Venezuela continues to play hardball with foreign oil companies. ConocoPhillips and ExxonMobil decide to simply leave the rapidly maturing socialist state, rather than acquiescing to the new requirement of accepting minority positions in their own business ventures.
The Economist: WHEN Venezuela's government announced this week that two American oil giants, Exxon Mobil and ConocoPhillips, would walk away from their large investment in the Orinoco heavy-oil belt rather than accept tough new contract terms, officials presented it as the recovery of sovereignty over another slice of the country's all-important oil industry. Some other Venezuelans saw a government blunder that could accelerate the decline of the state oil company, Petróleos de Venezuela (PDVSA).
Business Week: Right now, Venezuela is creating the biggest doubts. Its output has declined by about 25%, to 2.4 million barrels per day, since populist President Hugo Chávez came to power in 1999. The main reason: Chávez fired 75% of the managers at state oil company Petróleos de Venezuela (PDVSA) after a strike in 2003. That decision left PDVSA overstretched and ineffective. The plunge would have been disastrous had it not been for increased investment by foreigners.
Free Republic: ConocoPhillips and Exxon Mobil Corp. could hold a powerful card to make Venezuelan President Hugo Chavez bet his country's sizable American assets in the high-stakes nationalization of the Venezuelan oil industry, experts say. The Citgo subsidiary of Venezuela's national oil company has five refineries in the U.S. experts say could be targeted for seizure if a stalemate prompts one or both U.S. oil majors to seek recompense through international arbitration.