Ramirez: Cerro Negro, Sincor Resisting Nationalization

Two of the Orinoco extra-heavy crude oil projects Venezuela's government aims to nationalize are resisting the move, energy and oil minister Rafael Ramirez said.

Venezuela's government now aims to nationalize the four Orinoco projects, which include E&P and crude-upgrading assets. The government said last week it only planned to nationalize upgrading assets.

"Cerro Negro is declaring force majeure, saying they will not be able to make deliveries to Chalmette. And Sincor is saying they want us to reconsider. But there is nothing to be negotiated," said Ramirez, who also heads state oil firm PDVSA.

A Cerro Negro official confirmed news of the force majeure to BNamericas, declining to offer additional detail. Chalmette, a refinery in Louisiana, processes Cerro Negro crude.

The companies made their position known in two letters to Ramirez's office. "We want to share these reactions from the foreign companies in the [Orinoco] belt with the whole country," Ramirez said.

Foreign oil companies that operate in the Orinoco projects will be allowed "minority stakes," Ramirez said, without specifying the size of the shares.

PDVSA subsidiary CVP will operate Orinoco after nationalization comes into effect, Ramirez said. CVP president Eulogio del Pino last year said his company was seeking a 60% minimum stake in Orinoco.

The Orinoco projects are capable of producing roughly 620,000b/d of extra-heavy crude in four projects: Ameriven, where state oil company PDVSA has 40%; Cerro Negro, where PDVSA has 41.67%; Sincor, where PDVSA has 38%; and Petrozuata, where the state company has 49.9%.

Sincor is the largest, with nearly 200,000b/d. Cerro Negro produces more than 100,000b/d.

Private-sector partners in Orinoco include ExxonMobil (NYSE: XOM), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Statoil (NYSE: STO), Total (NYSE: TOT) and BP (NYSE: BP).

Visit BNamericas to access our real-time news reports, 10-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.

Related Companies
 Company: BP plcmore info

 - Sources: BP Sells U.S. Crude Oil to Thailand, Australia for First Time (Oct 26)
 - Industry Must Be 'Stimulating, Challenging' to Inspire Millennials (Oct 25)
 - BLOG: Challenging Attitudes toward Sexuality in Oil, Gas (Oct 25)
 Company: Exxon Mobil Corporationmore info

 - Exxon CEO Doesn't See Supply Shortage Pushing Up Oil Prices (Oct 19)
 - ExxonMobil To Start Drilling First Liberia Well In November (Oct 19)
 - Norway Gas Plant Workers Agree Wage Deal, Avoid Strike (Oct 7)
 Company: Statoilmore info

 - Statoil Says Restarts Output At Statfjord A Platform After Fire (Oct 24)
 - Faroe to Increase CAPEX in 2017 (Oct 19)
 - Production Still Shut at Statfjord A Following Platform Fire (Oct 17)
 Company: Total S.A.more info
 - Airport Staff Involved In Total CEO Plane Crash Had Been Drinking (Oct 25)
 - Total Says Brazil Libra NW Prospect Holds 3-4 bln Barrels of Oil (Sep 29)
 - Oil Industry Welcomes Indonesia's Tax Reform, But Says It's Not Enough (Sep 23)
 Company: ConocoPhillipsmore info

 - ConocoPhillips Sues Venezuela's PDVSA, Calls Bond Swap 'Fraudulent' (Oct 7)
 - MedcoEnergi Acquires ConocoPhillips' Stake in South Natuna Sea Block (Sep 20)
 - Pertamina's Upstream Arm Produces 15% More Oil, Gas Than Planned (Sep 19)
 Company: Chevron Corporationmore info
 - Chevron Confirms Is In Discussions For Potential Bangladesh Sale (Oct 13)
 - Kidnapped Romanian Oil Engineer in Niger Delta Released (Oct 13)
 - Jefferies: OPEC Output Cut Unlikely (Oct 11)
 Company: PDVSAmore info

 - US Said to Be Closing In on PDVSA-Linked Seizures, Charges (Oct 25)
 - Venezuela PDVSA Swaps $2.8B 2017 Bonds, Gains Financial Breather (Oct 24)
 - Ex-Venezuela PDVSA Boss Denies $11B Corruption Allegations (Oct 20)
 Company: Petrozuatamore info
 - PDVSA Underscores Pricing of Tender Offer for Petrozuata Project Bonds (Sep 12)
 - Ramirez: Cerro Negro, Sincor Resisting Nationalization (Jan 17)
 - Orinoco Projects Ordered to Cut Shipments (Jan 17)
 Company: Sincormore info
 - Total in Fresh Talks with Venezuela on Expanding Ops (Jan 30)
 - Total Production Increases Along with Rising Oil Prices Q4 2007 (Feb 13)
 - Venezuela: Sincor Officially Transformed into a Mixed Company (Feb 8)
 Company: Cerro Negromore info
 - Ramirez: Cerro Negro, Sincor Resisting Nationalization (Jan 17)
 - Orinoco Projects Ordered to Cut Shipments (Jan 17)
 - Fitch Explains Rationale Behind Downgrade of Venezuela's Heavy Oil Projects (Jul 6)

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Production Engineer
Expertise: Production Engineering
Location: Houston, TX
Senior Client / Program Manager
Expertise: Geologist|Reservoir Engineering
Location: Seattle, WA
Senior Sales Representative - Oil and Gas
Expertise: Corrosion Engineering|Petroleum Engineering|Sales
Location: Harvey, LA
search for more jobs

Brent Crude Oil : $50.79/BBL 1.30%
Light Crude Oil : $49.96/BBL 1.10%
Natural Gas : $2.77/MMBtu 2.12%
Updated in last 24 hours