Venezuela Min: No Plans for Cash Payment for Orinoco Projects


Orinoco Heavy Oil Belt
(Click to Enlarge)
CARACAS May 03, 2007 (Dow Jones Newswires)

Venezuela is not considering a cash payment to compensate foreign oil companies for their nationalized assets, the oil minister said early Thursday.

"We do not expect to disburse money so we can reach an agreement with these companies," Oil Minister Rafael Ramirez said in a televised interview on state television, referring to oil upgraders in the Orinoco river basin. "We're still discussing the numbers, the economic agreements."

Ramirez made the comments when he was asked if Petroleos de Venezuela, or PdVSA, would use part of the $7.5 billion obtained through a bond issue to cover the costs of compensating companies. Part of that money, he said, would go to enhance operations in these upgraders, but compensation is another matter.

On Tuesday Venezuela's government took over control of four heavy-crude upgraders located in the Orinoco river belt but PdVSA has yet to determine how it will compensate companies for those assets. So far Ramirez has said the state will only recognize the book value of the investments these companies made in the area.

Companies operating the upgraders have signed memoranda of understanding agreeing to reduce stakes in each venture and are expected to continue talks with the government until June 26. The state expects to have worked out the minority stakes and a compensation deal by then.

Oil companies operating in the area include Exxon Mobil Corp. (XOM), Total SA (TOT), Chevron Corp. (CVX), Statoil (STO) BP PLC (BP) and ConocoPhilips (COP).

Chavez took control of heavy crude ventures as part of a nationalization program he unveiled early in the year. He has also nationalized the entire electricity industry and the country's largest phone carrier, businesses he considers strategic for the country's economic development.

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

Related Companies
 Company: BP plcmore info


 - From a Little-Known Shale Play in New Mexico, BP Gets a Gusher (Aug 7)
 - Big Oil Seen Vulnerable to Fresh Slump Despite Growth at $50 (Aug 2)
 - BP's West Africa Partner Kosmos To List In London By End-September (Aug 2)
 Company: Exxon Mobil Corporationmore info


 - Exxon Misses Estimates as Cuts Fail to Offset Output Declines (Jul 28)
 - Exxon Fined for Russia Sanctions Violations Under Tillerson (Jul 20)
 - ExxonMobil Says Will Drop Discussions Over Indonesia's East Natuna (Jul 18)
 Company: Statoilmore info


 - Norway's Record July Gas Sales Could Lift Statoil Earnings (Aug 18)
 - European Oil Majors Seek To Harness US Offshore Wind (Aug 1)
 - Statoil Scales Down Exploration Plans For 2017 (Jul 27)
 Company: Total S.A.more info
 - Natref Refinery To Reach Full Output This Weekend After Disruption (Aug 4)
 - Big Oil Seen Vulnerable to Fresh Slump Despite Growth at $50 (Aug 2)
 - Total Beats 2Q Expectations Helped By Strong Cash Flow, Costs Cuts (Jul 27)
 Company: ConocoPhillipsmore info


 - Conoco To Start Dismantling Historical Norwegian Oil Platform (Aug 17)
 - ConocoPhillips Trims CAPEX After Posting Quarterly Loss (Jul 27)
 - ConocoPhillips to Sell Barnett Assets for $305 Million (Jun 29)
 Company: Chevron Corporationmore info
 - Glencore, Chevron Enter Mexico's Recently Opened Fuel Market (Aug 17)
 - Jacobs Expands MSA for Chevron's US Refineries, Terminals (Aug 9)
 - Nigeria's State Oil Company Signs Deals With Chevron, Shell (Aug 3)
 Company: PDVSAmore info


 - Venezuela's Oil Company Says 'Financial Blockade' Hurts Payments (Aug 18)
 - No-Name US Oil Driller Gets Shot at World's Top Reserves (Aug 9)
 - Rosneft Says Lent Venezuela's State Oil Firm A Total Of $6B (Aug 8)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
United States Conroe: Associate Bit Repair Technician - Sr. Bit Repair Tech
Expertise: Logistics Management|Materials Management |Supply Chain Management
Location: Conroe, TX
 
US Alvarado, Texas: Senior Order Correspondent
Expertise: Logistics Management|Materials Management |Supply Chain Management
Location: Alvarado, TX
 
Contract Administrator
Expertise: Contracts Administration
Location: Houston, TX
 
search for more jobs

Brent Crude Oil : $52.72/BBL 3.31%
Light Crude Oil : $48.51/BBL 3.01%
Natural Gas : $2.89/MMBtu 1.36%
Updated in last 24 hours