Some foreign oil companies operating in Venezuela appear to be dragging their feet to the negotiating table where Caracas waits to negotiate a majority stake in their operations, said Oil and Energy Minister Rafael Ramirez this week in a nationally televised address.
Ramirez singled out Italy`s Eni and France`s Total SA as two of the companies that have not reached an agreement with state-run Venezuelan petroleum firm PDVSA for the turnover of majority control of their operations in the country.
'Two corporations, namely Eni and Total, refused to accept the terms established,' Ramirez said.
He said the companies have until June 26 to come to terms with PDVSA. In the past, Ramirez has threatened non-compliant foreign firms with the use of military force to take over operations in Venezuela were they to miss a deadline for state plans to take majority control.
'Negotiations have stalled for some time and, as proven in other recent nationalization cases, the government can be expected to present a last-minute `take it or leave proposal`' to firms operating in Venezuela, read a recent report by Latin Sources.
Venezuela`s ambitious plans for taking majority control of its most-lucrative resources began earlier this year with the inauguration of populist President Hugo Chavez to a second term in office.
Chavez announced then his intention to revert Venezuela`s oil and gas sectors back to majority state control, an announcement that sent shockwaves through the international petroleum sector, causing global price spikes and raising eyebrows in Washington.
Making good on his word, Venezuela on May 1 assumed majority control over the oil-rich Orinoco Belt, where several foreign energy firms invested millions in setting up operations there.
The takeover stipulated that PDVSA has at least a 60 percent share of the projects pumping heavy crude once dominated by foreign firms such as BP PLC, Chevron and Total. Those firms and others would be given fair market value for controlling interest of the projects, Chavez said.
Only ConocoPhillips did not sign a majority takeover agreement by the deadline, prompting Ramirez to threaten the company with expulsion from the country without compensation.
Venezuela hit the Houston-based company with a hefty bill for back taxes on a project co-owned by ConocoPhillips and PDVSA totaling $465 million. ConocoPhillips also owes $50 million in back taxes on another project, said energy officials. Both bills are said to date back to 2003-2005.
U.S. firm Chevron Corp. was also hit with a hefty bill for back taxes totaling a reported $29 million.
In another move interpreted by analysts as an effort to rein in reluctant foreign oil and gas firms, PDVSA took over day-to-day operations of 18 oil rigs run by foreign companies.
Meanwhile, PDVSA announced Tuesday it planned to expand its exploration operations to Vietnam, as well as nearby Argentina and Bolivia.
In Vietnam, PDVSA is reportedly interested in potential offshore sites, though it already rejected two sites offered by Vietnam following a review of a recent geological survey.
Venezuela has also established strong ties with China. Last month Ramirez announced Venezuela would buy 13 new oil rigs from a Chinese supplier, drawing relations between the two countries closer still.
Over the past several years Chavez has worked steadfastly to improve Venezuelan-Sino ties, particularly when it comes to oil.
In August 2006 he traveled to China to finalize a deal with Beijing for the construction of 24 drilling rigs in Venezuela and the purchase of 18 oil tankers with a $1.8 billion price tag.
Earlier that year Chavez said Venezuela would like to increase oil sales to China to 300,000 barrels per day by the end of the year. Other officials in Venezuela said the increase would reach 200,000 bpd, up from the 150,000 bpd now. Since assuming office in 1998, Chavez has courted China and other markets like India and even expressed willingness to sell fuel to North Korea. He has also cultivated closer ties with Iran, drawing sharp criticism from Washington and increased concerns about the foreign-policy leanings of the Venezuelan president.
Ramirez singled out Italy`s Eni and France`s Total SA as two of the companies that have not reached an agreement with state-run Venezuelan petroleum firm PDVSA for the turnover of majority control of their operations in the country.
'Two corporations, namely Eni and Total, refused to accept the terms established,' Ramirez said.
He said the companies have until June 26 to come to terms with PDVSA. In the past, Ramirez has threatened non-compliant foreign firms with the use of military force to take over operations in Venezuela were they to miss a deadline for state plans to take majority control.
'Negotiations have stalled for some time and, as proven in other recent nationalization cases, the government can be expected to present a last-minute `take it or leave proposal`' to firms operating in Venezuela, read a recent report by Latin Sources.
Venezuela`s ambitious plans for taking majority control of its most-lucrative resources began earlier this year with the inauguration of populist President Hugo Chavez to a second term in office.
Chavez announced then his intention to revert Venezuela`s oil and gas sectors back to majority state control, an announcement that sent shockwaves through the international petroleum sector, causing global price spikes and raising eyebrows in Washington.
Making good on his word, Venezuela on May 1 assumed majority control over the oil-rich Orinoco Belt, where several foreign energy firms invested millions in setting up operations there.
The takeover stipulated that PDVSA has at least a 60 percent share of the projects pumping heavy crude once dominated by foreign firms such as BP PLC, Chevron and Total. Those firms and others would be given fair market value for controlling interest of the projects, Chavez said.
Only ConocoPhillips did not sign a majority takeover agreement by the deadline, prompting Ramirez to threaten the company with expulsion from the country without compensation.
Venezuela hit the Houston-based company with a hefty bill for back taxes on a project co-owned by ConocoPhillips and PDVSA totaling $465 million. ConocoPhillips also owes $50 million in back taxes on another project, said energy officials. Both bills are said to date back to 2003-2005.
U.S. firm Chevron Corp. was also hit with a hefty bill for back taxes totaling a reported $29 million.
In another move interpreted by analysts as an effort to rein in reluctant foreign oil and gas firms, PDVSA took over day-to-day operations of 18 oil rigs run by foreign companies.
Meanwhile, PDVSA announced Tuesday it planned to expand its exploration operations to Vietnam, as well as nearby Argentina and Bolivia.
In Vietnam, PDVSA is reportedly interested in potential offshore sites, though it already rejected two sites offered by Vietnam following a review of a recent geological survey.
Venezuela has also established strong ties with China. Last month Ramirez announced Venezuela would buy 13 new oil rigs from a Chinese supplier, drawing relations between the two countries closer still.
Over the past several years Chavez has worked steadfastly to improve Venezuelan-Sino ties, particularly when it comes to oil.
In August 2006 he traveled to China to finalize a deal with Beijing for the construction of 24 drilling rigs in Venezuela and the purchase of 18 oil tankers with a $1.8 billion price tag.
Earlier that year Chavez said Venezuela would like to increase oil sales to China to 300,000 barrels per day by the end of the year. Other officials in Venezuela said the increase would reach 200,000 bpd, up from the 150,000 bpd now. Since assuming office in 1998, Chavez has courted China and other markets like India and even expressed willingness to sell fuel to North Korea. He has also cultivated closer ties with Iran, drawing sharp criticism from Washington and increased concerns about the foreign-policy leanings of the Venezuelan president.
by Carmen J. Gentile
,
China, 
North Korea
