Venezuela denies oil asset freeze

[[R_H]]

BBC

Venezuela's state-run oil firm has denied that US oil giant Exxon Mobil had won a court order to freeze up to $12bn (£6bn) of its assets.

PDVSA said that while it accepted that $300m in cash had been frozen, this was only a "transitory measure".

Exxon has been fighting for monetary compensation since Venezuelan president Hugo Chavez siezed its stake in heavy oil projects in the country last June.

Arbitration between the two firms is due later this year.

Oil Minister Rafael Ramirez accused Exxon of "judicial terrorism" but said the court actions "don't have any direct affect over our operations, over our assets".

An Exxon spokeswoman said the firm had no comment on Mr Ramirez's comments.

'Proven reserves'

Venezuela took over the oil project as part of a nationalisation drive.

President Chavez's government took control of exploration projects in the Orinoco Belt, which had been among the last privately-run fields in the country.

Exxon has taken action in New York, London and the Netherlands challenging the terms of the nationalisation.

It has not said how much compensation it wants for the 41.7% stake in the Orinoco Belt oil field - worth an estimated $750m (£370m).

The Orinoco Belt is the country's most important oil area, with massive potential.

There are proven reserves of at least 80 billion barrels, but there could be enough there to make Venezuela the world's biggest source of oil.

Four major companies - US-based Chevron, the UK's BP, French group Total and Norway's Statoil - accepted the government's move.

Only Exxon and ConocoPhillips refused to accept the terms of the deal, which made them junior partners in the project, by the June deadline.

[J]

And now it gets interesting

Reuters link

UPDATE 3-Venezuela threatens to stop US oil sales over Exxon
Sun Feb 10, 2008 6:16pm EST

(Recasts, adds quote, background paragraphs 1, 6, 11-12)

By Saul Hudson

CARACAS, Feb 10 (Reuters) - President Hugo Chavez on Sunday threatened to stop sending oil to the United States unless it halted an "economic war" that he said included an Exxon Mobil lawsuit freezing $12 billion in Venezuelan assets.

The anti-American leader of a major crude exporter to the United States also warned that such U.S. aggression could cause world oil prices to spike to $200 a barrel.

Oil prices rose this week in part because of the self-styled socialist revolutionary's dispute with the largest U.S. company over compensation for Chavez's nationalization last year of an Exxon Mobil Corp (XOM.N: Quote, Profile, Research) project.

The administration of President George W. Bush has distanced itself from the Exxon legal offensive, in which the oil company won international court orders freezing assets of the state oil company PDVSA.

"If you freeze us, if you really manage to freeze us, if you damage us, then we will hurt you. Do you know how? We are not going to send oil to the United States, Mr. Bush, Mr. Danger," Chavez said on his weekly TV show.

"Venezuela will join in your economic war and other countries will be with us in the economic war," added the ally of oil producers such as Iran and Ecuador.

Chavez has frequently issued conditional threats to stop shipments to its biggest oil customer, but has maintained supplies despite clashing with Washington over everything from crude prices to free trade to democracy.

"Never again will they rob us -- the Exxon Mobil bandits. They are imperial, American bandits, white-collared thieves. They turn governments corrupt, they oust governments. They supported the invasion of Iraq," he said.

Exxon retaliated for the seizure of a heavy crude upgrading project, winning the first big court battle over compensation in a wave of takeovers that Chavez says will help create a socialist state.

The court rulings in several countries mean the state oil company -- Chavez's main income source -- cannot sell certain assets or move some funds while the compensation case is reviewed.

BIG OIL STRIKES BACK

Exxon's move is the boldest challenge yet by an oil major against any of the governments from Russia to Ecuador that have moved to increase their control over natural resources as energy and commodity prices have soared.

Industry analysts believe other companies could follow Exxon's lead if it prevails in a court battle that could take several years.

Chavez, who calls capitalism an evil, accuses big oil companies and large consumer nations of seeking to control the natural resources of major producers such as Venezuela.

His comments on Sunday followed days of a blitz on state television of programs and advertisements denouncing Exxon as a predator company seeking to plunder Venezuela.

The court orders were a new blow to Chavez, who lost a referendum on expanding his powers and enshrining socialism as a state goal in December and has struggled for months to combat rampant inflation and chronic food shortages. (Additional reporting by Enrique Andres Pretel; Editing by Maureen Bavdek and Braden Reddall)

It's likely another rah-rah speech for domestic consumption but you never know...

[Jadeite]

If he does, we can start a betting pool on when he gets whacked by the CIA or ousted in a coup.

[Elaro]

If he does, we can start a betting pool on when he gets whacked by the CIA or ousted in a coup.

I'll put a five on being ousted by a coup instigated by the CIA.

[Sea Skimmer]

If he does, we can start a betting pool on when he gets whacked by the CIA or ousted in a coup.

I'll put a five on being ousted by a coup instigated by the CIA.

