Wednesday, February 20, 2008

Chavez says Venezuela will continue oil exports to US

Chavez can't live without Venezuela money........
vdebate reporter
Feb. 17, 2008, 3:20PM
Chavez says Venezuela will continue oil exports to U.S.
By CHRISTOPHER TOOTHAKER
Associated Press

CARACAS, Venezuela — President Hugo Chavez sent a soothing message to American motorists on Sunday, saying Venezuela is not preparing to cut off oil shipments to the United States.
The socialist leader rattled oil markets last Sunday when he threatened to halt shipments to the United States in retaliation for Exxon Mobil Corp.'s success in persuading courts in the U.S. and Europe to freeze Venezuelan assets.
"We don't have plans to stop sending oil to the United States," Chavez said during a visit to heavy-oil projects in Venezuela's petroleum-rich Orinoco River basin that were nationalized last year.
But if the United States "attacks Venezuela or tries to harm us, we will have to make the decision not to send a single drop of our oil to the United States," he added.
U.S. officials have denied planning to attack Venezuela.
Chavez's administration — a close ally of Cuban leader Fidel Castro — is locked in a legal battle with the Irving-based oil company over compensation for nationalization of one of four heavy-oil projects in the Orinoco River basin.
Exxon Mobil — the world's largest publicly traded oil company — wants to freeze billions of dollars in Venezuelan assets in the United States and Europe to guarantee a payoff in the event it wins a decision by an international arbitration panel.
The United States relies on Venezuela for about 10 percent of its oil imports.

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Venezuela paying italian company over oilfield takeover

Venezuela paying Italian company over oilfield takeover

CARACAS, Venezuela (Reuters) — Venezuela has agreed to pay Italy's Eni $700 million in cash for the takeover of an oil field but hardened its stance in a fierce compensation battle with ExxonMobil (XOM).
Oil Minister Rafael Ramirez said Tuesday that the government would make the payment to Eni for the Dacion heavy crude project over a seven-year period.
"The book value of the investments made by the transnational company in the Dacion field are $700 million and we have agreed to pay it over seven years," he said.
He said the agreement left Exxon isolated as the only company fighting with the government over a drive to increase state control of Venezuela's huge oil resources.
Exxon in recent weeks won court orders freezing up to $12 billion of Venezuela's assets, prompting state oil company PDVSA to sever commercial ties with America's biggest company.
Ramirez warned that Venezuela could pull out of its Chalmette, La., refinery joint venture with the Texas company over the dispute. He said the fight with Exxon was one factor helping support world oil prices.
Venezuela took over the Eni field in 2006 after negotiations with the government of socialist President Hugo Chavez to convert the Dacion subcontracting venture into a state-majority joint venture fell through.
"Eni believes this settlement represents an important step toward improving and consolidating the cooperation with local authorities and with PDVSA," the company said last week in statement.
Ramirez thanked Eni for its willingness to negotiate an agreement with Venezuela while slamming Exxon for challenging PDVSA over compensation for the nationalization last year of one of four Orinoco heavy oil projects.
"Eni never lost trust in our country," Ramirez was quoted as saying by the local Globovision television channel, which posted his comments on its website. He criticized what he called Exxon's "aggressive attitude."
Ramirez on Tuesday denied that Exxon's investments in the Orinoco region are worth billions of dollars, saying the company's "total assets in Venezuela are less than one billion dollars."
Contributing: Associated Press
Copyright 2008 Reuters Limited.

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Friday, February 15, 2008

It would be the worst time politically for Chavez to cut oil shipments to US

"It would be the worst time politically for Chavez to cut oil shipments to the U.S.," said Patrick Esteruelas, Latin America analyst at the Eurasia Group in New York.
Oil analysts dismiss threat by Chavez on sales to U.S.
Dan Caterinicchia
Associated Press
Feb. 12, 2008 12:00 AM
WASHINGTON - Venezuelan President Hugo Chavez's latest threat to cut off oil sales to the U.S. produces tantalizing headlines and rattles some oil
traders' nerves.But analysts say it presents no long-term danger to global oil supplies or prices and makes no economic or political sense for his own country.Chavez's threat was in retaliation to Exxon Mobil Corp.'s efforts in U.S. and British courts to freeze billions of dollars of assets belonging to Venezuela's state oil company to resolve an oil-production contract dispute.

