Conoco may have to 'leave the country,' Venezuelan minister

Caracas (Platts)--3May2007

Venezuelan Energy Minister Rafael Ramirez said Thursday that if
ConocoPhillips, the only company in the Orinoco heavy oil belt that didn't
sign an accord last week to transfer operations to Venezuela's PDVSA, did not
accept Venezuela's nationalization law it would "have to leave the country."

"ConocoPhillips, one of the most important companies simply said that it
didn't agree; it wouldn't sign," Ramirez said in an interview with state
channel VTV. "Here there are companies that still think that their interests
are higher than our laws and our dispositions."

PDVSA director Eulogio Del Pino, who heads the Orinoco negotiations, said
on Tuesday that ConocoPhillips still had an opportunity to negotiate a joint
venture by June 26 for its Petrozuata and Ameriven projects, in which PDVSA
would have a majority stake. But he said the company would be at a
disadvantage in the negotiations and that other companies that did sign the
accord, including ExxonMobil, Total and Chevron, would be the "priority" for
PDVSA.

PDVSA took over operations of the four Orinoco heavy oil projects, in
which BP and Norway's Statoil also participate, on May 1.

The Venezuelan government does not plan to buy back $4 billion in debt
from the four heavy oil projects, Ramirez also said.

"Each one of the companies has to assume that debt," Ramirez said. There
are "mechanisms of payback with the production of oil, and we are not going to
favor speculators that are buying those papers to make money."

Ramirez also said that PDVSA did not expect to compensate the private
companies in cash for their lower stakes in future joint ventures.

"We don't expect to spend money to be able to reach an agreement with the
companies," he said.

PDVSA has said in the past that it could compensate with crude or larger
production areas.

--newsdesk@platts.com