Venezuela Oil Minister Makes Rare US Visit, Defends Policies

Venezuela Oil Minister Makes Rare US Visit, Defends Policies
(Copyright © 2010 Energy Intelligence Group, Inc.)
International Oil Daily Monday, April 19, 2010

In a rare visit to Washington, Venezuelan oil minister Rafael Ramirez on Friday defended his country’s foreign investment climate for heavy oil development and lamented that US leaders appear to be “badly informed” about Venezuela’s energy policies.
Ramirez — who is also president of state oil firm Petroleos de Venezuelas (PDV) — said his country is open to working with any foreign investors to develop resources within the country’s Orinoco heavy oil belt. He was addressing reporters at the headquarters of the Organization for American States.
The only two firms Venezuela has clashed with are Exxon Mobil and ConocoPhillips, he added, arguing that the two US majors were unwilling to respect Venezuela’s sovereignty over its hydrocarbon resources. Exxon and Conoco chose to exit heavy oil operations in Venezuela in 2006 after the government unilaterally changed their contracts to give PDV a majority stake in their projects.
“No one can exclude Venezuela from energy discussions,” Ramirez said, because Venezuela has the largest proven oil reserves in the western hemisphere. “We just ask that they respect our sovereignty, our laws and our social programs,” he added.
Unable to shoulder the costs of heavy oil development alone, Venezuela made some minor concessions to oil companies to improve the fiscal terms and encourage foreign investment in the Orinoco region. But it restricted foreign firms to holding minority stakes in heavy oil projects.
Ramirez said the primary purpose of his trip to Washington was to increase awareness of Venezuela’s energy policies at the “Energy and Climate Partnership for the Americas” summit last week. Many observers were surprised at Venezuela’s attendance.
“We are not going to sign any agreement. We are not going to sign any partnership. We are here to inform the US about what we have been doing,” Ramirez told reporters.
Venezuela is the fourth largest foreign supplier of crude to the US, but political disagreements have added a new layer of strain to US-Venezuela relations in recent years.
US politicians have blamed Venezuelan President Hugo Chavez for the discord, which arguably reached its peak when Chavez compared former President George W. Bush to a demon at an international gathering several years ago.
In a statement distributed to reporters, the Venezuelan embassy said Ramirez’s attendance at the summit marks a new phase in US-Venezuela relations.
“It is his first visit to the city since 2004, when the Bush Administration, due to political reasons, began limiting communications between the energy institutions of the two countries and eventually put on hold the energy agreement that had been active between the two countries since the 1980s,” the embassy said.
Ramirez drew attention to the fact that US major Chevron was part of one consortium that recently bid for acreage in the Carabobo area in the eastern part of the Orinoco region.
Aside from highlighting Chevron’s involvement in Venezuela, Ramirez pointed out the efforts of PDV’s US refining subsidiary Citgo, which has supplied heating oil at low cost to low-income Americans.
However, Ramirez said he thinks some Bush-era resentments toward Venezuela still linger.
US state department officials claim that they have tried to reach out to Venezuela, but that senior Venezuelan officials have not been responsive.
“In the US we still find people linked to the prior administration — and this has created a situation where even people who are genuinely interested in working with us are badly informed,” Ramirez added. “So we have been talking about how Venezuela has been diversifying our energy markets, to give authorities first-hand information from us.”
Lauren O’Neil, Washington

(Copyright © 2001-2010 Energy Intelligence Group, Inc. / Energy Intelligence Group (UK) Limited)


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