Processing Magazine

Venezuela Considered Swap In Exxon Dispute

February 25, 2008
According to Reuters, Venezuela offered to resolve its nationalization dispute with U.S. energy giant Exxon Mobil by withdrawing from its stake in the Chalmette refinery, a top energy official told local media in comments reported recently.

Exxon has acquired court orders freezing up to $12 billion in Venezuelan assets, after leftist President Hugo Chavez took over the Cerro Negro heavy oil project last year as part of a wave of energy-sector takeovers.

Deputy Oil Minister Bernard Mommer said pulling out of Chalmette, a joint venture with Exxon Mobil in Louisiana, had been on the table when the government took over Cerro Negro.

He added that Venezuela''s insistence that future contracts not contain international arbitration clauses sparked the initial discord with Exxon, which left the OPEC nation last year after failing to reach an agreement on the state takeover ordered by President Hugo Chavez.

Analysts have suggested that Venezuela could offer Exxon its 50 percent stake in Chalmette as a way of settling the escalating dispute.

Venezuela cut commercial ties with Exxon to protest the legal assault, but assured it would continue to supply Chalmette, which receives most of the crude it processes from Cerro Negro project.

Mommer last week said state oil company PDVSA would not be able to sell its stake in Chalmette without Exxon''s permission.