Business | Oil & Gas

Venezuela to pay ENI $700m compensation

Venezuela agreed on Tuesday to pay ENI $700 million in cash for the takeover of an oil field but hardened its stance in a compensation battle with ExxonMobil Corp over another nationalisation.

  • Reuters
  • Published: 01:15 February 21, 2008
  • Gulf News

Caracas: Venezuela agreed on Tuesday to pay ENI $700 million in cash for the takeover of an oil field but hardened its stance in a compensation battle with ExxonMobil Corp over another nationalisation.

Oil minister Rafael Ramirez said 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 at a ceremony to sign the accord.

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 has 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.

A day after Exxon said it was still open to talks with Venezuela, Ramirez said he did not rule out negotiation with the oil giant despite the asset freeze. He said the fight with Exxon was one factor pushing oil prices up.

Venezuela's socialist president, Hugo Chavez, has threatened to cut off oil shipments to the US over the conflict and Venezuela stopped some exports to Exxon in retaliation for the asset freeze.

Ramirez also warned that Venezuela could pull out of its refinery joint venture in Chalmette, Louisiana, with the Texan company over the dispute.

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