Host Nations Escalate
Demands on Oil Firms;
‘Some Tough Decisions’
By RUSSELL GOLD
June 27, 2007; Page A1
Exxon Mobil Corp. and ConocoPhillips are walking away from their multibillion-dollar investments in Venezuela, further evidence that the relationship between Western oil companies and oil-rich countries is more troubled than at any point since the 1970s.
The rising tension is forcing companies to choose whether to accept less control of investments and smaller returns in order to remain in countries with ample natural resources. That could have big implications for Western oil companies, which are having trouble tapping new reserves, as well as for global consumers and their growing thirst for oil.
The companies feel they won’t get adequate value from the Venezuelan government, so they may pursue arbitration rulings that, even if favorable, mean a long wait for compensation. But the need to replace significant holdings could intensify exploration and result in new finds elsewhere, as happened after the last widespread purge of Western majors from developing nations. read more
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