Venezuela: Contracts Could Be Canceled if Output Demands Not Met

CARACAS - Venezuela's government could revoke contracts of 10 small partner companies in the nationalized oil industry if they fail to meet the state's demands to increase production, Oil Minister Rafael Ramirez told reporters Friday.

The government, which has laid out ambitious plans to raise production capacity over the next several years, wrote to all of its partners in November 2010 calling on them to boost output.

"At this moment we have identified 10 companies with problems, four of which are very critical," Mr. Ramirez said. "I'm going to make the call again. If they don't complete the plans then I will have to go to the National Assembly and say that these companies are not fulfilling what they promised," he said, warning that those not meeting their targets could have their contracts canceled.

The minister declined to name the companies but said that "they are very small" and include some that produce no more than 30 barrels a day.

"Time is up. I hope that the companies come and talk to us," Mr. Ramirez said.

He added that large partners like U.S. oil major Chevron Corp. (CVX) and China National Petroleum Corp. (CNPC.YY) have already responded to the government's demands and now he is waiting for the smaller companies to follow suit.

Under late President Hugo Chavez, who died in March, Venezuela's government revised contract terms with its oil partners to give the state a larger claim on oil projects. Some companies like ConocoPhillips (COP) and Exxon Mobil Corp. (XOM) rejected the new terms and are now seeking billions in compensation from Venezuela through international arbitration courts.

Copyright (c) 2012 Dow Jones & Company, Inc.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Attorney I
Expertise: Contracts Administration|Legal
Location: Houston, 
 
US Houston: Sr. EDI Logistics Specialist (Electronic Data Interchange)
Expertise: Logistics Management
Location: Houston, TX
 
Community Relations Manager Job
Expertise: Legal|PR / Corporate Communications|Project Management
Location: Red Wing, MN
 
search for more jobs

Brent Crude Oil : $55.49/BBL 2.45%
Light Crude Oil : $52.42/BBL 2.04%
Natural Gas : $3.2/MMBtu 5.04%
Updated in last 24 hours