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Venezuela seizes control of oilfields | Quote: | Venezuela seizes control of oilfields
NATALIE OBIKO PEARSON, Caracas
Venezuela has seized control of oilfields from French and Italian multinationals in a show of force against those resisting efforts by Hugo Chavez, the president, to pry more profits from the industry.
The move signals Chavez's government is ready to send oil giants packing unless they play by Caracas's new rules, but experts say the tactic could backfire by spooking partners Venezuela needs to develop potentially some of the world's largest untapped reserves.
Rafael Ramirez, the oil minister, announced that Petroleos de Venezuela SA (PDVSA), the state oil company, had taken control of Total's Jusepin field and Eni's Dacion field, which together produced 115,000 barrels a day, after the French and Italian companies refused to turn over operations to state-controlled joint ventures.
In challenging the government, they join Exxon Mobil, which earlier sold its stake in the 15,000-barrel-a-day Quiamare-La Ceiba field rather than submit to tightened terms.
The dissenters are among the six largest oil companies.
Ramirez remained resolute. "We're not going to trample over anybody but we can't accept being trampled on either," he said. "Companies that don't adjust to our laws, we don't want them to continue in the country."
The seized properties were among 32 oilfields the government has reclaimed from private firms by cancelling their oil-pumping contracts and replacing them with so-called "mixed companies" that give PDVSA a 60% to 80% stake and sharply raise royalties and taxes.
"It's sent a very negative sign," said Juan Carlos Sosa Azpurua, an energy consultant.
Patrick Esteruelas, analyst at Eurasia Group, said Venezuela was taking a risk by playing hardball with the oil giants as "a decline in oil prices and/or the emergence of new opportunities elsewhere could force current players to reassess".
Companies representing 25 fields, including Chevron Corp. and Royal Dutch Shell, have signed on to the joint ventures. Four others, including Spanish-Argentine Repsol and Japan's Teikoku Oil, returned five fields but kept stakes in more profitable ones. Norway's Statoil sold PDVSA its stake in a field rather than agree to a joint venture.
Venezuela has been emboldened by rising oil prices, political instability in the Middle East and Nigeria, and new buyers in Asia.
But Sosa warned Venezuela may lose on its gamble: "At the end of the day, it's harmful. There will be no more additional investments."
The impact on future investment could prove critical at a time when Venezuela is seeking to develop its vast reserves in the Orinoco tar belt.
The region is estimated to hold 236 billion barrels of extra-heavy oil, which if commercially viable, would make Venezuela home to the world's largest crude oil reserves. However, developing those deposits requires big oil's expertise and technology.–AP |
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wisnaeme
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Ripe for a right wing coup?.
Oh dear,I do hope President Hugo Chavex doesn't have the same misfortune and suffer terminal illness through lack of breathing as did a former, deceased president of another South American country. Didn't Chile suffer the same fate by having a US corporate engineered right wing coup imposed apon it? No doubt Dubya's pals are working on a solution that will be in the "best interests" of all concerned.Aye,that right wing coup in Chile caused untold misery and bloodshed for the poor folk of that country and it has not quite recovered from it.Still isn't it is a source of comfort to know that "oor pals" US foreign policy is very consistent judging from past and present events? Aye,right enough. I do hope Mr Chavex has a good life insurance policy for his next of kin which will be sadly,little compensation for his,erm "lack of breath"in the future.This unfortunate and "unforeseen" occurrence will have absolutely nothing to do with oil.Isn't that right Mr Dubya?
PS. Naw,ah have nae spelt yer man's name wrang by mistake,jist a pun.
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