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Secrecy And Confusion Surround Venezuelas Latest Oil Deals

Pietro Donatello Pitts
December 22, 2016/ 14:00

Washington. Venezuela’s newly created and military run oil and mining company Camimpeg has formed a joint venture with UK-based Southern Procurement Services (SPS) to reactivate shut-in wells in Lake Maracaibo in Zulia state.

The deal has raised eyebrows, given its scale and the relative inexperience of the parties involved. A source with knowledge of developments and who has operations in the lake told NewsBase the well count could approach 1,500.

Given their lack of experience, questions have been asked about whether the JV partners have the requisite personnel or capital to pull off the work. Indeed, the fact the companies have even been allowed to team up is startling.

SPS and Camimpeg, which was created in February to protect petroleum installations belonging to state-run PDVSA, recently formed Camimpeg-SPS to “improve the oil and gas production process for PDVSA,” the JV tweeted last week.

In the most recent of only three press releases available in the news section on its website, England-based SPS, which is part of the SCZ Group financial group, reported that it was engaged in activities to supply “electric submersible pumps” as part of trade initiatives “to ensure increased productivity at Venezuelan oilfields”. It went onto say the company has “the firm intention to continue providing quality service to PDVSA.” No other SPS press releases talk about its dealings in Venezuela or any other countries.

Camimpeg was also created in part to provide oilfield services to PDVSA, with a view to it replicating the activity of companies like Schlumberger, Halliburton or Weatherford. But Venezuelan President Nicolas Maduro is believed to have created the rookie company, which is run by the armed forces, to keep the military happy and loyal as Venezuela’s economy collapses.

Camimpeg-SPS also recently signed a deal to acquire a fleet of vehicles that will be used to maintain a constant presence over PDVSA’s operating areas, reports Oilprice.com.

Financing for both deals is likely to come from SCZ Group, which provides “special financing mechanism that allows customers to pay for purchases of oil products, petrochemical industries and basic industries,” according to statements on its website.

SCZ Group, which has offices in Panama City, Miami and Hong Kong, is apparently headed by Venezuelan Manuel Chinchilla, who is also SPS’ chief, according to data obtained from his LinkedIn page and PDVSA press releases. SPS and PDVSA did not reply to emails seeking comment on the deal.

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