I’m guessing neither of you read the newspapers in 2002. They already tried a coup, at a time when he had much less power then he does today, and it utterly failed. It not going to happen again, and external pressure will only strength his position further.

[K. A. Pital]

I'll put a five on being ousted by a coup instigated by the CIA.

That shit failed already. Next time someone does it, he ensures Chavez becomes president-for-life like Castro.

[CJvR]

"Never again will they rob us -- the Exxon Mobil bandits. They are imperial, American bandits, white-collared thieves.

LOL! Stop the thives! They are stealing what we honestly stole first!!!

[K. A. Pital]

They are stealing what we honestly stole first!!!

That's interesting. Did Venezuela get those fields in a war of conquest or something?

[CJvR]

No by nationalization.

[Siege]

Does anyone know whether Exxon actually already invested in that project, and has thus lost actual money to the nationalization, or did they only sign a piece of paper saying they'd be in for x percent of the future development of the field, and thus lost only hypothetical future profits?

[CJvR]

Next target apparently is the EVIL international imperialistic diary industry...

Italian Parmalat and Swizz Nestle Can be forced out of their Venezuelan diary plants.

Say what you will about Chavez but he sure is entertaining, from the outside at least...

[K. A. Pital]

No by nationalization.

If that nation elects a leader who says "out" to corporations, how that's any more "stealing" than a company buying out oil wells inside a foreign nation, using corruption to take control of that nation's natural resources and possibly even territory (Suez Canal)?

The natural resources of a country belong to it's people, or?

[CJvR]

Nothing prevented Venezuela from prospecting and drill on their own expence and risk rather than moving in and take over after someone else have struck gold.

[CJvR]

Btw: the Arabs and Ottomans and other flavors of Mid-east regimes have ruled that area for a millenneum without there being any canal built. Then some evil imperialist bastards build a canal and suddenly it is the property of the locals? LOL!

[InnocentBystander]

Does anyone know whether Exxon actually already invested in that project, and has thus lost actual money to the nationalization, or did they only sign a piece of paper saying they'd be in for x percent of the future development of the field, and thus lost only hypothetical future profits?

Oil exploration is very expensive. Oil companies risk tens of millions of dollars conducting exploration, well before they have provable reserves.

[brianeyci]

Sorry CJvR, that's the risk corporations take working in foreign countries. For example, foreign corporations suck it up all the time when China invents a new law to make their life more difficult. If a country chooses to nationalize, then the foreign corporation either plays ball or loses it all.

They need to suck it up and stop whining like the other oil companies.

It's been slanted towards multinationals exploiting pissant countries for so long, it's time pissant countries return the favor. Chavez might be a piece of shit, but pick multinational corporation which doesn't give a shit about citizens of another country and pick Chavez who does and I pick Chavez all the time. When Suez Canal happened the corporate rape of the world wasn't to such a great degree.

[K. A. Pital]

Nothing prevented Venezuela from prospecting and drill on their own expence and risk rather than moving in and take over after someone else have struck gold.

When you aquire natural resources that belong to another nation, that nation has the full right to tell you to shove that. Not only Venezuela, but any nation.

Btw: the Arabs and Ottomans and other flavors of Mid-east regimes have ruled that area for a millenneum without there being any canal built. Then some evil imperialist bastards build a canal and suddenly it is the property of the locals? LOL!

Let's spin that shit around your head: British Empire built lots of infrastructure in colonial India. India told Britain to fuck off. The infrastructure was seized. I guess that Ghandi robber was a thief from noble British progressors! [as opposed to "evil imperialist bastards" who they really were]

But just FYI, asstard:
Suez Canal
What do we see here? The canal was built first even by ancient rulers of that territory. "Without there being any canal built"? Shove your racist bullcrap right where it belongs to - the people of that region weren't so inept as to never realize the need for a canal for a millenium.

Oh, and nevermind that the last version of the canal was, in fact, built by "imperialist bastards" using forced labour of Egyptians, right, asshole?

[HemlockGrey]

When you aquire natural resources that belong to another nation, that nation has the full right to tell you to shove that. Not only Venezuela, but any nation.

But Venezuela doesn't just get the oil, does it? It also gets all the infrastructure that Exxon has built to exploit the reserves. At least some compensation is in order, but of course that wouldn't play with Chavez's "I've come to slay the capitalist dragon!" meme.

[K. A. Pital]

It also gets all the infrastructure that Exxon has built to exploit the reserves.

See my India or Suez example. They overtook British infrastructure, didn't they? Besides, it's not as if in Venezuela they just take that infrastructure, they're buying it, aren't they?

The deal was to sell the oil extraction facilities projects to Venezuela. They refused and got kicked out - well, tough luck. Sorry if my sympathyometer isn't exactly high for Exxon.

[lazerus]

It also gets all the infrastructure that Exxon has built to exploit the reserves.

