Venezuela Completes Seizure Of ConocoPhillips Gas Stake
October 02 2009 - 1:13PM
Dow Jones News
Venezuela state oil firm Petroleos de Venezuela said Friday it
has completed a previously announced plan to seize ConocoPhillips'
(COP) stake in a joint-venture natural-gas project with Chevron
Corp. (CVX).
"The transfer of these rights allows for the creation of a
joint-venture firm for the production of natural gas, with PdVSA
holding a 61% majority stake, and Chevron 39%," PdVSA said in a
statement.
The joint venture is for the Block 2 portion of the multi-block
Deltana offshore project, located in a continental shelf extension
of the Orinoco River delta along the country's eastern coast.
PdVSA officials said last year it would take over ConocoPhillips
stake and that the U.S. company would no longer be involved in
these natural-gas ventures since it is now involved in arbitration
proceedings with PdVSA.
Houston-based ConocoPhillips, the U.S.'s third-largest
integrated energy company, filed for arbitration against Venezuela
last year, seeking compensation for the state takeover of its other
assets in the Orinoco river basin.
In Friday's statement, PdVSA said it "only recognized audited
real expenses realized during the exploratory phase," which it said
has been the model used for compensation. It did not mention a
dollar figure or any payment plan for compensation.
Officials at ConocoPhillips were not immediately available for
comment.
PdVSA said ConocoPhillips and Chevron had begun exploring the
block in 2003 and said they found more than 7 billion cubic feet of
gas reserves. The PdVSA-Chevron joint venture is expected to
produce 750 million cubic feet of gas per day, it added.
Venezuela has taken over many privately owned firms, foreign and
local, as part of President Hugo Chavez' efforts to transform the
country's economy toward a "21st Century Socialism" model.
-By Dan Molinski, Dow Jones Newswires; 58-212-284-5651;
dan.molinski@dowjones.com