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Exxon Mobil holding last card in Venezuela
By Elio Ohep
Petroleumworld
CARACAS
Petroleumworld.com 03 08 07Rex Tillerson, chief executive of Exxon Mobil put in doubt that ExxonMobil has play the last card in Venezuela. On Wednesday Tillerson said to a Dow Jones reporter, that it could pull out of Venezuela if it cannot strike a deal with the government on handing over control of its oil operations in the Orinoco basin.
"It will be a function of can we shift ownership to a value proposition that works for us," Tillerson,said. "If not, everything else is moot because we won't be staying, we'll be leaving." he added.
The warning add an surprise element on the on going negotiations between major oil companies with operations in the extra heavy oil crude Orinoco Faja basin fields.
Last week Venezuela's strongman Hugo Chávez, decree that the state oil company PDVSA, was to take a controlling stake of at least 60 per cent in four oil-producing joint ventures in the heavy crude Orinoco Belt, in direct confrontation with ExxonMobil, Chevron, Conoco-Phillips, BP, Total and Statoil.
The Orinoco's Faja basin produces between 500,000 and 620,000 barrels per day, about a quarter of Venezuela's total production.
"If [International oil companies] feel they've retained value and stay involved, that gives a pattern for the future," he said. "If IOCs leave, that gives another pattern, " Tillerson indicated.
Exxon said on Monday it had agree to participate in a transition committee to oversee the transfer of its control of the Cerro Negro heavy crude project to PDVSA, the Venezuelan state oil company. Exxon owns a 41.7 per cent stake in the venture, as does PDVSA. The remaining 16.6 per cent is owned by BP.
The region produces between 500,000 and 620,000 barrels per day, about a quarter of Venezuela's total production.
Tillerson said that even do its company is planning to start up more than 20 new projects in the next three years and expected to add 1 million oil-equivalent barrels per day to its volumes, is not planning any new investment in Venezuela.
"Given the conditions down there at this time and the uncertainty around how our current holdings are going to be dealt with, we are not contemplating any new investment in Venezuela," Tillerson said, speaking at a meeting with analysts in New York.
Tillerson said some ExxonMobil workers are been pull out of Venezuela, within a "fairly normal transition."
All Orinoco projects have until may 1st, to reach an agreement over the terms to migrate to PDVSA's control, if they did not reach an agreement they state would simply take over the projects.
- Elio Ohep, editor@petroleumworld.com, 58 412 996 3730, Caracas,
Petroleumworld 07 03 07
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