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Venezuela takes over US oil projects
Financial Times ^ | June 26 2007 | Benedict Mander

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.


TOPICS: Business/Economy; Foreign Affairs
KEYWORDS: conoco; energy; exxon; oil; venezuela

1 posted on 06/26/2007 10:36:18 PM PDT by Attention Surplus Disorder
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To: Attention Surplus Disorder

Chavez may be right; maybe it is time for war if they can steal our oil fields/projects.


2 posted on 06/26/2007 10:38:29 PM PDT by Finalapproach29er (Dems will impeach Bush in 2008; mark my words.)
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To: Attention Surplus Disorder

F*ck the socialists. CLear out the americans and bomb all existing infrastructure


3 posted on 06/26/2007 10:38:59 PM PDT by pissant
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To: Attention Surplus Disorder
If President Bush is the “puppet” of the oil companies that the left says he is, there’ll be an invasion of Venezuela in the next six months, right? Otherwise that theory doesn’t hold much water, does it?
4 posted on 06/26/2007 10:39:29 PM PDT by 2ndDivisionVet (Fred Thompson/John Bolton 2008)
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To: Attention Surplus Disorder
Chavez in my estimation is bigger trouble than Castro and a hell of a lot richer.

This low life scumbag of a tin horn dictator means to make trouble for the US at every turn.

5 posted on 06/26/2007 10:43:21 PM PDT by OKIEDOC (Kalifornia, DUNCAN or THOMPSON 08, ELECTION 2008, MOST IMPORTANT OF MY LIFE TIME)
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To: Finalapproach29er

Big oil can afford more direct “negotiations” with Chavez...


6 posted on 06/26/2007 10:45:32 PM PDT by DB
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To: Attention Surplus Disorder

Time to confiscate all Venezuelan assets under US control.


7 posted on 06/26/2007 10:45:48 PM PDT by sourcery (Double Feature: "The Amnestyville Horror" and "Kill the Bill, Vol. 2")
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To: Attention Surplus Disorder
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.

Yep, but try telling that to a Banana Republic dictator...

8 posted on 06/26/2007 10:48:58 PM PDT by DTogo (I haven't left the GOP, the GOP left me.)
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To: Attention Surplus Disorder

Geez, and people thought Pat Robertson was crazy when he mentioned the need for an assassination on Chavez.


9 posted on 06/26/2007 10:50:11 PM PDT by diverteach
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To: OKIEDOC
This low life scumbag of a tin horn dictator means to make trouble for the US at every turn.

Yep .. but he can also hang himself at the same time .. which I predict will eventually happen .. though just not soon enough

10 posted on 06/26/2007 10:50:22 PM PDT by Mo1 ( http://www.gohunter08.com)
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To: Attention Surplus Disorder
That's the result of our business leaders' and politicians' policy of trying to win over communist regimes with money. Why elect another president who'll follow the same policy? We need an administration that's more attentive to defense and a strong USA..
11 posted on 06/26/2007 11:37:39 PM PDT by familyop (cbt. engr. (cbt.)--has-been, in favor of Duncan Hunter for Pres.)
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To: Attention Surplus Disorder

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 .


12 posted on 06/26/2007 11:38:56 PM PDT by Neu Pragmatist
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To: Attention Surplus Disorder

“You build it; we take it. Simple, eh, gringo?”


13 posted on 06/27/2007 12:38:17 AM PDT by snarks_when_bored
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To: Attention Surplus Disorder

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


14 posted on 06/27/2007 12:59:52 AM PDT by I still care ("Remember... for it is the doom of men that they forget" - Merlin, from Excalibur)
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To: sourcery

Yep. Hold Citgo assets in reserve for repayment of seized US assets.


15 posted on 06/27/2007 1:05:57 AM PDT by D-fendr
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To: Attention Surplus Disorder
I am so disappointed in BIG, EVIL OIL. They let some two bit third-world hack steal from them and do nothing! They should at temporarily reassign some of the hitmen that take out 100MPG carb inventors to go after Chavez.

Sigh...

16 posted on 06/27/2007 4:06:00 AM PDT by AmericaUnited
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To: Attention Surplus Disorder

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.


17 posted on 06/27/2007 4:13:07 AM PDT by period end of story (You're an Errand Boy, sent by Grocery Clerks, to collect a Bill.)
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To: Attention Surplus Disorder
Yet there are Americans who continue to buy CITCO products. CITCO is the retail outlet for Venezuela's’s oil sales in the U.S.

If you support Hugo, buy CITCO.

18 posted on 06/27/2007 4:18:26 AM PDT by R.W.Ratikal
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To: R.W.Ratikal
retail outlet for Venezuela's’s oil sales in the U.S.

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.

19 posted on 06/27/2007 6:04:03 AM PDT by thackney (life is fragile, handle with prayer)
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