What's the price of principle? In ConocoPhillips case, $4.6 billion, or $2.72 a share.
That is the hit to earnings America's third-largest oil producer says it has taken for quitting Venezuela.
Conoco, like ExxonMobil, declined to negotiate a minority stake after Venezuelan President Hugo Chavez announced in May that the state-run oil firm PDVSA would take over foreign oil companies’ exploration projects in the Orinoco Belt field.
BP, Chevron , Total and Statoil all cut deals rather than walk.
In announcing its second-quarter earnings Wednesday, Conoco said its net income was $301 million, or $0.18 per share, against $5.2 billion, or $3.09 per share, for the same quarter in 2006. Adjusted for the after-tax cost of the Venezuela exit, earnings were $4.8 billion, or $2.90 per share.
The Orinoco Belt in eastern Venezuela is one of the country's most important oil fields, with proven reserves of 80 billion barrels.
The Venezuelan nationalization took away 10% of Conoco's reserves. In the long term, the financial impact is not likely to be significant, though even for a big oil company, $4.6 billion is a hefty chunk of change. ConocoPhillips shares rose 2.4% on the day to $84.29.
Conoco is still negotiating with the Chavez government "concerning appropriate compensation for the expropriation of the company's oil projects and have preserved all legal rights, including international arbitration," Chairman and Chief Executive Jim Mulva told shareholders.
Via: Forbes
