TotalEnergies Seeks Exit From Venezuelan Gas Projects

(Bloomberg) -- TotalEnergies SE is negotiating an exit from its natural gas operations in Venezuela, just months after the French energy giant closed its oil business in the country. 

The company is pulling out of its majority stake in YPergas SA, a joint venture in central Guarico state that produces around 50 million cubic feet of gas per day, according to four people with direct knowledge of the negotiations. Sucre Energy, a private equity group with offices in Caracas, entered into talks within the last month to buy Total’s stake, according to the people. 

Sucre, an oil and gas holding company that has the backing of medium-size European and Asian funds, has been seeking to enter the energy sector by picking up assets for cheap, one person said. Prices have fallen over the past five years as major oil players left, the person said.

Sucre bought a 70% stake in the gas joint venture Gas Guarico from Inpex Corp. last year as well as its participation in the oil venture Petroguarico. 

Representatives from Total and Sucre declined to comment about the negotiations. Neither Venezuela’s oil ministry nor representatives of state-owned Petroleos de Venezuela SA responded to messages seeking comment. 

A sale of the YPergas stake would signal an end to Total’s investments in Venezuela, where it has operated since the 1990s. In December, Total and Norway’s Equinor ASA returned to the government a license for an offshore natural gas project in eastern Venezuela, one of the people said. The companies were not producing any gas at that field, part of the Deltana Platform near the maritime border with Trinidad and Tobago. That decision also marks the exit for Equinor in Venezuela.

YPergas is a privately held project in which Total owns a 69.5% stake, followed by Spain’s Repsol SA, which has 15%, and two Venezuelan companies. 

Many foreign investors have pulled out of Venezuela’s energy industry, which finds itself in a dire situation after decades of mismanagement, brain drain, and, lately, the weight of U.S. sanctions. The decisions by Total and Equinor further weaken the foothold of European energy majors in the gas business, which had been seen as vital to the country’s push to grow exports. Other European oil and gas firms such as Repsol and Eni SpA remain in the country. 

Total and Equinor last year transfered their stakes in the Petrocedeno oil operations to PDVSA, pulling out of a business they had been in since the 1990s. The decision on gas operations stems from a change in business strategies, the people said, without elaborating. 

Equinor did not respond to messages seeking comment. 

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