Exxon
force out of Venezuela's Pequiven $3 b petrochemicals project
Jose petrochemical complex, near Puerto La Cruz, Venezuela
By
Elio Ohep
Petroleumworld
CARACAS
Petroleumworld.com
02 08 06
Exxon Mobil announced on Tuesday that Venezuela's petrochemical
company PEQUIVEN informed them that "Pequiven would not be
able to complete the Jose Petrochemical Project feasibility study
under the terms and conditions agreed in August 2004 and therefore
have elected to terminate the PDA."
Exxon
Mobil said on a press release that they have " regretfully
accepted Pequiven's decision and hope to continue their relationship".
The statement added that "Exxon Mobil remains open to discuss
future opportunities with Pequiven".
Analysts
speculated that the reason Pequiven terminated the relationship
with Exxon Mobil Corp. on the petrochemicals project is because
its differences with President Hugo Chavez's nationalist oil policies.
Exxon
Mobil maintained a position of contesting, Venezuela's new tax
royalty hike on Exxon heavy oil project at the Orinoco Faja, Cerro
Negro, analysts told Petroleumworld. Venezuela hiked royalties
on heavy oil projects in the Orinoco tar belt to 16.6% last year
from a preferential 1%. Exxon was the only of five companies operating
in the faja heavy oil projects to challenge the tax increase.
Since june of last year, Pequiven, is an independent company from
the Venezuela's oil company PDVSA and is to produce products from
plastics to fertilizer.
The
$3 billion olefins petrochemicals plant is to be built in Jose
petrochemical complex and gas hub in eastern Venezuela, near Puerto
La Cruz and was schedule to start up in 2008 to 2010.
Several
years ago, Exxon Mobil was also force out of the Venezuela's offshore
Mariscal Sucre natural gas project in eastern Venezuela in which
state oil company PDVSA now plans to partner Brazil's Petrobras.
In
December, Exxon Mobil opted to sell its 25% interest in the Quaimare-La
Ceiba operating service agreement to Spanish firm Repsol YPF rather
than accept the terms of the migration to form a new joint venture
with a majority stake by PDVSA.
Exxon
is presently operating in venezuela, 200.000 barrels daily extra
heavy
oilreformer at its Cerro Negro's Orinoco faja belt project and
has La Ceiba
field, which is under a profit-sharing contracts with venezuela's
oil company PDVSA. Under the terms of the contracts, PDVSA can
purchase up to a 35% stake in each project once declared commercial.
La Ceiba field was declared commercially viable at the end of
September of this 2005 and its waiting the approval of its development
plan or DPA submitted some months back.
Exxon Mobil and PetroCanada both companies hold a 50% interest
in the La Ceiba field. PetroCanada bought the 50% interest in
the field from Veba Oil & Gas in 2002. The field holds reserves
estimates of 185 million barrels.
Venezuela
is the world's fifth largest oil exporter, but the petrochemical
industry is not well develop in the oil rich country.
-
Elio Ohep, editor@petroleumworld.com, 58 412 996 3730, Caracas.
Petroleumworld
02 07 06
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