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04/05/2006:

"Venezuela Seizes Control of Two Oil Fields"

LIMA, Peru, April 3 — In another move against foreign oil companies, Venezuela's populist government said Monday that it had taken control of fields operated by two European energy giants after they challenged new rules that give the state extensive control over 32 mostly marginal fields that, until now, had been managed by foreign multinationals.

The action, which happened Saturday, takes over fields from Total of France and Eni of Italy and it came just days after Venezuela's energy minister, Rafael Ramírez, publicly said that Exxon Mobil was not welcome in Venezuela after a dispute over the company's stake in the minor Quiamare-La Ceiba field.

To avoid new terms that gave the state a majority stake in the field, Exxon Mobil sold its stake to Repsol of Spain, though Exxon Mobil, the world's largest publicly traded oil company, still holds a 42 percent stake in a much larger heavy-oil project at Cerro Negro.

Last week, the National Assembly, which is completely controlled by President Hugo Chávez, approved a system governing how the state oil company, Petróleos de Venezuela, will control projects that account for about one-fifth of Venezuela's oil production. The system, which gives the state at least a 60 percent stake in projects where foreign oil companies were once paid production fees, was signed on Monday by 16 companies that include Petrobras of Brazil, Chevron and Royal Dutch Shell.

But Total and Eni, the third- and fourth-largest European oil companies, were unable to reach deals with the government before Friday's deadline, prompting Venezuela to announce it had taken control of their fields.
nytimes.com