Exxon, Conoco drop Venezuela oil projects

Exxon Mobil Corp. and ConocoPhillips have decided to abandon their heavy crude oil projects in eastern Venezuela rather than cede majority ownership and operating control to the government, Venezuelan officials said Tuesday.

President Hugo Chavez had set Tuesday as the deadline for the six foreign owners of four mega-projects in Venezuela’s Orinoco Belt region to agree to terms of turning over control to Petroleos de Venezuela, or PDVSA, the state-owned oil company.
Since the early 1990s, the companies have invested about $17 billion in complex methods and machinery to pump, transport and process oil with the consistency of tar.

ConocoPhillips stands to lose close to 5% of its global oil production by walking away from the Orinoco.

In a statement late Tuesday afternoon, the Houston-based company said it was bracing for the loss of the entire $4.5-billion value of its two Orinoco projects, though it is continuing to negotiate with the Chavez government for “appropriate compensation.”

Irving, Texas-based Exxon Mobil, with a much larger scope of oil production operations, will lose 2% of oil production.

Los Angeles Times