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US Oil Firm Hopeful about Renegotiations with Venezuela

U.S.-based oil company Chevron says it is continuing to negotiate new contracts with the Venezuelan government for the firm's operations in the country. From Miami, VOA's Brian Wagner reports that Venezuelan President Hugo Chavez is demanding a greater share of control over foreign oil operations.

Chevron and several other international oil firms have been working to reach new agreements with Venezuela to allow them to continue their operations in the nation. Venezuela's President Hugo Chavez has set a deadline of May First for oil firms to agree to hand over at least 60 percent of their operations to the state-run oil firm, or be forced to leave the country altogether.

Some industry experts have called the move an attempt at forced nationalization, and they say it may threaten the global oil market. U.S. officials also have criticized the measures, saying similar examples of state-controlled industry have failed in the past.

But Chevron's commercial manager for Latin America, Peter Sommer, says he is hopeful about the latest negotiations with Venezuela. "We're optimistic that under these conversions of the heavy-oil projects there's an opportunity for the companies to come out OK on these and to have the incentive to stay longer," he said.

Speaking at a conference by the University of Miami's Center for Hemispheric Policy, Sommer says Chevron renegotiated separate deals with Venezuela last year, and says the firm felt it was treated well.

Venezuela is also renegotiating its deals with U.S.-based firms Exxon Mobil and Conoco Phillips, Norway's Statoil, British Petroleum and Total of France.

The new contracts may bring significant changes for oil firms that have invested hundreds of millions of dollars in Venezuela's oil sector. The emphasis on state control in Venezuela, however, is not unusual for the oil sector, says Jorge Pinon, former head of Latin America operations for Amoco oil.

"About 80 percent of the [global] oil is in the hands of the state oil companies and not in the hands of the private oil companies," he said.

President Chavez has defended the need to change the oil agreements, saying the government has every right to seek control over natural resources on the nation's soil. He also has announced plans to take over control of Venezuela's largest private telephone company, CANTV, next month.