PDVSA Said to Consider Lower Orinoco Venture Stakes for Hong Kong Listing

Petroleos de Venezuela SA is considering a plan to sell part of its stakes in Orinoco heavy crude joint ventures in a private placement on the Hong Kong stock exchange, according to a company official.

The state-owned oil producer, which has held at least 60 percent of each Orinoco venture since President Hugo Chavez nationalized the oil industry in 2007, may reduce its stakes to as little as 51 percent, the official, who isn’t authorized to speak publicly, said today in Caracas. China’s Citic Securities Corp. is advising on the potential listing, the official said.

PDVSA will use proceeds from the deal to invest in the development of the Orinoco belt, one of the world’s largest oil reserves, he said. The operation would not be considered a privatization, as shares will be offered in a holding company created to manage PDVSA’s stakes in the joint ventures and not in the state oil company itself, the official said.

PDVSA is studying the Hong Kong stock exchange because of investor demand in the region and the South American nation’s close political ties with China, according to the official. PDVSA may consider an initial public offering in the Orinoco ventures if the private placement goes well, the official said, without providing a time frame for the operation.

Citic, China’s largest state-owned investment company, is currently conducting due diligence to purchase a 10 percent stake in the Petropiar heavy crude project held with PDVSA and California-based Chevron Corp. (CVX), the official said. PDVSA does not need permission from its minority partners to sell, list, or reduce its stakes in the ventures, according to the official.

To contact the reporters on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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