You have commented 339 times on Rantburg.

Your Name
Your e-mail (optional)
Website (optional)
My Original Nic        Pic-a-Nic        Sorry. Comments have been closed on this article.
Bold Italic Underline Strike Bullet Blockquote Small Big Link Squish Foto Photo
Submit your comments on this article
Caribbean-Latin America
Chavez warns major oil firms
2007-06-25
Some major oil companies operating in Venezuela have rejected the terms for the enforced takeover of part of their operations by the state, the president says. Hugo Chavez said late on Friday that if they did not accept the nationalisation deals ahead of Tuesday's deadline, they would be told to leave.
Just about time to emplace the primers and fuses.
Venezuela's state oil company plans to take at least a 60 per cent share in four projects in the oil-rich Orinoco belt. Currently it has an average of about 40 per cent. "It seems there are some transnational companies that do not want to accept [the terms]," Chavez said in a speech. "Well if they do not want [to accept the terms], I told the minister to tell them they can go, that they should leave, that we, in truth, do not need them," he said after a meeting with his energy minister to review the progress in negotiations.

"PDVSA [state oil company] is capable, we can do it, and we have enough allies in the world, we are not alone. We have plenty of allies in the world to make progress in the Orinoco oil belt."
Allies include the Iranians and Chinese.
Exxon Mobil, ConocoPhillips, Chevron Corp, Norway's Statoil, Britain's BP Plc and France's Total are the companies operating the targeted projects, which are valued at more than $30bn and are capable of producing 600,000 barrels a day. But Chavez, who is on a drive to nationalise large areas of the economy, did not say which ones had rejected the state's terms.

Earlier on Friday, Rafael Ramirez, the energy minister, told reporters he knew which companies would leave due to the nationalisation, although he did not name them. Venezuela has previously said that Conoco had been resisting the plan and Exxon's negotiations have been difficult, according to sources close to the talks. The government has given the companies until Tuesday to agree to the terms of takeover of their assets in one of the world's biggest oil reserves.

The takeover was set in motion by a presidential decree on May 1 which set Tuesday's deadline and gave a further two months for the legislature to review the terms of the deals.
Posted by:Steve White

#11  Hell, he's already screwed his country, Glen.
Posted by: Barbara Skolaut   2007-06-25 22:23  

#10  The most effective methods of developing the Orinoco ultra-heavy crudes require doing it in coordination with conventional crude production. If Hugo forces deferral of the Orinoco developments and depletes the conventional fields prematurely, which could be what goes down, then he has pretty effectively screwed himself and his country.
Posted by: Glenmore   2007-06-25 21:43  

#9  Meanwhile the conventional oilfields will get rapped and go into a speedier decline. If figure the Chineese will eventually be able to do something with the Orinco Belt, but by the time they do ooooooogo will be gone and a another caudilo will be in his place selling out to Brazil.
Posted by: Shipman   2007-06-25 20:35  

#8  JohnQC,
No inside info on what the oil companies will do. I can't see them making further major capital investments in this political climate. Chavez seems to be demanding such in return for not totally nationalizing oil company investments. Since I think he's serious, it looks like we'll probably repeat 1975. I fully expect China to provide him the needed capital and technical assistance he needs to more-or-less maintain his oil fields. He'll lose in the bargain, though he doesn't yet realize it. Western companies work relatively short-term, have serious limits on what tactics they can employ, and will actually negotiate. The Chinese work long-term, will be ruthless if they feel the need, and will use negotiation only as a cover. They will OWN Chavez, and he will say 'How high?' when they say 'Jump.'
Just my opinion.
Posted by: Glenmore   2007-06-25 19:12  

#7  We can hope Glenmore. Cuba is an anachonism. Venezuela is joining the club.

Glenmore, what do you know about the oil companies in Venezuela? Will they bail on Chavez?
Posted by: JohnQC   2007-06-25 18:03  

#6  Well, the ones who voted for him anyway. They have their pride on the line.
Posted by: gorb   2007-06-25 16:25  

#5  JohnQC,
Like the Cubans turned on Fidel? It's been a long wait. So far.
Posted by: Glenmore   2007-06-25 14:57  

#4  I gather they think Hugo isn't too long for this world and that his successor will be more reasonable.

I am a thinking this too. Probably the people will turn on him once everything gets too screwed up.
Posted by: JohnQC   2007-06-25 14:43  

#3  One of the companies absorbed by Chevron over the last few decades was Gulf Oil. Gulf had a huge presence in Venezuela in the 1940's and 50's. They were nationalized out in the mid 1970's.
Posted by: Glenmore   2007-06-25 10:57  

#2  I can tell you one of them: Chevron. I've got a good friend working for them who told me they've no intention of ponying up anything to Hugo; they'll simply pull up stakes and leave. I gather they think Hugo isn't too long for this world and that his successor will be more reasonable.
Posted by: Mac   2007-06-25 09:27  

#1  But Chavez, who is on a drive to nationalise large areas of the economy, did not say which ones had rejected the state's terms.

Hmm. Seems he's playing them against each other because he's got a weak hand. I'll bet several if not all of them are telling him to shove it. Good.
Posted by: gorb   2007-06-25 04:05  

00:00