April 25, 2007
Chavez gets the oil majors to sign
In the latest sign of the pressure on the international oil companies, all but one of the foreign majors operating in Venezuela’s Orinoco belt have signed new contacts with the government (AP story in the Houston Chronicle), to begin the process of the state taking control of the project. The Reuters version here.
Chevron, BP, Total, Statoil and even ExxonMobil, which traditionally plays hardball in these cases, have signed Hugo Chavez’s new terms for continuing to operating in the vast heavy oil resource region. Only ConocoPhillips, which has two projects in the area, is still holding out.
Mr Chavez, of course, has hailed the agreements as a victory for his brand of socialism. But for the IOCs, things could be worse. They have still got substantial equity stakes in projects in one of the biggest oil reserves in the world, bigger perhaps even than Saudi Arabia’s. The way things are going these days, they should probably be grateful for small mercies.
