output of 160,000 barrels a day in the mid-2000s.

--With assistance from Lou Del Bello.

©2024 Bloomberg L.P.