American energy firms Exxon Mobil and Conoco Phillips have rejected Venezuelan government offer to work with the state-run Petroleos de Venezuela, S.A.
Venezuela has nationalized its oil industry and told international companies to either partner with PDVSA, or leave the South American country altogether.
The government is taking over majority control of operations in the country’s most important and rich oil field Orinoco Belt. As experts analyze that Orinoco Belt has a potential of 80 billion barrels that may make Venezuela the world’s largest oil producer.
Before nationalization, six oil drillers were drilling oil in the country’s oil reserve; PDVSA confirmed that only four drillers Norway’s Statoil, Britain’s BP, France’s Total and Chevron — plan to sign an accord that will keep them in the massive Orinoco oil reserve projects, whereas Conoco Phillips and Exxon Mobil may choose to leave Venezuela as they didn’t find an acceptable deal.
Venezuelan government has issued the deadline of 26th June to accept terms for the government to take a majority stake in four heavy-crude upgrading projects valued above $30 billion. They can produce 600,000 barrels per day in the Orinoco reserve.
If Conoco Phillips and Exxon Mobil don’t reconsider about the deal than US can face the shortage of oil supply to meet the growing demand of gasoline in the country. Oil prices are already firm on the $3 per gallon so it casts further doubt on how and where America will find its fuel supplies.
Chavez has pushed a nationalization drive this year, taking over U.S. companies’ assets in the telecommunications and electricity sectors as part of a self-styled socialist revolution in the fourth-largest exporter of oil to the United States.
Via: BBC
