Venezuela takes over two oilfields

Hugo Chavez, Venezuela's president, has tightened his grip on the country's energy resources, following through on threats to punish international companies that resist government control of the nation's oilfields.

    Chavez wants to draw more revenue from foreign oil majors

    On Monday, Rafael Ramirez, the oil minister, said Venezuela seized two oilfields from France's Total SA and Italy's Eni SpA after the companies failed to comply with a government demand that operations be turned over to state oil company Petroleos de Venezuela SA, or PDVSA.

     

    He said: "Those two companies resisted adjusting to our laws. Those fields return to total, absolute control by Petroleos de Venezuela."

     

    Until PDVSA took control of the oilfields on Saturday, Total and Eni had operated them under contract. Some other companies, including Exxon Mobil Corp, decided to sell their stakes among the 32 Venezuelan oil properties rather than go along with the new terms.

     

    Ramirez, asked if companies that resist will be forced out of Venezuela, replied: "We don't have a veto against any company here.

     

    "Companies that don't adjust to our laws, we don't want them to continue in the country."

     

    More revenue

     

    Venezuela's weekend seizures were the first as part of Chavez's effort to draw more revenue from companies pumping crude in the South American country.

     

    Private oil companies had run 32 oilfields in Venezuela independently under contract with the government. But Venezuela demanded last year those contracts be changed into so-called "mixed company" joint ventures that give PDVSA a minimum 60% stake.

     

    Ramirez: We don't want players
    who don't adjust to our laws

    Venezuela has been emboldened to take a harder line due to rising oil prices, political instability in the Middle East and Nigeria, and new buyers in Asia.

     

    Light sweet crude for May delivery was up 42 cents to $67.05 a barrel on Monday afternoon on the New York Mercantile Exchange.

     

    Ramirez said 20 companies, including Spanish-Argentine Repsol YPF, Royal Dutch Shell PLC and China National Petroleum, representing 25 oilfields have signed on to the new legal framework to create joint ventures.

     

    Another five oilfields were voluntarily returned to PDVSA after companies with stakes decided to turn them over rather than operate them as joint ventures.

     

    Ramirez declined to say if those companies, which include Repsol and Japan's Teikoku Oil Co, would be compensated financially.

    SOURCE: Agencies


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