"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said Sunday. "Do you know how? We aren't going to send oil to the United States. "His comments helped stir anxiety on oil markets on Monday, sending crude futures prices up by nearly $2 a barrel. (Violence in Nigeria, refinery outages and colder weather in the U.S. also propelled prices higher.)
If Chavez actually cuts off supplies to the U.S., the impact would be mostly symbolic, said oil analyst Peter Beutel of Cameron Hanover in New Canaan, Conn. Any short-term supply disruption would dissipate as other nations make arrangements to take the Venezuelan crude and the U.S. makes up its shortfall by purchasing additional barrels from the Middle East, Africa and other regions.
"It makes no sense for Mr. Chavez to follow through on his threats" because the U.S. refining industry's plants, some of which are owned by Venezuela, are customized to handle much of Venezuela's high-sulfur crude oil, said Tom Kloza, chief oil analyst at the Oil Price Information Service in Wall, N.J. If Venezuela's crude was low in sulfur content, making it more valuable on the global market, he might have a better hand to play, Kloza said.
Indeed, the U.S. remains the No. 1 buyer of Venezuelan oil, purchasing more than 41 million barrels in November, accounting for roughly 10 percent of all crude-oil imports that month, according to the most recent Energy Department data available.
With oil prices hovering above $90 a barrel, Chavez relies largely on U.S. oil money to stimulate his economy and bankroll social programs that have traditionally boosted his popularity. Nevertheless, Chavez in December lost a vote on constitutional changes that would have let him run for re-election indefinitely."It would be the worst time politically for Chavez to cut oil shipments to the U.S.," said Patrick Esteruelas, Latin America analyst at the Eurasia Group in New York.
This isn't the first time Chavez has tried to use the oil weapon. He has repeatedly threatened to cut off shipments to the U.S. if Washington tries to oust him, but many analysts have dismissed that scenario as highly unlikely. Chavez, meanwhile, has been vague about precisely what actions by the U.S. government could constitute an attack against his government worthy of halting oil shipments.
Exxon Mobil has gone after the assets of Petroleos de Venezuela SA in U.S. and European courts as it challenges the nationalization by Chavez's government of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits. Other oil companies including Chevron Corp., France's Total, Britain's BP PLC and Norway's Statoil Hydro ASA have negotiated deals with Venezuela to continue as minority partners in the project, but ConocoPhillips and Exxon Mobil balked at the tougher terms and have been in compensation talks with Petroleos.
It still remains unclear how much Venezuela stands to lose economically from Exxon Mobil's lawsuits in courts in New York and London.Although a British court last month issued an injunction "freezing" as much as $12 billion (euro 8.3 billion) in Venezuelan assets, initial reaction from Venezuela's top oil official suggested that Chavez's government does not expect to face much harm.
Oil Minister Rafael Ramirez said last week that the state oil company does not have "any assets in that jurisdiction that even come close to those sums."Light, sweet crude for March delivery rose $1.82 to settle at $93.59 a barrel Monday on the New York Mercantile Exchange after earlier hitting a one-month high of $94.72.
A key factor, analysts said, was that unidentified gunmen in Nigeria attacked a naval vessel that was escorting petroleum industry boats. Militant attacks have cut the African nation's oil output by nearly a quarter in the past two years.

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Tuesday, February 12, 2008

Exxon Mobil cut off from Venezuela's oil



Exxon Mobil cut off from Venezuela's oil

CARACAS, Venezuela (AP) -- Venezuela's state oil company said Tuesday that it has stopped selling crude to Exxon Mobil Corp. in response to the U.S. oil company's drive to use the courts to seize billions of dollars in Venezuelan assets.


President Hugo Chavez has said Exxon Mobil is no longer welcome to do business in Venezuela.

Exxon Mobil is locked in a dispute over the nationalization of its oil ventures in Venezuela that has led President Hugo Chavez to threaten to cut off all Venezuelan oil supplies to the United States.

Venezuela is currently the United States' fourth largest oil supplier.

Tuesday's announcement by state-run Petroleos de Venezuela SA, or PDVSA, was limited to Exxon Mobil, which PDVSA accused of "judicial-economic harassment" for its efforts in U.S. and European courts.

PDVSA said it "has paralyzed sales of crude to Exxon Mobil" and suspended commercial relations with the Irving, Texas-based company.

"The legal actions carried out by the U.S. transnational are unnecessary ... and hostile," PDVSA said in the statement.

