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THE NEW YORK TIMES: Venezuela Takes Control of Total Oil Field

Apr 4th, 2006
by admin.

By THE ASSOCIATED PRESS
CARACAS, Venezuela (AP) — Venezuela tightened its grip on the petroleum sector after taking control of an oil field from Total S.A. when the French company refused to sign an agreement to turn the site over to a state-run joint venture.
State oil company Petroleos de Venezuela SA, or PDVSA, ''took control of our operations at Jusepin. It was during the weekend,'' Total spokeswoman Patricia Marie told The Associated Press by telephone from the company's headquarters in Paris.
The move is another step in Venezuela's campaign to take on Big Oil at a time when rising oil prices, political instability in the Mideast and Nigeria and new buyers in Asia have put the world's fifth-largest oil exporter in a winning position.
Last week, Venezuela's oil minister, Rafael Ramirez, said of Exxon Mobil Corp. ''we don't want them to be here'' because the Irving, Texas-based company has resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to re-nationalize the oil industry.
The government has increasingly sought projects with state-controlled oil companies, including China's CNPC, India's ONGC and Iran's Petropars.
In the case of Total, it operated the oil field independently under a contract with the government. Total was unable to immediately provide further details, including how many Total employees work at the site.
The 30,000 barrel-a-day Jusepin oil field was one of 32 in the country that have been run by private oil companies under contract. Venezuela demanded last year those contracts be changed into joint ventures giving PDVSA a minimum 60-percent stake.
On Friday, 17 oil companies including Spanish-Argentine Repsol YPF, Royal Dutch Shell PLC and China National Petroleum, signed on to the new legal framework.
''We didn't migrate the field … and PDVSA took it. That's logical,'' Marie said, adding the company had not made any formal decision yet on how to proceed.
Meanwhile, Italian oil and gas company Eni SpA said Monday that PDVSA had unilaterally terminated its contract at the Dacion oil field on Saturday.
PDVSA had told the company that management of the site will be transferred to personnel appointed by the state oil company, Eni said in a statement.
The Jusepin oil field in eastern Venezuela has been producing about 30,000 barrels a day. PDVSA awarded Total a 55 percent stake in the field and British Petroleum PLC a 45 percent stake under 1993 license agreement.
Eni had a 100 percent stake in the Dacion field.

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