Exxon Mobil not welcome in Venezuela anymore

By NATALIE OBIKO PEARSON
Associated Press

03/30/06 "AP" -- -- CARACAS, Venezuela — Venezuela's oil minister said today that Exxon Mobil Corp., the world's second-largest integrated oil company, was no longer welcome in this oil-producing nation.

Exxon Mobil has resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to "re-nationalize" the oil industry.

Rather than submit to new terms that will turn 32 privately run oil fields over to state control, the company sold its stake in the 150,000 barrel-a-day Quiamare-La Ceiba field to its partner, Spanish-Argentine major Repsol YPF, to avoid accepting the unfavorable terms in December.

"There are some companies that prefer to leave" than accept the policy changes, Oil Minister Rafael Ramirez said in an interview with the state-run TV broadcaster. "Exxon Mobil ... preferred to sell to Repsol, its partner in the agreement, rather than adjust."

"We said we don't want them to be here then," Ramirez said. "We have many partners, many capabilities and many countries that are willing to manage our resources with us."

Exxon Mobil officials did not immediately return calls for comment late Wednesday.

Exxon Mobil was also the only firm to publicly speak against a royalty increase on extra-heavy oil production in Venezuela's Orinoco tar belt in 2004.

Other oil companies, including ConocoPhillips, France's Total SA, Chevron Corp. and Norway's Statoil ASA, agreed to the new terms without a struggle, while Exxon Mobil had threatened international arbitration.

In February, state oil company Petroleos de Venezuela SA, or PDVSA, ousted Exxon from a multibillion dollar petrochemicals project, claiming that the company did not meet timetables for getting the project off the ground.

The Irving company still holds a 41.7 percent stake in the 120,000-barrel-a-day Cerro Negro heavy oil upgrading project in the Orinoco belt, which it operates along with partners BP and PDVSA.

Also, Exxon Mobil and Canadian oil and gas company PetroCanada each hold a 50 percent stake in the La Ceiba field under a profit-sharing contract with PDVSA. Exxon operates the field.

Venezuela is the world's fifth largest oil exporter and a main source of U.S. oil imports.