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Harvest Talks to Sell Venezuela’s Petrodelta in Early Stages

March 15 (Bloomberg) -- Harvest Natural Resources Inc. is in “early” stages of talks to sell its stake in the Petrodelta joint venture in Venezuela, Chief Executive Officer James Edmiston said.

Any decision to sell its 32 percent stake in the joint venture with Petroleos de Venezuela SA will be economic and strategic, Edmiston said on a conference call today. The company can’t provide more information about the potential buyer or time frame due to a confidentiality agreement, he said.

“There will be no fire sale,” said Edmiston. “Current negotiations are at an early stage.”

Harvest climbed the most in four years on March 6 after announcing it was in talks to sell the Venezuelan assets. The company has had trouble getting regular payments from PDVSA, as its Caracas-based venture partner is known, and its assets in the South American country are undervalued because of political risk, John Malone, a senior analyst at Global Hunter Securities LLC in New York, said on March 6.

“The bond market seem to have a fairly bullish view of the Venezuelan environment given the recent run they’ve had, there seems to be a bit of disconnect there to me,” said Edmiston.

Venezuelan bonds have rallied this year with increasing investor appetite for high-yield assets and higher probability of political change before October presidential elections. President Hugo Chavez faces a unified opposition candidate as he battles cancer.

PDVSA has a 60 percent stake in Petrodelta and Vinccler CA is the other owner. The venture produced 32,548 barrels a day in the fourth quarter of 2011, a 24 percent increase from a year earlier, Edmiston said.

“Currently Petrodelta is producing about 33,000 barrels of oil per day or about 6 percent above the 2011 average,” he said.

Harvest rose 3.1 percent to $7.99 at the close in New York. The shares have gained 8.3 percent this year.

To contact the reporter on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net

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

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