FILE PHOTO: A view of a gas station of the Venezuelan state-owned
oil company PDVSA in Caracas, Venezuela August 20, 2018. REUTERS/Marco
Bello
CARACAS (Reuters) - Venezuela’s opposition-run congress on Tuesday
issued a resolution calling deals between state-run oil company PDVSA
[PDVSA.UL] and U.S. and French companies announced this week illegal,
since they had not been sent to lawmakers for approval.
The body said the oilfield deals with France’s Maurel & Prom (MAUP.PA)
and little-known U.S. company Erepla violated article 150 of
Venezuela’s constitution, which requires that contracts signed between
the state and foreign companies be approved by the National Assembly, as
Venezuela’s congress is known.
“They are giving concessions that violate the law,” said lawmaker Jorge Millan, mentioning the two contracts.
Congress,
largely stripped of its power since the opposition took it over in
2016, is unlikely to be able block the deals from going forward. But the
rejection could create legal complications under a future government.
Maduro
is set to be inaugurated for his second consecutive term on Thursday
following a May vote considered a sham by the domestic opposition and
many foreign governments. A regional bloc of Latin American countries
last week called on Maduro, a protege of the late Hugo Chavez, not to
take office.
The deals are part of Maduro’s effort to reverse a
sharp decline in the OPEC nation’s crude output that has crippled its
economy. Erepla said it would invest up to $500 million in three fields,
while Maurel & Prom said it would invest up to $400 million for a
40 percent stake in an oilfield joint venture.
PDVSA did not
respond to a request for comment. Maurel & Prom did not immediately
respond to a request for comment outside of normal business hours in
France.
Weak trading slams Citigroup's revenue
A
spokesman for Erepla, registered in Delaware in November and part-owned
by a prominent Florida Republican donor and shipping magnate, said
Venezuela’s hydrocarbons law “allows PDVSA to contract with companies
like Erepla to execute field services without any additional approvals
required.”
Referring to the Erepla deal during the
congressional session earlier on Tuesday, Millan said that while PDVSA
referred to the agreement as an oilfield service contract, “the company
will be conducting oil exploration and production activities.”
Maurel
& Prom Chief Executive Michel Hochard said the company would act
“in accordance with the instructions given” by Maduro and Oil Minister
Manuel Quevedo, according to a statement attributed to him in a PDVSA
press release.
Reporting by Mayela Armas; Writing by Luc Cohen; Editing by Lisa Shumaker
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