Veneuzela vows to eject Conoco if resists takeover
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| Published on Friday, May 4, 2007 |
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By Saul Hudson
CARACAS, Venezuela (Reuters): Venezuela threatened on Thursday to eject ConocoPhillips from the OPEC nation if it further resists President Hugo Chavez's plans to nationalise its multibillion-dollar investments in the massive Orinoco reserve.
The government also underlined its tough negotiating stance against ConocoPhillips and the five other companies whose assets are takeover targets, ruling out paying cash compensation or buying the debt they took on to develop the Orinoco projects.
ConocoPhillips was the only company that refused to sign an accord with Venezuela to transfer operations of the four heavy crude upgrading projects to the state, although it did join the others in carrying out the actual handover on Tuesday.
It appears to be on the same legal standing as the others, but politically it faces much stiffer negotiations as the companies, some of the world's largest, seek to strike a deal over their future participation in the projects.
"There is a conflict with a company that opposes us," Oil Minister Rafael Ramirez told state television. "If this company, ConocoPhillips, or any other company does not accept the terms ... they will have to leave the country."
ConocoPhillips's defiance in not signing the largely symbolic document over the takeovers last month has infuriated Venezuelan officials. They say they have now demoted ConocoPhillips to the lowest priority in their talks .
Exxon Mobil , Chevron Corp. , Norway's Statoil , Britain's BP Plc and France's Total are also involved in the projects that can produce 600,000 barrels per day.
Industry analysts say the value of the four projects is above $30 billion but Ramirez stressed he estimated their book value at only $25 billion.
NO CASH, NO DEBT
Chavez is popular for lavishing oil revenue on the majority poor and his offensive against Big Oil resonates with many voters who felt previous administrations looked after the companies' profits more than their needs.
The president decreed the two-stage nationalisation in February as part of a drive to take over large swathes of the economy with the goal of turning the fourth-largest exporter of oil to the United States into a socialist state.
The man who calls Cuban leader Fidel Castro his mentor ordered Tuesday's operational transfer and gave the companies until June 26 to reduce their ownership so that the state can take at least 60 percent in the projects.
Industry analysts say most of the companies want to stay because high oil prices should still allow them to return a profit and because they want to keep a foothold in Venezuela, which has the largest reserves outside the Middle East.
The companies have said negotiations hinge on the compensation they will receive for losing their investments.
But armed with a presidential decree, Ramirez wants to dictate the negotiating terms.
The minister, who said Venezuela will take a 100-percent stake in the projects if talks break down, ruled out buying what he said was $4 billion in debt that the companies have taken on for the projects.
"It has been said we are going to buy that debt. We are not going to buy that debt," Ramirez told state television, adding that the government had no intention of making any cash payment to compensate the companies.
"We do not expect to spend anything to reach an accord," he said. | | | | Reads : 135 | | | |
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