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| US firms 'reject' Venezuela deal |
| Two of the world's largest oil companies have reportedly rejected a deal that would keep them working in Venezuela's most important oil field.
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| UNITED STATES OF AMERICA
, 26-June-2007
10:11:27 AM |
| The government is taking over majority control of operations in the Orinoco Belt, as it extends state control.
Sources at the state-owned oil firm, PDVSA, say they have been unable to agree with ConocoPhillips and Exxon Mobil about their future role.
President Hugo Chavez set Tuesday as a deadline for foreign firms to agree.
In May, Venezuela's nationalised oil company, PDVSA, took over control of exploration projects in the Orinoco Belt, which had been among the last privately-run fields in the country.
See a map of the oil fields, projects and companies affected
It is the country's most important oil area, with massive potential.
There are proven reserves of at least 80 billion barrels, but there could be enough there to make Venezuela the world's biggest source of oil.
President Chavez has demanded that private companies hand over majority control to the state as part of a nationalisation drive.
The six international firms working there have had little choice, but there has been intense negotiation over compensation, says the BBC's James Ingham in Caracas.
Nationalisation drive
Sticking points have included asset valuation, compensation for lost value and rules about decision-making in the future joint ventures, industry officials told Reuters news agency.
The fields are worth at least $25bn, according to Matthew Shaw of Wood Mackenzie.
It is reported that four of the six companies have come to an agreement and will stay. These are Chevron Corp, Norway's Statoil, BP and France's Total.
Total is the only one so far to publicly confirm that it will sign a deal.
But with Tuesday's deadline to finalise arrangements approaching, ConocoPhillips and Exxon Mobil had not yet struck a deal.
This could mean that they will leave Venezuela altogether - although the head of Exxon Mobil, Rex Tillerson, has said that he expects negotiations to continue beyond the deadline.
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