It said it will honor any existing contracts it has with Exxon Mobil for joint investments abroad, but reserved the right to terminate them if permitted by the terms of the contracts.

Exxon Mobil spokeswoman Margaret Ross declined to comment on the move by Venezuela but said that "it is our long-standing practice to take appropriate steps to meet our customers' needs."

Exxon Mobil is challenging the Chavez government's nationalization of one of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits.

A British court issued an injunction last month temporarily freezing up to $12 billion of PDVSA's assets.

Other oil companies including Chevron Corp., France's Total, Britain's BP PLC and Norway's StatoilHydro ASA have negotiated deals with Venezuela to continue as minority partners in projects. ConocoPhillips and Exxon Mobil balked at the government's tougher terms and have been in compensation talks with PDVSA.

Earlier Tuesday at an energy conference in Houston, Exxon Mobil senior vice president Mark Albers declined comment on any court proceedings with Venezuela, though he said the company is eager to negotiate fair compensation for its assets. Exxon Mobil is taking the dispute to international arbitration, to which Venezuela has agreed.

Venezuela's announcement came after Ramirez, the oil minister and PDVSA president, reiterated in a newspaper interview Tuesday that Venezuela is ready to cut off oil supplies to the United States if pressed into an "economic war."

"If they want this conflict to escalate, it's going to escalate. We have a way to make this conflict escalate," Ramirez was quoted as saying.

The White House on Tuesday declined to comment on Venezuela's threat. "When there's a litigation that's ongoing, different parties will say anything to try to win over on an argument," said White House press secretary Dana Perino.

Meanwhile, Venezuelan state television has begun airing short anti-Exxon segments, with a message appearing on the screen in red text reading: "Exxon Mobil turns oil into blood."

The U.S. remains the No. 1 buyer of Venezuelan oil, and Chavez relies largely on U.S. oil money to stimulate his economy and bankroll social programs that have traditionally boosted his popularity.

Some analysts say it would make little sense for Chavez to follow through on his threats because Venezuela owns refineries in the United States that are customized to handle the South American country's heavy crude.

Ramirez said Venezuela is selling the U.S. a daily average of 1.5 million barrels of crude and other products derived from

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Friday, February 8, 2008

Court Bars Sale of billions in Oil Assets by Venezuela

We have years working against Chavez because we new he was ruining Venezuela. It is very sad to see this.
vdebater reporter
Court Bars Sale of Billions in Oil Assets by Venezuela
By SIMON ROMERO
Published: February 8, 2008
CARACAS, Venezuela — The oil giant Exxon Mobil has won court orders freezing as much as $12 billion in petroleum assets controlled by Venezuela’s government in an escalation of a dispute over efforts by President Hugo Chávez to assert greater control over the country’s oil industry. Venezuela’s dollar-denominated bonds suffered their steepest drop in six months on Thursday on concerns that Mr. Chávez’s government could face a protracted legal battle with Exxon, preventing the government from raising cash through the sale of refineries abroad if the economy here slows after years of torrid growth.
Investors are also increasingly concerned about the financial health of the national oil company, Petróleos de Venezuela, amid reports that its debt is ballooning as its output declines. The oil company is the largest single source of revenue for Mr. Chávez’s government, financing an array of social welfare projects and foreign aid to leftist allies. “This is a big blow against Venezuela,” said Pietro Pitts, an oil analyst who publishes Latin Petroleum, an industry magazine based here. “It could set an important precedent for other multinationals threatened by Venezuela’s government.”
After Mr. Chávez’s move to take control of large oil ventures last year, Exxon dug in for a fight. While Chevron and other companies accepted the terms imposed by Mr. Chávez, Exxon aggressively sought to prevent Venezuela from transferring control of foreign-based oil assets to entities here ahead of arbitration proceedings.
In recent days, Exxon won a court order from the High Court of London prohibiting Petróleos de Venezuela from selling assets worldwide up to a value of $12 billion, Margaret Ross, an Exxon spokeswoman in Houston, said in a statement. Exxon won similar orders in the Netherlands and the Netherlands Antilles for assets worth up to $12 billion.
And in New York, Exxon won an order freezing $300 million of Petróleos de Venezuela’s assets. Despite a deterioration of political relations between Caracas and Washington, Venezuela remains a major trading partner with the United States, ranking as its fourth-largest supplier of imported crude oil. Venezuela’s government also controls Citgo Petroleum of Houston, which operates refineries in Illinois, Louisiana and Texas. Mr. Chávez’s government has compensated American companies in previous nationalizations of their assets when it was faced with the possibility of losing control of Citgo and other foreign assets in retaliation.
A spokesman for Petróleos de Venezuela did not return calls seeking comment. The company is expected to appeal the rulings. The dispute may raise borrowing costs for Petróleos de Venezuela, which is being reconfigured by Mr. Chávez to focus on pressing social concerns.

