Big Oil ready to say adios to Venezuela?
Venezuela today will sign nationalization pacts with foreign oil companies. Meaning the government takes over part of the companies' holdings in oil projects there. But a couple big names may throw in the towel instead. Brian Ellsworth reports.
Gas signs from ConocoPhillips 76 and ExxonMobil stations (Getty Images)
More on International, Canada, South - Central America
TEXT OF STORY
Doug Krizner: Venezuelan President Hugo Chavez is going toe-to-toe with Big Oil. He's scheduled to sign oil nationalization deals with foreign companies today. The government is taking a majority stake in four multi-billion dollar projects, but this could cause two of the world's top oil producers to leave the country. From Caracas, Reuters correspondent Brian Ellsworth has more.
Brian Ellsworth: Companies currently involved in the projects have to decide if they will stay on as minority partners.
Oil giants like U.S.-based Chevron and London-based BP are expected to accept Chavez's terms.
But two sources said Monday that Exxon Mobil and ConocoPhillips will not sign the memorandum. They may have to leave the country if they can't strike a deal by today.
Energy analyst Alberto Quiros says oil producers always want a bigger share of the pie when prices go up.
Alberto Quiros [voiced translation]: I think it's quite logical that the owners of the oil want a larger share of the business now that oil is at $60 a barrel.
But he says Chavez's aggressive negotiating tactics could lead to reduced investment in Venezuela's oilfields. That could result in lower oil production.
In Caracas, I'm Brian Ellsworth for Marketplace.
