Honduras temporarily grabs Exxon, Chevron terminals

Honduras temporarily grabs Exxon, Chevron terminals

Honduras will take temporary control of foreign-owned oil storage terminals as part of a government import program meant to drive down fuel prices, President Manuel Zelaya said late on Saturday.

Zelaya ordered the move after failing to reach a deal with big oil companies Exxon Mobil and Chevron , as well as local company DIPPSA, to rent the terminals.

“It is not a nationalization, it’s a temporary use of the storage tanks through a lease and payment of a reasonable price,” he said.

Honduras produces no crude of its own and no longer has a refinery. Its fuel market, like that of most Central American countries, is dominated by Shell, Exxon Mobil and Chevron.

The government program takes control of imports away from the small group of oil companies that operate service stations in the Central American nation. Those companies have opposed the new system, saying it is anti-competitive.

A congressional commission set up to study the new system has said it could save Honduras — one of the poorest countries in the Western Hemisphere — about $66 million a year.

Zelaya, a logging magnate, said the decree will allow the government to go ahead with a deal reached in November with Conoco Phillips (NYSE:COP – News) to import at least 8.4 million barrels of gasoline and diesel a year.

Exxon Mobil and Chevron could not immediately be reached for comment.

A spokesman for an oil companies group in Honduras, Mario del Cid, warned on Sunday the imposition would hurt the country’s reputation among investors.

“Investment is based on clear rules, and decisions of this kind are not a good message,” he told Reuters.

Oil companies in Honduras imported some $900 million worth of fuel in 2005.

Foreign oil companies’ operations in Honduras are much smaller than in Venezuela, where President Hugo Chavez said on Saturday the country’s entire energy sector had to be nationalized, reinforcing his socialist revolution.

He said Venezuela was “almost ready” to take over the foreign-run oil projects of the Orinoco Belt run by heavyweights such as Chevron, Conoco Phillips and Exxon Mobil, that produce about 600,000 barrels per day.

(Additional reporting by Nick Zieminski in New York)

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