Oil firms watchful

Oil majors under pressure from a wave of resource nationalization worldwide are likely to remain on the sidelines of Exxon Mobil Corp’s legal fight with Venezuela before launching into a similar battle. The biggest US company won court orders to freeze up to $12 billion of the OPEC nation’s oil assets around the globe as it fights for compensation for a project lost in President Hugo Chavez’s nationalization drive. Exxon’s challenge marks the fiercest rebuttal yet to the recent efforts by oil and natural gas producing nations to take advantage of soaring energy costs by changing contract terms to increase returns to the state.

I think the simple answer is, other companies are going to watch and wait and see if this approach of Exxon’s is effective,” said Mike Wittner, analyst with Societe Generale in London. Countries with large hydrocarbon reserves from Bolivia to Ecuador to Russia have been adjusting terms along with the surge in oil prices, which jumped from $10 a barrel in 1999 to a record $100 a barrel in January. US oil prices jumped $3.66 on Friday to $91.77 a barrel in part due to concerns about supplies from Venezuela,
one of the top exporters of crude to the United States.

Reuters