Posted on 06/26/2007 10:36:16 PM PDT by Attention Surplus Disorder
Venezuela takes over US oil projects By Benedict Mander in Caracas
Published: June 26 2007 20:22 | Last updated: June 27 2007 01:16
Venezuela’s state-owned oil company is taking over multibillion-dollar projects owned by ConocoPhillips and ExxonMobil, Rafael Ramirez, the country’s energy minister, said.
The action was being taken following a failure to agree the terms of a handover of operations in the oil-rich Orinoco belt, said Mr Ramirez.
The oil groups refused to sign an agreement on how the Venezuela’s state-owned oil company PdVSA would take majority control of heavy crude oil projects in the Orinoco belt, which are valued at a total of at least $25bn.
The loss of its Venezuelan operations would be a particular blow to ConocoPhillips. Its operations in the Orinoco belt were valued at about $6bn and accounted for about 10 per cent of the company’s reserve base and 4 per cent of its worldwide production.
Mr Ramirez said PdVSA was increasing its share in the four projects, which lie above some of he largest heavy crude oil reserves in the world, from an average of 40 per cent to 78 per cent.
Hugo Chávez, Venezuela’s president, announced the state takeover of majority control of operations in the Orinoco belt this year, along with the nationalisation of Venezuela’s largest electricity and telephone companies.
Mr Ramirez, who is also the president of PdVSA, said Chevron, Total, BP and Statoil had said they would sign agreements allowing them to continue operating in the area, which can produce 600,000 barrels of oil a day, a quarter of Venezuela’s output.
However, analysts said that both ExxonMobil and ConocoPhillips, which was the most exposed of the private companies in the Orinoco, refused to accept minority positions in the ventures for compensation that they considered to be below market value. The companies appeared still to be in talks with Venezuela over the handover.
Petro-Canada also pulled out of the country, saying: “We have decided not to migrate to the new commercial structure, so our working interest passes to the Venezuelan government.”
Analysts said the country needed the expertise of private companies. Venezuela’s oil industry has stagnated in recent years, with production falling 10 per cent during the past decade.
ExxonMobil said it was “disappointed that we have been unable to reach an agreement on the terms for migration to a mixed enterprise structure. However, we continue discussions with the Venezuelan government on a way forward.”
ConocoPhillips said it expected to take an impairment of about $4.5bn in the second quarter for its entire interest in its Venezuelan oil projects as negotiations continued with authorities over compensation for the company’s stake in the projects.
The Orinoco belt could contain 270bn barrels of oil, an amount that would leave Venezuela with the largest reserves in the world – above Saudi Arabia and Canada.
Chavez may be right; maybe it is time for war if they can steal our oil fields/projects.
F*ck the socialists. CLear out the americans and bomb all existing infrastructure
This low life scumbag of a tin horn dictator means to make trouble for the US at every turn.
Big oil can afford more direct “negotiations” with Chavez...
Time to confiscate all Venezuelan assets under US control.
Yep, but try telling that to a Banana Republic dictator...
Geez, and people thought Pat Robertson was crazy when he mentioned the need for an assassination on Chavez.
Yep .. but he can also hang himself at the same time .. which I predict will eventually happen .. though just not soon enough
Hugo couldn’t have picked a better time . He knows, just as the rest of our enemies know, that the administration and our politicians are devoting all of their resources and attention to passing the Amnesty bill .
“You build it; we take it. Simple, eh, gringo?”
Chavez is destroying his country. After watching Zimbabwe and Cuba it will be interesting to see how long oil wealth can hold off the slide into despair.
Just the same, the best are already fleeing. People WILL seek out freedom.
http://www.freerepublic.com/focus/f-news/1850947/posts
Yep. Hold Citgo assets in reserve for repayment of seized US assets.
Sigh...
I saw a video of him making a speech about this. I don’t know what he was saying but his arms were flailing, and he was gesticulating like a maniac.
He’ll get his one day.
If you support Hugo, buy CITCO.
As are most gasoline stations. The oil and the refined products are blended into our distribution system. Until we start producing more of our own resources, we will continue to fund Chavez and OPEC.
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