Venezuela in control of key oil investments

Last week, Venezuela took over the majority of key oil investments by foreign companies.  The companies that accepted the new terms were BP, Chevron, Statoil and Total, however ConocoPhillips and ExxonMobil declined the terms.

Hugo Chavez, the Venezuelan president, broadcasted the takeover of the bulk of the control of operations in the Orinoco belt this year along with the nationalisation of Venezuela’s largest telephone and electricity companies.

Negotiations between Exxon, Caracas and Conoco had been made complicated by measures discussed in the US Congress to increase the tax burden on oil companies. The US has been discussing whether to renegotiate royalty agreements in the Gulf of Mexico and whether to increase taxes on the industry.  A spokesperson close to the discussions said they are indicating to the rest of the world that altering fiscal terms is ok.

Exxon and Conoco rejected the deal on how the state-owned PdVSA would take majority control of heavy crude oil projects in the Orinoco, valued at a total of at least $US25 billion ($29 billion).

Oil chiefs are arguing about whether national oil companies have taken over so much that international companies now have possession or access to less than 10% of the world’s oil resources.