Chevron: Venezuela Talks Now Will Influence Long-Term Presence

HOUSTON Mar 13, 2007 (Dow Jones Newswires)

Ongoing negotiations between Chevron Corp. (CVX) and Venezuela's national oil company will influence whether and how the U.S. oil major operates in the South American country going forward, Chief Executive Dave O'Reilly said Tuesday.

O'Reilly was asked during a New York analyst meeting about the company's "appetite" for additional investment in Venezuela, given moves by Venezuela to seize operating control of oil and gas projects from international oil companies.

"Our appetite will very much depend on how we're treated in the current negotiation," O'Reilly said. "How we're treated in that process is going to have a direct impact on our appetite going forward."

Compared with Exxon Mobil Corp. (XOM) and other energy majors, Chevron has been fairly conciliatory toward efforts by Petroleos de Venezuela S.A. (PVZ.YY), or PdVSA, to exert greater authority over the industry. O'Reilly's comments suggest the U.S. company is beginning to run out of patience.

Chevron holds a 30% stake in the heavy-oil Hamaca project, accounting for 37,000 barrels a day of oil for the U.S. oil giant, Chevron Executive Vice President George Kirkland said Tuesday.

At the meeting, Chevron repeatedly pointed to the impact of Venezuela's move last year - to assert operatorship over some other oil fields in the country - on Chevron's production forecast.

Kirkland said Chevron's 2007 production would be 90,000 barrels a day less due to changes in Venezuela, a major factor in the company's difficulty in meeting all of its production targets set out earlier.

Copyright (c) 2007 Dow Jones & Company, Inc.


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