Petro Canada pulls out of Venezuela

[Ma Deuce]

Associated Press
Petro-Canada Leaving Venezuela
Associated Press 06.27.07, 7:56 PM ET

Petro-Canada has decided to pull out of Venezuela and has reached an agreement with the state oil company on compensation for its oil investments, the Venezuelan government said.

Petro-Canada (nyse: PCZ - news - people ) had partnered with Exxon Mobil Corp. (nyse: XOM - news - people ), which is also withdrawing from Venezuela, in developing the La Ceiba block near western Lake Maracaibo. The block has not yet begun producing oil.

President Hugo Chavez's government has required all private companies to accept minority stakes in oil production projects and join state-controlled joint ventures.

Oil Minister Rafael Ramirez told a news conference Tuesday that state oil company Petroleos de Venezuela SA, or PDVSA, was unable to reach an agreement with Petro-Canada.

"Petro-Canada has decided on the culmination of its participation in its businesses in the country and compensation has been agreed upon between the companies that has already been accepted by both parties," Ramirez said. That compensation was not disclosed.

Petro-Canada and Exxon Mobil each had a 50 percent stake in La Ceiba but those shareholdings have passed entirely to PDVSA, Ramirez said.

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

[mingo]

And this is the great evil of Hugo Chavez. This is why he is listed by the right as a "Madman" and may soon be added to the "axis of evil". He's only a threat to the profit margins of big oil, but that's enough.

Ok, fine, it's communism, but so what. Venezuela doesn't have us targeted with ICBMs, they don't have any nuclear submarines. They just use a economic system different than ours. Communism does have a great track record and may fail in 2 years to 4 decades, but how is this a threat to us?

I know the OP didn't really pose any of these questions, but I'm frustrated by the rights painting Chavez as the Great Satan, when he's nothing of the sort.

[acesand8s]

ConocoPhillips also pulled out, and Chevron, Total, BP, and Statoil accepted the minority stakes. I imagine Conoco, Exxon, and Petro-Canada will go the arbitration route to try to get compensation. Didn't BP do that and win against Libya a couple decades back?

It's bad timing for Exxon-Mobile; I think they're also facing pushback from Russia. BP and Royal Dutch Shell already got hit there, transferring their stakes to Gazprom.

[K. A. Pital]

On the other hand, Gazprom and Rosneft are investing in joint ventures with Venezuela

[Ma Deuce]

I imagine Conoco, Exxon, and Petro-Canada will go the arbitration route to try to get compensation.

Not sure about the other two, but Petro-Canada has already worked out a compensation agreement with the Venezuelan government, according to the article.