Foreign oil companies are finding it tough to ward off increasing pressure in Latin America as Honduras and Venezuela try to wield greater control over energy sector. However, U.S. oil firms have said that they will maintain their presence in Honduras, despite the state proclaiming it will seize control of oil storage containers temporarily. On the other hand Venezuela declined to negotiate with foreign oil companies over its vast nationalization plans.
President of Venezuela, Hugo Chavez has recently made his intention clear to nationalize major phone and power companies in which sector U.S. Companies have huge stakes. Oil minister of Venezuela Rafael Ramirez has out rightly stated that there was no possible negotiation with foreign companies.
However, Ramirez conceded that private companies can own minority stakes in the Orinoco River basin oil projects known for profitable contracts. Despite this concession Venezuela would maintain an effective majority control. Moreover, it’s not clear yet that whether foreign companies would contemplate this preposition.
On the other side, the latest decision of Honduras of controlling oil storage containers is likely to affect companies such as Chevron and Esso. The government decision has been described as an interim plan, which will remain until Conoco Philips would supply petrol and diesel at lower prices according to the arrangements in the contract.
The decision however, was taken only when the government failed to reach an agreement with oil companies Exxon Mobil and Chevron, which own terminals. As a matter of fact, Honduras does not produce crude oil of its own and it no longer owns a refinery.
The critics of the decision say that this is a clear indication of breach of law. According to the contract provisions the government can use the terminals in case of an emergency. However, U.S. says there no national emergency at present.
