VENEZUELA: Venezuela signs accord with foreign oil companies on nationalisations

Record ID: 343892

  • Title: VENEZUELA: Venezuela signs accord with foreign oil companies on nationalisations
  • Date: 26th April 2007
  • Summary: (SOUNDBITE) (Spanish) VENEZUELAN OIL MINISTER RAFAEL RAMIREZ SAYING: "There are lapses, there are deadlines. The first of them will be over next Tuesday, May 1, when Venezuela, with oil executives of Venezuela acting as intermediaries, will take over oil fields that right now are affected by the nationalization law. The meeting today has to do with that. Today we are signi
  • Embargoed: 11th May 2007 13:00
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  • Topics: Industry
  • Reuters ID: LVAAMGPKH3645WSKFCRJ73FOLKLB
  • Story Text: Oil companies meet officials in Venezuela to put in motion a large nationalisation plan of oil reserves. Major player Conoco Phillips is among the few who doesn't sign.
    Venezuela signed agreements on Wednesday (April 25) with nearly all the foreign oil companies involved in multibillion-dollar projects targeted for takeover in the vast Orinoco oil reserve.
    Oil executives from various countries met with Venezuela's oil minister Rafael Ramirez to sign papers agreeing to turn over control to Hugo Chavez' government.
    Ramirez said the first term will be completed on May 1.
    "There are lapses, there are deadlines. The first of them will be over next Tuesday, May 1, when Venezuela, with oil executives of Venezuela acting as intermediaries, will take over oil fields that right now are affected by the nationalization law. The meeting today has to do with that. Today we are signing forms of agreement to transfer the operations that are now in the hands of the associations and the profit sharing agreements via PDVSA," he said.
    The government plans to hold a ceremony with fanfare to mark the operations handover in what Chavez says is Venezuela reclaiming its sovereignty on the day leftists around the world celebrate workers' rights.
    Ramirez went on to say that ten of the 13 companies involved had signed, but Conoco Phillips and Eni Dacion had not.
    "Of the 13 companies that are involved, ten of them have signed the agreement. We think that the process is developing in accordance with the timeline established by law and will be a success. Conoco Phillips has not signed. Eni Dacion has not signed. And we are ready act in accordance with the law on May 1," the oil minister said.
    Exxon Mobil, Chevron, Britain's BP Plc, France's Total and Norway's Statoil signed an accord to hand over their operations on May 1 to the OPEC nation.
    The companies also have until June 26 to negotiate over the terms and conditions of the nationalized projects in which they can remain minority partners.
    But the oil minister complained about Conoco's negotiating tactics and warned that their refusal to sign a deal meant the U.S. company was less likely than the others to remain in its projects.
    The takeovers pit the fifth-largest oil supplier to the United States against some of the world's largest companies and involve four projects valued in total at over $30 billion that can produce up to 600,000 barrels per day.
    Leftist President Hugo Chavez in February decreed that the projects be converted to joint ventures with a majority held by state oil company PDVSA as part of a nationalization drive meant to advance his self-styled socialist revolution.
    Industry analysts say they expect most companies to work out a way of remaining as partners because Orinoco is one of the world's largest reserves and high oil prices allow them to return profits.
    Conoco is the only company to be involved in two of the Orinoco projects, holding 50.1 percent of Petrozuata and 40 percent of Hamaca.
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