Sulzer denies plan for new Venezuela business

Swiss contractor Sulzer says it has no plans to engage in new business activities in Venezuela, refuting assertions by Venezuelan government officials that the firm will repair refineries in exchange for heavy oil products.

"Sulzer is not currently engaged in any new business in Venezuela, beyond older contracts that are currently stopped pending overdue payments from PDVSA. Sulzer, a Swiss company traded in Zurich, is in compliance with all applicable sanctions and regulations," Sulzer said, alluding to US financial and oil sanctions on the Opec country.

Officials from Venezuela's oil ministry, presidential palace and state-owned oil company PdV told Argus yesterday that Sulzer would help to repair PdV's refineries in a barter arrangement.

PdV would pay for the downstream services with the supply of asphalt, fuel oil and petroleum coke, the officials said.

Consulted again this morning, the Venezuelan officials said talks with Sulzer have been underway since May.

The deal would complement a separate downstream agreement with China's Wison Engineering. Wison has not commented on its barter contract as recently outlined by Venezuelan officials.

Russian group Renova holds a 48.83pc stake in Sulzer, leading to speculation that Caracas is seeking to leverage Moscow's political support for the government of President Nicolas Maduro to resuscitate its refining industry. Russia and China are Maduro's chief international backers.

PdV has nameplate refining capacity in Venezuela of 1.3mn b/d, but almost all of it is inoperable because of a lack of maintenance, spare parts and feedstock.

The crippled refineries together with sanctions have dried up most fuel supply in Venezuela, aggravating the country's severe economic crisis.

Although the US sanctions on Venezuela have no formal secondary component, Washington has leaned on other countries to curtail or terminate business with the Maduro government, which most western countries deem illegitimate. They recognize Venezuelan National Assembly president Juan Guaido as interim head of state instead.

Traditionally neutral Switzerland formally recognizes only states, not governments, but a foreign ministry spokesperson said the authority of the democratically elected assembly "must be respected and the safety of its members and of its President, Juan Guaidó, must be guaranteed."

Sulzer is among a myriad of contractors, creditors and arbitration claimants that are owed billions of dollars by Venezuela's government and PdV.