“He is a new Castro with muscles. Castro has no muscles. This guy has something that everybody in the world wants,” Fadel Gheit, an oil analyst at Oppenheimer and Co. in
So far, the foreign oil companies’ future in
The Venezuelan authorities would like a 60 percent ownership in the
Chavez reportedly has urged the US, British, French and Norwegian companies to stay as minority partners and help develop the fields. They have until June 26 to negotiate the terms, including compensation and the sizes of the stakes.
“His fight is not with the companies, it’s with their governments,” Gheit said. The companies have some leverage for the moment because PVDSA cannot transform the
Chavez realises that he needs their participation to fulfil
Gheit said he hopes foreign oil companies will be pragmatic and develop the state-controlled ventures rather than give up such profitable operations. “There is no going back. He is what he is and he is unilaterally confiscating these assets so the companies have two choices: Either leave and start going to the international courts or try to extract some money as compensation,” Gheit said. “What is going to happen to ConocoPhillips’ exposure of over one billion dollars? What are they going to do? Walk away from it? There has to be a resolution.”
The companies appear to be demanding compensation and assurances that future assets won’t be seized. “These companies are not likely to stay there unless they are compensated. They can’t. They are not going to involve themselves in any other project in
BP, which has a minority stake in the Cerro Negro (Black Hill) project, said PVDSA took operatorship from ExxonMobil on May 1. “We and our partners in Cerro Negro continue to be in discussions with the Venezuelan authorities on other issues including equity participation in these projects,” BP spokesman David Nicholas told New Europe on May 3.
Total spokeswoman Lisa Wiler said the agreement the French company and Statoil signed on April 28 with PVDSA concerns only the transferring of the control of the Sincor operations to the Venezuelan company. “They are also ongoing negotiations in order to define our participation in the future joint venture including compensation. We have done everything to ensure the continuity of the operations, including the security of the people during the transitory period,” she told New Europe on May 3.
Meanwhile, Chavez continues to thumb his nose at the
“Chavez seems like a new Mao (Zedung) as well as a Castro,” oil analyst Elefterios Verivakis, a former Greek energy minister, pointed out, adding: “His actions will surely have a long-term impact on the world oil market.”
