Conoco Could Reach Deal With Venezuela This Year

ConocoPhillips could reach a settlement with Venezuela over its nationalized assets some time this year, Chief Executive Jim Mulva said Wednesday, adding that the oil giant has a normal business relationship with the South American country.

"We continue to have routine meetings where we negotiate the issues," Mulva told Dow Jones Newswires on the sidelines of the company's annual analyst meeting. "We hope we can reach an amicable settlement sometime this year."

Speaking later at a press conference, Mulva said the company continues to have a "normal business relationship" with Venezuela, in which Venezuela's state-owned oil company, Petroleos de Venezuela SA, or PdVSA, provides feedstock for ConocoPhillips' refineries on the U.S. Gulf Coast. The relationship is also normal in the joint venture ConocoPhillips has with PdVSA, the Sweeny Refinery in Texas, Mulva said.

ConocoPhillips and ExxonMobil Corp. abandoned their assets in June after the Venezuelan government changed the contractual terms of international oil companies operating in the Orinoco Belt and gave majority ownership to PdVSA. Both oil giants filed a request for international arbitration last year.

ExxonMobil subsequently secured court orders in the U.K., among other countries, to freeze PdVSA's international assets, which it claims is necessary to ensure it will get paid for the loss of the project and future revenue if an international court rules in its favor. Venezuela reacted by suspending oil exports to ExxonMobil last month.

Mulva declined to disclose the amount of compensation ConocoPhillips is seeking for its assets and said he preferred not to comment on recent speculation that the company will accept Venezuela's Citgo refining assets in the U.S. as compensation.

The Houston-based company took a charge of $4.5 billion last year related to its exit from Venezuela.


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

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