Dentons advises NSE on acquisition of oilfield interest in Venezuela
Dentons has advised Canadian company New Stratus Energy (NSE) on the acquisition of an indirect interest in GoldPillar International Fund SPC (GoldPillar), as well as GoldPillar’s acquisition from Corporación Venezolana del Petróleo (CVP), a subsidiary of Petróleos de Venezuela (PDVSA, Venezuela’s state oil company), of a 40% equity interest in Petrolera Vencupet (Vencupet), a joint venture holding the rights to exploit and produce oil from four oil fields.
The oil fields are: (i) Adas; (ii) Lido; (iii) Limón; (iv) Leona; (v) Oficina Norte and (vi) Oficina Central, located in the states of Anzoátegui and Monagas in Venezuela. The remaining 60% of Vencupet’s shares belong to CVP. These fields are producing areas that require rehabilitation and infrastructure investments and have produced more than 60,000bpd of medium crude oil.
NSE plans to make significant investments to upgrade, rehabilitate and bring into operation the 246 wells located in the various fields, which together cover an area of 794.2 square kilometres.
The operation includes (i) a revolving credit facility to Vencupet for four years for a total amount of around US$600 million; (ii) the structuring of mechanisms for repayment of principal and interest on the financing, as well as monetisation of production, through the nomination of crude oil and products for export whose revenues will be managed by a third party with instructions to distribute funds for the payment of taxes and royalties, repayment of financing, operating costs and distributions to shareholders, among others; and (iii) the contracting of services to NSE subsidiaries and the assignment to Vencupet of NSE’s specialised personnel.
Jorge Neher, partner at Dentons, and lead counsel for the transaction commented: ” the acquisition of NSE’s interest in Vencupet was structured in a similar manner to PDVSA’s recent transactions with the most important international investors in the Venezuelan hydrocarbons sector, which ensures its legal, operational, and financial viability. Transactions such as this one, with innovative structures, will surely open spaces for new international investments in the sector. Our ability as a firm to coordinate efforts from different jurisdictions and specialties for the structuring and documentation of this deal has been fundamental for its successful outcome”.
Dentons’ multi-jurisdictional team in the Colombian, Venezuelan, Canadian, US and BVI offices was led by partner Jorge Neher (pictured) and was joined by director Carlos Vicioso and associate Ana Restrepo. Dentons Venezuela’s team was led by partner Natalija Vojvodic.
