VENEZUELA: Venezuela's Oil Minister says that other OPEC countries have expressed solidarity with Venezuela in its legal fight with Exxon Mobil

Record ID: 343466

  • Title: VENEZUELA: Venezuela's Oil Minister says that other OPEC countries have expressed solidarity with Venezuela in its legal fight with Exxon Mobil
  • Date: 14th February 2008
  • Summary: (BN04) CARABOBO, VENEZUELA (FILE) (REUTERS) VARIOUS OF PDVSA OIL REFINERIES
  • Embargoed: 29th February 2008 12:00
  • Keywords:
  • Topics: Industry
  • Reuters ID: LVA2OZ7PF3XY9HHLR1W298STYXSL
  • Story Text: Venezuela's Oil Minister says that other OPEC countries have expressed solidarity with Venezuela in its legal fight with Exxon Mobil.
    Venezuelan President Hugo Chavez stopped oil exports to Exxon Mobil Corp <XOM.N> on Tuesday (February 12), escalating a multi-billion dollar fight with the U.S. company two days after threatening to cut off all supplies to America.
    The anti-U.S. president's retaliation for Exxon's legal offensive, which froze $12 billion in Venezuelan assets, pushed oil prices higher in late trading.
    Venezuelan oil minister Rafael Ramirez said fellow OPEC members had expressed solidarity with the South American nation in its legal fight with Exxon Mobil <XOM.N> over the freezing of its state oil company's assets.

    "We met with the OPEC legal team and we are counting on their assessment on how to confront this situation," Ramirez said.
    "Immediately, a situation of solidarity was created because once again, an oil-producing nation exercising sovereign activities finds itself being assaulted by companies like Exxon Mobil."
    State oil company PDVSA said it broke off commercial ties and halted the supply of crude and petroleum products to America's largest company in a fight over Exxon's demand for compensation after Chavez seized a crude project last year.

    "Faced with the legal-economic harassment started by Exxon Mobil against PDVSA and as an act of reciprocity, PDVSA has decided to suspend commercial relations," the Venezuelan company said in a statement.
    Venezuela is the No. 4 energy supplier to the United States, which is its biggest customer.
    Washington has played down Chavez's threat, industry analysts say it is unlikely he will carry it out and even his deputy energy minister said Venezuela wanted to avoid a general cutoff because it would be costly for the OPEC nation.
    But after regularly issuing conditional warnings over ending exports to what he calls the evil superpower, Tuesday's albeit limited move was the first time Chavez has taken any concrete action over supplies following a threat.
    PDVSA said it would not break certain contracts with Exxon, an apparent reference, analysts said, to the jointly owned Chalmette refinery in Louisiana.
    Venezuela's other sales to Exxon in November were about 90,000 barrels per day, a drop in the bucket for the world's largest oil company.
    With two thirds of its oil exports going to the United States, industry analysts believe Chavez is unlikely to carry out his supply threat because it would slash revenue he uses to fund the social programs that underpin his popularity.
    The Exxon battle pits Chavez, a leading proponent of resource nationalism who calls capitalism an evil, against one of the world's largest companies seeking access to increasingly restricted oil deposits around the globe.
    Chavez, a self-styled socialist revolutionary who clashes with Washington over everything from oil prices to democracy, says Exxon is a proxy in a U.S. economic war against him..
    It was not immediately clear whether PDVSA would still supply some crude to Chalmette or what it would do with the excess crude that would normally go to Exxon Mobil.
    Exxon Mobil said it will act to ensure supply to its clients.
    Earlier on Tuesday, Exxon said it was interested in holding substantive talks to negotiate fair compensation for seizure of a project based in one of the world's largest oil deposits.
    Exxon, which reported the highest-ever operating profit by a U.S.
    company last quarter, began extracting oil from Venezuela in the early 20th century.
    In recent days state television has repeated clips of the Exxon Valdez oil spill, overlaid with animated scenes of drops of oil turning into blood.
    Exxon produced an average of 4.253 million bpd in the fourth quarter on 2007, far higher than Venezuela's output.
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