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Citing Sanctions, Halliburton Pulls Out of Venezuela

By Rich Smith – Apr 24, 2020 at 4:35PM

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Expropriation of its assets seems likely.

Schlumberger, Chevron, and even Russia's Rosneft seemingly want nothing to do with Venezuela and its sanctioned, oil-soaked economy, now that Venezuela's economy is falling apart ... and oil prices are going down.

Today, yet another huge name in the oil patch announced that it is shuttering its Venezuelan operations, with oilfield services giant Halliburton (HAL 2.62%) announcing that in response to new U.S. Treasury Department regulations covering companies doing business in Venezuela, it will be shuttering its business in the country.  

Map with Venezuela under a magnifying glass

Image source: Getty Images.

In a 10-Q filing with the SEC today, Halliburton informed shareholders that the Treasury Department has "prohibited" it from "performing activities associated with: (a) the drilling, lifting, or processing of, purchase or sale of, or transport or shipping of any Venezuelan-origin petroleum or petroleum products; and (b) the design, construction, installation, repair, or improvement of any wells or other facilities or infrastructure in Venezuela or the purchasing or provision of any goods or services, except as required for safety."  

Halliburton confirms that the restrictions cover "the majority of our operations in the country."

Consequently, Halliburton says it "will cease our primary operations in Venezuela." Moreover, "it is unlikely that we will be able to remove our assets that remain in Venezuela and those assets may be expropriated."

About the only good news is that: "Since we have previously written down all of our investment in Venezuela and have maintained limited operations in this country ... we do not expect the expiration of the license to have a material adverse effect on our business, consolidated results of operations and consolidated financial condition."

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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