Business | Oil & Gas
Venezuela bars Exxon from $3b project
ExxonMobil was excluded from a $3 billion olefins project in eastern Venezuela because the company was not qualified, President Hugo Chavez said on Wednesday.
- Reuters
- Published: 00:00 February 10, 2006
Caracas: ExxonMobil was excluded from a $3 billion olefins project in eastern Venezuela because the company was not qualified, President Hugo Chavez said on Wednesday.
"We excluded them because they don't meet the requisites of the project," Chavez said, stressing that ExxonMobil did not voluntarily leave the project.
ExxonMobil on Tuesday said state petrochemicals firm Pequiven had terminated a Preliminary Development Agreement (PDA) for a planned 50-50 joint venture sketched out in 2004 to develop an olefins plant. ExxonMobil's removal from the olefins project comes after the company consistently opposed Venezuela's efforts to change the terms of the contracts.
Pequiven said on Wed-nesday it would go ahead with the plant and was seeking other partners.
Chavez, a harsh critic of the US government, has worked to increase energy ties with countries like Iran and China and reduce Venezuela's reliance on US markets and corporations.
"For us it's much more important to have Latin American companies working with us than to have North American companies working with us," Chavez said.
He noted Venezuela is working with Brazilian chemical company Bras-kem on a $250 million propylene plant in western Venezuela.
Pequiven said the government has roughly $4 billion in a national development fund earmarked for petrochemicals, some of which could be used to finance the olefins project.
Left winger Chavez last year launched a major campaign to boost the petrochemical sector, aiming to create new downstream jobs and reduce dependence on oil revenues.
Chavez has promised a socialist revolution and a new economic vision dubbed "endogenous development."
Venezuela the world's No. 5 crude oil exporter hopes to boost petrochemical production to 25 million tonnes per year by 2012 from 11.4 million tonnes in 2005 through an ambitious $10 billion investment program.
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