Exxon, Conoco Barred from Oil Business in Venezuela

Venezuela's energy minister said Wednesday the major U.S. oil companies Exxon-Mobil and Conoco-Phillips had been banned from producing oil in the Latin American country.

In January 2007, President Hugo Chavez signed a decree nationalizing oil fields in the Orinoco basin, one of the world's richest in terms of reserves, under which foreign companies should have sold at least 60% in oil projects in the country to state-owned Petroleos de Venezuela by May 1.

"Despite all our attempts to reach a compromise on transferring control of some highly profitable oil projects in the Orinoco basin to the Venezuelan government, U.S. oil companies Exxon-Mobil and Conoco-Phillips have not agreed to our conditions," Rafael Ramiråz said.

"Consequently, the companies' refusal automatically grants the Venezuelan government control over their oil fields," the minister said.

The minister thanked the management of U.S. company Chevron, Britain's BP, France's Total and Norway's Statoil for their consent to the transfer.

Petroleos de Venezuela now controls 78% of oil production in the Orinoco basin, projects worth $30 billion.

Oil reserves in the basin are estimated at 235 billion barrels.

Source: AFP

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