Posted on 04/03/2006 7:16:44 PM PDT by Aussie Dasher
President Hugo Chavez has tightened his grip on Venezuela's energy resources, following through on threats to punish international companies that resist government control of the nation's oil fields.
Venezuela seized two oil fields from France's Total SA and Italy's Eni SpA after the companies failed to comply with a government demand that operations be turned over to state oil company Petroleos de Venezuela SA, or PDVSA, Oil Minister Rafael Ramirez said Monday.
"Those two companies resisted adjusting to our laws," he said at a news conference. "Those fields return to total, absolute control by Petroleos de Venezuela."
Until PDVSA took control of the oil fields Saturday, Total and Eni had operated them under contract. Some other companies, including Exxon Mobil Corp., decided to sell their stakes among the 32 Venezuelan oil properties rather than go along with the new terms.
Ramirez, asked if companies that resist will be forced out of Venezuela, replied: "We don't have a veto against any company here." But he added: "Companies that don't adjust to our laws, we don't want them to continue in the country."
Venezuela's weekend seizures were the first as part of Chavez's effort to draw more revenue from companies pumping crude in the South American country.
Private oil companies had run 32 oil fields in Venezuela independently under contract with the government. But Venezuela demanded last year those contracts be changed into so-called "mixed company" joint ventures that give PDVSA a minimum 60-percent stake.
Many companies have accepted the new terms without a fight, apparently betting the ventures would still be profitable even with a larger share of revenue going to the state.
Venezuela has been emboldened to take a harder line due to rising oil prices, political instability in the Mideast and Nigeria, and new buyers in Asia. Light sweet crude for May delivery rose 11 cents to settle at $66.74 a barrel Monday on the New York Mercantile Exchange.
Ramirez said 20 companies, including Spanish-Argentine Repsol YPF, Royal Dutch Shell PLC and China National Petroleum, representing 25 oil fields have signed on to the new legal framework to create joint ventures. Another five oil fields were voluntarily returned to PDVSA after companies with stakes decided to turn them over rather than operate them as joint ventures. Ramirez declined to say if those companies, which include Repsol and Japan's Teikoku Oil Co., would be compensated financially.
The new joint ventures will allow PDVSA to save $31.34 billion over the next 12 years, PDVSA director Eulogio del Pino told reporters. Under the old contracts, PDVSA was forced to buy oil from the companies at five times the cost of extraction.
Total spokeswoman Patricia Marie told The Associated Press that PDVSA had rejected an alternate offer made by the company for its 30,000 barrel-a-day Jusepin oil field in eastern Venezuela.
"We didn't migrate the field ... and PDVSA took it," Marie said by phone from Total's Paris headquarters.
Ramirez said it was "unacceptable" that Total had made an offer demanding a higher stake just 15 minutes before it was supposed to sign on to the new joint ventures at a ceremony Friday. Under a previous 1993 agreement, PDVSA had awarded Total a 55 percent stake in oil pumped at Jusepin, with BP PLC holding 45 percent.
Ramirez said BP will be compensated with an increased stake at a separate field.
Meanwhile, Italy's Eni SpA protested PDVSA's seizure of the Dacion oil field and said it expected to be compensated for a "violation of contract rights."
PDVSA told the company that its contract had been terminated and that it would appoint personnel to manage operations at the site, Eni said in a statement. "It is Eni's intention to offer PDVSA a period of time in which a full reparation of Eni's contract rights can be agreed," it said.
Eni, which had a 100-percent stake in the field, said it would take legal action if an agreement could not be reached.
"We're ready to go to the celestial court if they want but, of course, companies that come here with litigation and confrontation will not be invited" to join future projects, Ramirez said. "We at least have the right to choose our partners."
The Venezuelan government also claims Eni and Total owe millions of dollars in unpaid taxes.
Some companies have sold their stakes instead of facing the changes, including Irving, Texas-based Exxon Mobil, which sold its holdings in the 15,000-barrel-a-day Quiamare-La Ceiba field in December to its partner, Repsol.
Norway's Statoil ASA said Monday it, too, had sold its 27 percent share in the LL 652 oil field in Lake Maracaibo to PDVSA.
Those companies, as well as Total, retain other investments in Venezuela.
Hehe, it is rather amusing.
It is pretty funny and there is actually a simple reason why it is. All the easy to get oil in the western world we have already pumped out. The US actually began with about the same oil reserves as Saudi Arabia!
So all the really backwards places in the world are where the oil is left. And by oil I mean the conventional oil that you just drill down and pump out. There is lots of oil in shale, tar sands, deep sea drilling, coal liquification etc.
They're "going along to get along" - not to worry. This news item from last Friday:
~~~
" ... President Hugo Chavez said Friday his government will sign the agreements with foreign oil companies later in the day. He thanked the transnational companies that operate in Venezuela for their willingness to cooperate.
Most affected companies, including Houston-based Conoco Phillips, France's Total SA, U.S.-based Chevron Corp. and Norway's Statoil ASA, were expected to sign the agreements in a later ceremony. ..."
~~~~
"There is some joke GOD is playing on all of us. We have the Jihadist Muslims in the Middle East, Russian Jihadist Muslims, Socialist in Mexico and Venezuela, and Muslims Jihadist in North Africa, all sitting on the majority of the worlds oil. Something is just not right with that picture?"
And all the fifth columnist, treasonous, seditious home grown, left wing Jihadists right in out own midst.
Seems like a lot of people forgot that in becoming the best country in the world, the US avoided tyrants and dictators. Now we have the moonbats actually trying to install them.
.......It would sort of be nice if those foreign companies at least blew up the facilities before leaving.......
Perhaps the French company has the word from Chirac that Venezuela will be invaded by French commandos to hold the French oil assets. ;)
Nothing so radical is necessary. There aare ways to make things not work so well--or ever again without a refit, and still preserve most of the infrastructure.
Chavez better watch out or the French are going to take their case to the U.N.!
Or, perhaps some significantly less effective, but typical, French move.
SOmething like this happened in Libya in the 1950s iirc. It is not the first time.
That's communism. Expect it to happen more.
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