March 15, 2007
Venezuela offers deal-by-deal oil compensation

(Reuters) - "Venezuela is negotiating how international energy companies will be compensated for their stakes in four multi-billion dollar oil projects, Energy Minister Rafael Ramírez.

The OPEC nation is taking a majority shares in the projects, which partner state oil company PDVSA with majors such as Exxon Mobil and ConocoPhillips from May 1.

Ramírez had previously suggested companies would be compensated for the shares PDVSA would acquire with oil instead of cash. But he said each compensation will be on a deal-by-deal basis.

'There are distinct options. It depends on each case, with each company we have distinct methods to compensate,' he told reporters when asked if companies would receive oil for their stakes (...)

Left wing President Hugo Chávez says the projects, which produce around 600,000 barrels per day of synthetic oil, should have at least a 60 percent state participation rather than the current majority foreign ownership.

Ramírez said the process, which is expected to be completed by June 26, was already underway.

'We are following the program established in the law -- now we have the transition committees,' the minister said, speaking after attending an OPEC meeting.

Bouyed by a landslide re-election win last year, Chávez has launched a sweeping nationalization plan for the sectors of the economy he regards as strategic: energy, telecommunications and power utilities.

All of PDVSA's partners in the Orinoco projects have agreed to cede operating control to PDVSA. The new ventures will be similar to mixed companies created by the government over the past two years from smaller oil partnerships with international firms.

In addition to Exxon and Conoco, Chevron Corp. and France's Total are partnered with PDVSA to develop the Orinoco region's reserves".