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Nicaragua, Esso near oil import storage accord

Eric Watkins
Senior Correspondent

LOS ANGELES, Dec. 13 -- Nicaraguan President Daniel Ortega said his country is close to an agreement with ExxonMobil Corp. subsidiary Esso that would allow increased imports of crude oil from Venezuela next year. Ortega's statement, unconfirmed by ExxonMobil, follows stepped up pressure on the firm.

Last week Ortega ordered energy and mines minister Emilio Rappaccioli to begin "quickly" drafting a proposal to nationalize the import of oil, claiming that Esso officials were "acting like true mercenaries, speculators, [and] bleeding the Nicaraguan people."

Ortega alleged that Esso had rejected a request to store the additional supplies of Venezuelan crude. Ortega wants to increase the amount of oil received from Venezuela by 8 million bbl a year to address the country's energy problem and to begin refining for products exports.

However, he said Nicaragua cannot import the additional 8 million bbl because it can store only 2 million bbl. Ortega wants the additional storage capacity to be provided by Esso which owns import and storage facilities at Corinto port.

An earlier dispute between the company and the government over use of the Esso terminal led to the temporary seizure of the facility in August (OGJ Online, Aug. 23, 2007). The government returned the terminal after Esso signed a memorandum of understanding with state oil company Petronic granting its shared use.

The increased Venezuelan imports follow an earlier agreement between Ortega and Venezuelan President Hugo Chavez who jointly launched construction in July of a 150,000 b/d refinery at Piedras Blancas, near Nicaragua's Pacific coast (OGJ Online, July 23, 2007).

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