Halliburton Reports $148 mln Loss via PDVSA Note

 

Venezuelan state oil company PDVSA has built up more than $19 billion in debts to providers as it struggles with low oil prices and a decaying socialist economy, leading some leading service companies to slow operations.

 

PDVSA President Eulogio del Pino has said the company was discussing financing agreements with Halliburton, Weatherford International Plc and Schlumberger NV and was in talks to securitize provider debts.

 

Halliburton said in a quarterly earnings report that it exchanged $200 million in trade receivables for a promissory note through a financing agreement with its "primary customer in Venezuela."

 

It said it subsequently "recorded the note at its fair market value at the date of exchange, resulting in a $148 million pre-tax loss."

 

PDVSA and its subsidiaries are the only firms legally allowed to operate in Venezuelan oil fields.

 

PDVSA said in its 2015 earnings report that it had issued $831 million in promissory notes, which pay 6.5 percent interest and mature in 2019, to pay off providers.

 

It was not immediately evident if that sum includes the notes issued to Halliburton.

 

Industry analysts say that problems in payments to services providers are linked to reports of declining production at PDVSA. Del Pino has denied reports of declining production and insists service company debts are being resolved.