March 17, 2012 at 11:44 pm #1906
Venezuela To End All Ventures With Exxon Mobil
By Pierre Bertrand: Subscribe to Pierre’s RSS feed
March 16, 2012 4:57 PM GMT
Venezuela’s state-run oil company will terminate all ventures with Exxon Mobil, the biggest U.S. oil company, when arbitration proceedings conclude, Oil Minister Rafael Ramirez said.
The dispute between Petroleos de Venezuela SA and Exxon stems from 2007 nationalization of foreign assets by President Hugo Chavez. ConocoPhillips also had assets confiscated.Exxon Mobil spokesman Patrick McGinn said the only joint venture the company has with PDVSA is a shared stake in the Chalmette Refinery in Louisiana. Exxon Mobil had no other comment.
PDVSA wants to upgrade one of its facilities into a full refinery so that Venezuelan crude oil doesn’t have to leave for the U.S. for refining, Bloomberg reported.
The Chalmette facility can refine as much as 192,000 barrels of oil a day.
Exxon Mobil has been wrangling in arbitration court in Washington, D.C. for the fair market price of its seized holdings in Venezuela. A final determination could come as soon as year-end or 2013, Ramirez told the daily El Mundo, Bloomberg reported.
Chavez offered to reimburse Exxon Mobil what would have been the book value of the company’s holdings. ExxonMobil demanded more. That led to the current arbitration.
In January, the International Chamber of Commerce ruled in favor of Chavez, ordering his government to pay $907 million from PDVSA to Exxon Mobil in fair compensation, roughly the book value of the company’s holdings. Meanwhile, analysts estimated the market value could likely be calculated in the billions of dollars.The International Centre for Settlement of Investment Disputes in Washington, D.C. hasn’t made a final ruling on the matter.
March 17, 2012 at 11:48 pm #4685
Here is update on PDVSA vs XOM dispute over stolen Venezuelan JV Upgrader assets.
Typical Chavez if have abide by rules/laws then I wont participate. Since International Courts ruled he only had pay book value but article left out fact VZ has supply crude to Chalmette Refinery under LT contract terms – so not sure if case fits rhetoric of Chavez since courts also said failure supply would allow XOM sue Chavez.
PDVSA/Chavez/Venezuela has already lost ground on crude supply since both Caribbean Refineries – Hovensa & Aruba have closed. This puts another 330-400 MBD Bitumen Syncrude back on the market and is equal to what was placed with China Refineries in new contracts. This also puts his production & distrubition of crude at odds with position here. Course he is shipping crude to China that takes 30 days vs 7 days to US and at nearly triple freight cost to Asia …… so common & economic sense do not carry much weight in todays PDVSA evaluations.
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