See my India or Suez example. They overtook British infrastructure, didn't they? Besides, it's not as if in Venezuela they just take that infrastructure, they're buying it, aren't they?

The deal was to sell the oil extraction facilities projects to Venezuela. They refused and got kicked out - well, tough luck. Sorry if my sympathyometer isn't exactly high for Exxon.

False analogy you fucking retard. England conquered India by force of arms, Exxon bought the land. England demanding compensation for it's infrastructure would be as if I stole your car, painted it, and demanded you pay me for the paint when you eventually got it back. This is more aptly compared to my buying your car, spending my own money to paint it, only for you to say "Yeah, on second thought, I think it's still mine." And then taking it back.

[acesand8s]

It also gets all the infrastructure that Exxon has built to exploit the reserves.

See my India or Suez example. They overtook British infrastructure, didn't they? Besides, it's not as if in Venezuela they just take that infrastructure, they're buying it, aren't they?

The deal was to sell the oil extraction facilities projects to Venezuela. They refused and got kicked out - well, tough luck. Sorry if my sympathyometer isn't exactly high for Exxon.

PDVSA paid Total and Statoil less than half the estimated market value of their stake in the Sincor venture. (That's excluding the fact that ~10% of the compensation is actually to be refunded back to PDVSA to pay costs for establishing the new ownership structure on Sincor.) There's no reason for Exxon or Chevron to expect anything different.

[CJvR]

Sorry CJvR, that's the risk corporations take working in foreign countries.

Sure it is. A nation can do whatever it wants within it's own borders. The amusing thing is the Venzuelan whining when Exxon turn the table on them.

[InnocentBystander]

Nothing prevented Venezuela from prospecting and drill on their own expence and risk rather than moving in and take over after someone else have struck gold.

When you aquire natural resources that belong to another nation, that nation has the full right to tell you to shove that. Not only Venezuela, but any nation.

So governments are under no obligations to fulfill the agreements they sign? It’s not like Exxon flew in one day and started drilling for oil; they paid for a license, which the government issued, allowing them to find and extract natural resources.

[CJvR]

The canal was built first even by ancient rulers of that territory. "Without there being any canal built"? Shove your racist bullcrap right where it belongs to - the people of that region weren't so inept as to never realize the need for a canal for a millenium.

Since that canal stopped working some 1200 years ago and remained closed until 1869 the area was indeed canal-less for about a millenneum - what a racist fact!

Sure anyone have the right to kick out foreigners and take their stuff, it is sort of a natural consequence on national soverignty - doesn't make it less thieving though. Having the thives whine and snivel about their victims attempting to get compensation is amusing though.

[K. A. Pital]

False analogy you fucking retard. England conquered India by force of arms, Exxon bought the land.

Oh wow, another brave warrior. How about Suez then? And you can fuck off - Venezuela didn't just seize the oil companies, didn't it? It proposed to strike a deal where the assets are sold to PDVSA, moron. Not "given back". So of course the analogy is false - Venezuela is not taking that under force of arms.

England demanding compensation for it's infrastructure would be as if I stole your car, painted it, and demanded you pay me for the paint when you eventually got it back.

Do you realize that taking natural resources from people under force of arms or under economic pressues, or just due to their infrastructure being not advanced enough to make use of them, doesn't change the fact that you take over another person's resources? The overtaking may have been done with consent of one government, but people can change that government and, whoops, demand changes. And Venezuela is not staging an armed revolt where it captures all of oil infrastructure just for free now, isn't it?

PDVSA paid Total and Statoil less than half the estimated market value of their stake in the Sincor venture.

So what were the terms of the deal?

So governments are under no obligations to fulfill the agreements they sign?

Actually if Government A signed one thing, but later this grows antipathetic to the people and they choose another Government which decides that A's deals are bad - too bad, but it's their right, and their territory. This is not a light act for a government either, and there are consequences for breaking deals; I'm not saying Venezuela should not deal with Exxon's stubborness right now.

Since that canal stopped working some 1200 years ago and remained closed until 1869 the area was indeed canal-less for about a millenneum - what a racist fact!

So, what's the deal? You mean the Egyptians could not have done it themselves with such ultra-progressive methods as the ones used by the French? And once again, did you mean "evil imperialist bastards" as a mock phrase, moron, when it seems to be very true?

It was built by Frenchman Ferdinand de Lesseps using Egyptian forced labour; an estimated 120,000 workers died during construction

...it is sort of a natural consequence on national soverignty - doesn't make it less thieving though.

Really? How about when a state breaks down and the newly independent regions take the infrastructure built by the metropoles? Is that "thieving"? Is any nationalization "thieving", moron? "Their stuff"? Are you saying property is an inviolable right or something, and whoever thinks otherwise is a "thief" (which is a criminal)? So I guess taxation of foreigners and nationalization, in the extreme case, are run by "thieves", allright.

Better inform the Interpol of your new legal definitions.