Big Oil and Big Media vs. Venezuela

On June 27, the New York Times and Wall Street Journal vied for attention with feature stories on oil giants ExxonMobil and ConocoPhillips “walking away from their multi-billion-dollar investments in Venezuela” as the Journal put it or standing “Defiant in Venezuela” as the Times headlined. Both papers can barely contain their displeasure over Hugo Chavez wanting Venezuela to have majority ownership of its own assets and no longer let Big (foreign) Oil investors plunder them. Those days are over. State oil company PDVSA is now majority shareholder with a 78% interest in four Orinoco joint ventures. That’s up from previous stakes of from 30 to 49.9%. That’s how it should be, but it can’t stop the Journal and Times from whining about it.
What ExxonMobil and ConocoPhillips reject, oil giants Chevron, BP PLC, Total SA and Statoil ASA agreed to. They’re willing to accept less of a huge profit they’ll get by staying instead of none at all by pouting and walking away as their US counterparts did. Or did they? The Wall Street Journal reports “Conoco isn’t throwing in the towel in Venezuela yet. By not signing a deal, the Houston company kept open the option of pursuing compensation through arbitration.” Exxon, however, is mum on that option for now. Responding to Energy Minister Rafael Ramirez saying the two oil giants will lose their stakes in the Orinoco oil fields altogether, a company spokesperson expressed “disappoint(ment) that we have been unable to reach an agreement on the terms for migration to a mixed enterprise structure (but will) continue discussions with the Venezuelan government on a way forward.”

Venezuelanalysis