Halliburton writes off Venezuelan investment

April 24, 2018
In another sign of deterioration of Venezuela’s oil and natural gas industry, Halliburton Co. is writing down its remaining investment in the economically distressed member of the Organization of Petroleum Exporting Countries. 

In another sign of deterioration of Venezuela’s oil and natural gas industry, Halliburton Co. is writing down its remaining investment in the economically distressed member of the Organization of Petroleum Exporting Countries.

The country’s production, according to the US Energy Information Administration’s April Short Term Energy Outlook, averaged 1.5 million b/d in March, 24% down from a year earlier. EIA cited “economic and political instability.”

The March output level is nearly 500,000 b/d below Venezuela’s implied quota under OPEC’s supply-management agreement in effect since the beginning of last year.

Halliburton said it based its decision to take a charge against first-quarter earnings of $312 million net of tax on “recent changes in the foreign currency exchange system in Venezuela and continued devaluation of the local currency, combined with US sanctions and ongoing political and economic challenges.”

The charge included $151 million of receivables, $53 million of fixed assets, $48 million of inventory, $13 million of other assets, and $47 million of accrued taxes.

Halliburton said it is “maintaining its presence in Venezuela and is carefully managing its go-forward exposure.”

Service companies have been trimming their operations in Venezuela for several years because of payment problems (OGJ Online, Apr. 13, 2016).