View Full Version : Venezuela's State Oil Company Halts Oil Sales To Exxon Mobil

02-13-2008, 10:08 AM
Venezuela's state oil company halts oil sales to Exxon Mobil


The Associated Press
Published: February 12, 2008

CARACAS, Venezuela: Venezuela's state oil company said Tuesday that it has stopped selling crude to Exxon Mobil Corp. and suspended commercial relations with the U.S.-based oil giant.

State-run Petroleos de Venezuela SA, or PDVSA, said in a statement that it "has paralyzed sales of crude to Exxon Mobil," in response to the company's "judicial-economic harassment."

President Hugo Chavez has also shaken oil markets with recent threats to entirely cut supply to the United States, in retaliation for Exxon's legal drive to freeze Venezuelan assets in a dispute over nationalized oil ventures.

It was not immediately clear what impact PDVSA's decision to cut supply to Exxon would have. Both Chavez and Oil Minister Rafael Ramirez have previously said that the Irving, Texas-based company is no longer welcome to do business in Venezuela.

"The legal actions carried out by the U.S. transnational are unnecessary ... and hostile," PDVSA said of Exxon's attempts to seize Venezuelan assets in U.S., British and Dutch courts.

Exxon is challenging the Chavez government's nationalization of one of four heavy oil projects in the Orinoco River basin, one of the world's richest oil deposits.

A British court issued an injunction last month, temporarily freezing up to US$12 billion (€8.3 billion) in PDVSA assets abroad. Exxon is also challenging the nationalization in a U.S. court in New York.

Other oil companies, including Chevron Corp., France's Total, Britain's BP PLC and Norway's StatoilHydro ASA, negotiated deals with Venezuela to continue as minority partners in Orinoco projects. ConocoPhillips and Exxon balked at the tougher terms, and have been in compensation talks with PDVSA since.

Exxon is taking the dispute to international arbitration, to which Venezuela has agreed.

"PDVSA will completely honor the existing contractual commitments relative to common investments with Exxon Mobil abroad, reserving the right to terminate those contracts whose terms permit them to be rescinded," the state oil company said.