OPEC Supports Venezuela In Exxon Row

Libya's top oil official, Shokri Ghanem, Wednesday said the Organization of Petroleum Exporting Countries stood squarely behind member country Venezuela in its row with U.S. oil major Exxon Mobil Corp. (XOM) over contracts and assets.

"We don't think Venezuela should be treated this way and we are going to look at this. There is solidarity with Venezuela, of course. Venezuela is an OPEC member," Ghanem told Dow Jones Newswires from Tripoli. Ghanem, who is head of the Libyan National Oil Co., said he was speaking for himself and some other ministers he'd spoken to recently.

Ghanem said OPEC was likely to discuss Venezuela's dispute with ExxonMobil when the 13-nation producer group meets March 5 in Vienna to review its production policy. He cautioned though that OPEC was unlikely to move to cut any output as a result of the spat.

The dust-up between Venezuela and ExxonMobil has lingered for well over a year but came to a boil last week after ExxonMobil won court orders in the U.K. and other countries freezing $12 billion in overseas assets of state-run Petroleos de Venezuela SA, or PDVSA.

ExxonMobil's action seeking the court order followed the Venezuelan government's move last year to take a majority stake in four Western oil company ventures, including ExxonMobil's.

"I think Venezuela will introduce a report at the OPEC meeting and we'll talk about the details," Ghanem said. "We are going to look at what happened because I think the decision by courts was unfair."

The courts' suspension of PDVSA assets prompted Venezuelan President Hugo Chavez to vow to cut off oil shipments to the U.S. The country followed through on that threat in the past day to a small extent by halting shipments to ExxonMobil and suspending commercial ties with the company.

But analysts say Venezuela is unlikely to halt shipments to the U.S. because the U.S. consumes more than half of all Venezuelan oil exports and the country needs all the oil revenues it can get to bankroll Chavez's ambitious social programs. Oil revenues make up the bulk of Venezuela's state finances.

Ghanem said it was too early to speculate what OPEC might do at its March 5 meeting, saying the group had plenty of supply and demand data to review. OPEC, whose members supply around 40% of the 87 million barrels consumed daily globally, agreed to keep its production unchanged when it met earlier this month.

Copyright (c) 2008 Dow Jones & Company, Inc.


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