WESTERN HEMISPHERE: Venezuela values Exxon Mobil's assets at less than $1 billion

Exxon Mobil Corp.'s nationalized investments in Venezuela are worth less than $1 billion — far below what the company seeking as compensation, the country's oil minister said Tuesday.

President Hugo Chavez's government and the Irving-based oil company are locked a legal battle over compensation after the South American country nationalized a heavy oil project in the Orinoco River basin.

Acting on Exxon Mobil requests, courts in Britain and the U.S. have temporarily frozen about $12 billion in Venezuelan assets to guarantee a payoff in the event the company wins a decision by an international arbitration panel.

But Oil Minister Rafael Ramirez said Exxon Mobil's Orinoco investments are worth nowhere near that much.

Exxon Mobil's "total assets in Venezuela are less than $1 billion," he told reporters.
Exxon Mobil walked away from its heavy-oil upgrading operations in the Orinoco basin after Chavez's government changed the terms of the contract. Other major oil companies, including Chevron Corp., France's Total, Britain's BP PLC, and Norway's StatoilHydro ASA, have negotiated deals to continue on as minority partners in the Orinoco oil project.

Ramirez also said Tuesday that Venezuela will pay Italian energy company Eni SpA $700 million in compensation for the seizure of the Dacion oil field.

He said Eni agreed on a cash payment for Dacion, which was seized as Venezuela converted a series of operating contracts in the Orinoco basin into joint ventures.

Eni, which had operated the field under an agreement with Venezuela's state oil company Petroleos de Venezuela SA, or PDVSA, refused to accept the contract changes. The Italian company said last week it had struck a compensation deal but did not give the amount.

Ramirez thanked Eni for its willingness to negotiate an agreement with Venezuela while slamming Exxon Mobil for challenging PDVSA over compensation.

His comments came after Chavez on Monday said Venezuela is not preparing to cut off oil shipments to the United States, a week after the socialist leader rattled oil markets by threatened to halt shipments in retaliation for Exxon Mobil's success in convincing courts to freeze Venezuelan assets. Exxon Mobil's shares were up $2.26, or 2.7 percent, to $87.63 in afternoon trading. Eni's U.S. traded shares gained $1.92, or $2.9 percent, to $68.26.


Source: Associated Press