Total, Eni, Statoil Refuse Partnership with PDVSA
French oil firm Total (NYSE: TOT), Italy's Eni (NYSE: ENI) and Norway's Statoil (NYSE: STO) have declined to sign contracts with Venezuela to enter into joint ventures led by state oil firm PDVSA to operate different oilfields, Venezuelan government and company officials told BNamericas, confirming local press reports.
Sixteen oil companies signed accords with Venezuela's energy and oil ministry on Friday agreeing to convert their operating agreements into JVs, which gives PDVSA at least 60% control over the operations.
However, Total, Eni and Statoil were not satisfied with the terms.
"We declined to sign, the terms didn't please us," a Total official told BNamericas on Monday. As a result PDVSA has seized control of Total's Jusepin field in Monagas state, the official said.
Jusepin is the largest standard crude operation in Latin America with almost 400,000 barrels a day (b/d) output. Total had been operating Jusepin for more than a decade.
PDVSA also terminated Eni's operating service contract on the Dacion field in Anzoategui state and all management of the operations must be transferred to PDVSA personnel, Eni said in a statement.
"Eni will comply with PDVSA's request by ensuring activities are handed over in a professional way and at an agreed time. However, Eni believes this action by PDVSA is a violation of Eni's contract rights," the statement said.
If an agreement cannot be reached, Eni said it would pursue "legal action to claim its rights."
The 16 companies that did sign agreements with PDVSA were Spain's Repsol YPF (NYSE: REP), the UK's BP (NYSE: BP), Japanese firm Teikoku, the local unit of Canada's PetroFalcon (TSX: PFC) Vinccler Oil & Gas, local firms Suelopetrol, Inemaka and Open, Brazil's federal energy company Petrobras (NYSE: PBR), China's CNPC, US-based Chevron (NYSE: CVX), Anglo-Dutch major Shell (NYSE: RDS-B), Argentina's CGC, fellow Argentine firm Tecpetrol, France's Perenco, US-based Harvest (NYSE: HNR) and France's Hocol, Venezuela's state news agency ABN reported.
These companies produce a combined 200,000b/d of crude in Venezuela. The largest operation is Chevron's Boscan field with 100,000b/d of production, mostly for asphalt manufacture.
Venezuela's President Hugo Chavez ordered oil companies in operating agreements with PDVSA to accept the new JV agreements by the end of last year or face having their fields seized by PDVSA. Chavez has justified the move by saying the operating agreements were too expensive for PDVSA to maintain.
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