Chevron Exec: Interested in Mexico, Working Closely with Pemex

HOUSTON (Dow Jones Newswires), May 7, 2009

Chevron Corp. has been partially paid by Venezuela for its share of oil ventures there, and the oil giant is working with the government of President Hugo Chavez to resolve the issue, a top executive said Thursday.

"We have been paid some (money)," Ali Moshiri, president for Chevron Africa and Latin America exploration and production told reporters. "We are working with the government of Venezuela on the payment issue."

Moshiri added that Chevron, a major producer in Venezuela, understands the economic downturn caught various governments by surprise but the company hopes the lack of payment won't become a bigger problem.

Since oil prices tumbled in the second half of 2008, state-owned Petroleos de Venezuela SA, or PdVSA, has come under pressure to cover operating costs. Oil service companies and drilling firms have slowed operations in the Andean country, and some have ceased operating equipment there until they are fully paid.

Moshiri also said the Obama administration made the right decision in improving relations with Cuba. If laws are changed to allow U.S. oil companies to do business with Cuba, Chevron "will definitely take a look at it," he said.

The Obama administration recently eased restrictions dealing with Cuba, allowing Cuban-Americans to visit family members on the island nation and send money there.

Cuba said late last year that oil reserves in its part of the Gulf of Mexico are twice as big as U.S. estimates - totalling some 21 billion barrels. In April, Spain's Repsol-YPF and Cuba announced they will proceed with scheduled offshore drilling this year. So far, though, U.S. oil companies haven't asked Washington for more access to Cuba's offshore oil.

Regarding Mexico - a country that bars private firms from owning or selling Mexican crude - Moshiri said Chevron is closely monitoring the progress being made regarding the country's oil reform. "We are working very closely with Pemex providing input," Moshiri said. "The success of Mexico oil and gas reform will be the success of the United States."

Oil is a highly politicized topic in Mexico, a country that nationalized foreign oil firms in 1938. The state has a monopoly on hydrocarbon ownership, but President Felipe Calderon hopes to attract private investment through fee-based service contracts that offer certain incentives if projects are completed ahead of schedule. The oil reforms implemented so far, though, don't let Pemex sign production-sharing agreements with outside firms.

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