ConocoPhillips concerned about Orinoco work

ConocoPhillips Chief Executive Officer Jim Mulva said he is concerned about his company's heavy-oil production operations in Venezuela's Orinoco region.

Mar 2nd, 2007

By OGJ editors
HOUSTON, Mar. 2 -- ConocoPhillips Chief Executive Officer Jim Mulva said he is concerned about his company's heavy-oil production operations in Venezuela's Orinoco region.

His comment came in answer to questions from reporters on Mar. 1 during a Rice University Baker Institute conference on national oil companies.

Mulva was asked about Venezuelan President Hugo Chavez's recent comments that he has decreed that state-owned Petroleos de Venezuela SA take majority control of Orinoco projects by May 1.

Such a move could have "commercial and operating implications for heavy oil," Mulva said, noting that international oil companies have made massive investments there.

"It's important for us to start our discussions with the ministry and PDVSA," Mulva said, adding that it was "premature" to speculate on the possible outcome. "Obviously, there have been significant changes in Venezuela over the last several years."

Since last year, the Venezuelan government has been negotiating with international consortia operating in the Orinoco area, seeking a PDVSA majority stake in each project (OGJ, Jan. 15, 2007, p. 41).

Joint ventures of PDVSA with ExxonMobil Corp., Chevron Corp., ConocoPhillips, Total SA, BP PLC, and Statoil ASA produce about 600,000 b/d of tar-like Orinoco crude. PDVSA currently holds an average 40% stake in these ventures.

Except for Mulva's comments, the international oil companies have declined to comment until they have further details.

More in General Interest