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INVESTMENTS IN NON-CONSOLIDATED AFFILIATES
 9 Months Ended
Sep. 30, 2012
INVESTMENTS IN NON-CONSOLIDATED AFFILIATES  
INVESTMENTS IN NON-CONSOLIDATED AFFILIATES

6.  INVESTMENTS IN NON-CONSOLIDATED AFFILIATES

 

We own a minority interest in WilPro Energy Services (PIGAP II) Limited (“PIGAP II”) and WilPro Energy Services (El Furrial) Limited (“El Furrial”), joint ventures that provided natural gas compression and injection services in Venezuela. In March 2009, these joint ventures recorded impairments on their assets due to lack of payments from their only customer, PDVSA. Accordingly, we reviewed our expected cash flows related to these two joint ventures and determined in March 2009 that the fair value of our investment in PIGAP II and El Furrial had declined and that we had a loss in our investment that was not temporary. Therefore, we recorded an impairment charge of $90.1 million ($81.7 million net of tax) to write-off our investments in PIGAP II and El Furrial. In May 2009, PDVSA assumed control over the assets of PIGAP II and El Furrial and transitioned the operations of PIGAP II and El Furrial, including the hiring of their employees, to PDVSA. In March 2011, PIGAP II and El Furrial, together with the Netherlands’ parent company of our joint venture partners, filed a request for the institution of an arbitration proceeding against Venezuela with ICSID related to the seized assets and investments, which was registered by ICSID in April 2011.

 

In March 2012, PIGAP II and El Furrial completed the sale of their assets to PDVSA Gas. We received an initial payment of $37.6 million in March 2012, and received installment payments totaling $4.8 million and $9.5 million in the three and nine months ended September 30, 2012, respectively. We are due to receive an additional approximately $65.3 million in quarterly cash installments through the first quarter of 2016. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize quarterly payments received in the future as equity in (income) loss of non-consolidated affiliates in our condensed consolidated statements of operations in the periods such payments are received. In connection with the sale of the PIGAP II and El Furrial assets, the WilPro joint ventures and our joint venture partners have agreed to suspend their previously filed arbitration proceeding against Venezuela pending payment in full by PDVSA Gas of the purchase price for the assets.