ConocoPhillips, Exxon Mobil pass on Venezuela deals

ConocoPhillips, Exxon Mobil pass on Venezuela deals

Oil giants ConocoPhillips and Exxon Mobil Corp. are set to withdraw from their joint venture projects in Venezuela’s Orinoco basin.

The two companies refused to sign deals Tuesday that would see the Venezuelan government taking majority stakes in their Orinoco projects.

Four other oil majors, U.S.-based Chevron Corp.; Britain’s BP Plc; France’s Total SA; and Norway’s Statoil ASA — signed deals to accept minority shares in the oil projects under new terms set by President Hugo Chavez’s government.

The six companies have invested more than $17 billion in the Orinoco projects.

Under the deals, the stakes held by Petroleos de Venezuela SA, or PDVSA, the Venezuelan state oil company, in the four Orinoco joint ventures rose to an average of 78 percent, from previous stakes ranging from 30 percent to 49.9 percent.

Venezuelan Oil Minister Rafael Ramirez said PDVSA is assuming ownership of ConocoPhillips and ExxonMobil’s stakes in the Petrozuata, Ameriven and Cerro Negro heavy oil projects, and taking control of the companies’ remaining oil interests in the country, including ExxonMobil’s 50.1 percent stake in the La Ceiba block currently under development. ConocoPhillips was developing the Corocoro offshore oil field with Italy’s Eni SpA, but PDVSA will take a 74 percent stake there with Eni holding the remainder.

Withdrawing from the Orinoco projects means Dallas-based Exxon Mobil will no longer have any oil interests in Venezuela, but Houston-based ConocoPhillips will maintain a 50 percent share in the country’s Deltana Platform natural gas projects, according to Elogio Del Pino, a director of PDVSA.

Venezuela “has an informal agreement to continue talking” with Exxon Mobil and ConocoPhillips about the terms of finalizing their involvement in the heavy crude projects, Ramirez said.

Published June 26, 2007 by the Houston Business Journal

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