Business | Oil & Gas
Exxon open to talks but ready for a fight
ExxonMobil is ready to talk to the Venezuelan government to settle a dispute over the forced acquisition of its oilfields, after gaining a court order to freeze $12 billion of Venezuelan assets, a senior executive said on Monday.
- Reuters
- Published: 00:53 February 20, 2008
London: ExxonMobil is ready to talk to the Venezuelan government to settle a dispute over the forced acquisition of its oilfields, after gaining a court order to freeze $12 billion of Venezuelan assets, a senior executive said on Monday.
But the US oil major said it was also prepared to fight to assert its interests if it has to.
"We have indicated to the Venezuelan government that we are still prepared to talk, but should that not be the case, we will protect our rights," Robert Olsen, chairman of ExxonMobil International, said in an interview on the sidelines of the International Petro-leum Week conference in London.
Venezuela's Leftist President Hugo Chavez told overseas oil companies last year to cede a majority stake in oil projects or leave the country.
Most of the companies agreed and accepted bids for stakes in their projects from state oil company PDVSA, bids that analysts said were below market value. But Exxon and rival US oil major Conoco-Phillips opted to pull out rather than give in to government demands.
Olsen, who is also head of production for Europe, the Caspian and Russia, told the conference that resource-holding governments should stick to the terms they agree with foreign investors.
"Partnerships between international oil companies and host nations must therefore be built to last, with clearly understood, mutually compatible objectives and a commitment to contract sanctity over the duration of the project," he said.
Exxon has applied for international arbitration to settle the matter, and pending the outcome has convinced courts in the UK and the Netherlands to freeze up to $12 billion in Venezuelan assets to ensure funds would be available for compensation should Exxon win.
Criticism
Venezuela has criticised the asset freezes, claiming the value of the assets compulsorily purchased was less than a tenth of the amount frozen, and has threatened to cut oil supplies to the US in retaliation.
On Sunday, Chavez said Venezuela could sue Exxon Mobile for unpaid oil taxes.
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