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Exxon wins freeze on $12bln of Venezuelan assests

This is terrible to Venezuela...... Thanks Chavez and his political supporters, they ruin Venezuelans wealth.... They will have to pay.
vdebate reporter
Exxon wins freeze on $12 bln of Venezuelan assets
Thu Feb 7, 2008 7:32pm EST
(Adds analyst comments, background, byline)
By Michael Erman
NEW YORK, Feb 7 (Reuters) - Exxon Mobil Corp (XOM.N: Quote, Profile, Research) has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez's nationalization drive.
The largest U.S. company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project.
The move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their holds on natural resources as energy and commodity prices have soared.
"To me it sounds like a very aggressive tactic," said Stephen Zamora, professor of international law at the University of Houston Law Center.
"I can't really say that I'm aware this has been used in other investment disputes. They may be trying to get the government to settle."
Exxon -- which last week posted the largest ever year's profit by a U.S. company -- said on Thursday it has received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in assets of Venezuela state oil firm PDVSA. An Exxon spokeswoman said the total that could be frozen worldwide was $12 billion.
Exxon also won a court order from the U.S. District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, seeking to guarantee repayment should it win the arbitration.
PDVSA, one of the largest suppliers of crude oil to the United States, was not immediately available for comment. The White House and the U.S. State Department also declined to comment.
Venezuela's sovereign bonds sold off after the court orders surfaced.
Left-winger Chavez, who regularly clashes with the Bush administration, took over Exxon Mobil and ConocoPhillips (COP.N: Quote, Profile, Research) stakes in multibillion-dollar heavy oil projects in Venezuela's oil region last June.
The move was part of the left-wing leader's drive to nationalize key industries including utilities and telecommunications companies owned by private companies.
CHALLENGE TO CHAVEZ
The news comes as a tough blow to Chavez, who suffered a stinging defeat in a December referendum that would have let him run indefinitely for reelection and enshrine socialism as the OPEC nation's economic system.
PDVSA is already facing growing debt and increasing operational problems that analysts attribute to underinvestment caused by the company's massive contributions to Chavez's social programs.
But the near-term effect of the Exxon legal maneuver on PDVSA's day-to-day operations was not immediately clear.
The South American nation has an extensive overseas refining network, including the Citgo refining and marketing branch in the United States.
Exxon said in court filings that recent estimates have placed PDVSA's global asset value -- including its operations in Venezuela -- at over $62 billion
PDVSA's European refining assets, principally a 50 percent share in the German refining joint venture Ruhr Oel, were held through a Netherlands Company PDV Europa BV, according to filings PDVSA made with the U.S. Securities and Exchange Commission in 2006.
Exxon filed for arbitration in September with the International Centre for Settlement of Investment Disputes.
Exxon has not specified how much it wants for the 41.7 percent stake in the Cerro Negro project, but it has said its remaining book investment in the project was about $750 million at the time the assets were expropriated.
The move underscores Exxon's reputation for toughness in dealing with foes as varied as governments and fishermen, as it has been willing to wage prolonged legal battles to defend its interests around the world.
Amy Meyers Jaffe, energy policy researcher at Rice's Baker Institute, said the case could have far-reaching implications.
"These are precedents that are going to be important for what people can and cannot do in the oil industry," she said.
ConocoPhillips spokesman William Tanner said his company "continues to discuss an amicable resolution regarding the assets that were expropriated in Venezuela."
Conoco filed for arbitration over the dispute in November.
Venezuela's benchmark global bond due 2027 lost 2.375 points in price to be bid 98.938, while total returns offered by the country's debt slipped 1.52 percent according to the JP Morgan EMBI+ index 11EMJ. (Additional reporting by Robert Campbell, Matt Daily and Matthew Robinson in New York; Anna Driver in Houston; and Brian Ellsworth in Caracas; Editing by Gary Hill)
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