Venezuela paying italian company over oilfield takeover

Venezuela paying Italian company over oilfield takeover

CARACAS, Venezuela (Reuters) — Venezuela has agreed to pay Italy's Eni $700 million in cash for the takeover of an oil field but hardened its stance in a fierce compensation battle with ExxonMobil (XOM).
Oil Minister Rafael Ramirez said Tuesday that the government would make the payment to Eni for the Dacion heavy crude project over a seven-year period.
"The book value of the investments made by the transnational company in the Dacion field are $700 million and we have agreed to pay it over seven years," he said.
He said the agreement left Exxon isolated as the only company fighting with the government over a drive to increase state control of Venezuela's huge oil resources.
Exxon in recent weeks won court orders freezing up to $12 billion of Venezuela's assets, prompting state oil company PDVSA to sever commercial ties with America's biggest company.
Ramirez warned that Venezuela could pull out of its Chalmette, La., refinery joint venture with the Texas company over the dispute. He said the fight with Exxon was one factor helping support world oil prices.
Venezuela took over the Eni field in 2006 after negotiations with the government of socialist President Hugo Chavez to convert the Dacion subcontracting venture into a state-majority joint venture fell through.
"Eni believes this settlement represents an important step toward improving and consolidating the cooperation with local authorities and with PDVSA," the company said last week in statement.
Ramirez thanked Eni for its willingness to negotiate an agreement with Venezuela while slamming Exxon for challenging PDVSA over compensation for the nationalization last year of one of four Orinoco heavy oil projects.
"Eni never lost trust in our country," Ramirez was quoted as saying by the local Globovision television channel, which posted his comments on its website. He criticized what he called Exxon's "aggressive attitude."
Ramirez on Tuesday denied that Exxon's investments in the Orinoco region are worth billions of dollars, saying the company's "total assets in Venezuela are less than one billion dollars."
Contributing: Associated Press
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