Malaysia's Petronas to PDVSA: Buh-bye

Don't call us. We'll call you.
Don’t call us. We’ll call you.

Malaysia’s Petronas is withdrawing from the Petrocarabobo oil fields in the Orinoco Heavy Oil Belt, citing irreconcileable differences with the government. The money quote from the Reuters piece:

“One source close to the project told Reuters that frequent changes in the fiscal framework, disagreements with the government of Chavez’s successor – Nicolas Maduro – about the business terms, and long delays led to the decision to withdraw.”

Petronas had already dished out $1.05 billion, and was expected to dish out an additional $1 billion to finance PDVSA’s stake in the project. Curiously, Petronas has not found a buyer for its stake in the project.

The other interesting aspect of this withdrawal is that Malaysia was building a refinery that would be fed by the Orinoco crude. By withdrawing, Malaysia is signalling that it does not believe the project will come to fruition.

This rupture is all the more curious given how Malaysia and Venezuela share a particular dislike for dissenters.

NOTE: I’ll be in Barcelona (Spain) the next two weeks, so I won’t be blogging. If there are any readers in the area that want to meet up, send me an email to nageljuan at gmail dot com.