Oil firms reject Venezuela deal

Exxon Mobil and ConocoPhillips reject nationalisation deal but four others accept.

    Chavez, right, has is on a nationalisation campaign covering oil, telecoms and electricity sectors [EPA]
    According to a source close to the company, ConocoPhillips has decided to leave the country entirely and would most likely seek arbitration to resolve the dispute.
     
    Accepting takeover
     
    Four other companies – America's Chevron, Norway's Statoil, Britain's BP and France's Total – have reportedly agreed to the partial takeover.
     
    They plan to sign an accord that will keep them in the massive Orinoco oil reserve projects, a government official said.
     
    An official announcement on the final outcome is expected on Tuesday, the deadline set by Chavez for the companies to either accept his terms of continuing operations with a minority stake or to leave the country.
     
    On May 1, the government seized control of the operations of the Orinoco projects, which were among the last privately run fields in the South American nation.
     
    Chavez gave the six companies extra time to work out a deal over the projects' new ownership structure.
     
    Sticking points include asset valuation, compensation for lost value, and decision-making rules in the future joint ventures, according to industry officials.
     
    Companies that agree to stay on in the four projects have two months before a final deal is submitted to the Venezuelan congress for approval.
     
    Those that reject the deal can leave and take Venezuela to court or accept a government offer to negotiate compensation for several months for the nationalised Orinoco assets, several sources familiar with the talks said.
     
    Chavez's high profile showdown with oil companies and his broader nationalisation drive covering the telecommunications and electricity sectors apparently have the support of Venezuela's poor majority who got him re-elected in December.
     
    The president has used of billions of dollars in oil revenues to finance social programmes.

    SOURCE: Al Jazeera and agencies


    YOU MIGHT ALSO LIKE

    The Victorian Muslims of Britain

    The Victorian Muslims of Britain

    The stories of the British aristocrats who converted to Islam.

    Going undercover as a sex worker

    Going undercover as a sex worker

    A photojournalist describes how she posed as a prostitute to follow the trade in human flesh.

    India's shocking farmer suicide epidemic

    India's shocking farmer suicide epidemic

    Falling into a debt-trap and besieged by bad weather, thousands of farmers are taking their own lives each year.