[StBernard] Exxon Mobil `Isolated' by Tactics, Venezuela Says (Correct)

[Westley Annis]

Exxon Mobil `Isolated' by Tactics, Venezuela Says (Correct) 

By Steven Bodzin

(Corrects to say Venezuela may pull out of Chalmette refinery in fifth
paragraph of story published Feb. 19.) 

Feb. 19 (Bloomberg) -- Exxon Mobil Corp. is ``isolated'' in its
``belligerent'' approach to talks with Venezuela over oilfield takeovers,
said Rafael Ramirez, the South American country's energy and oil minister. 

Venezuela wants to go back to talking with Irving, Texas- based Exxon
through arbitration, free from the company's attempts to freeze Petroleos de
Venezuela SA assets around the world, Ramirez told reporters today at a
ceremony in which Italy's Eni SpA agreed to drop an arbitration claim. 

Exxon filed for arbitration last year with Venezuela over how much the
company would be paid for oil projects where Venezuela demanded operating
control and a majority ownership stake. Exxon left Venezuela rather than
accept the new terms and filed for arbitration, as allowed by the company's
contracts. 

Exxon also filed lawsuits in the U.K., the U.S., the Netherlands and the
Netherlands Antilles to freeze assets of the state oil company. 

The energy minister also said Venezuela may pull out of a refinery in
Chalmette, Louisiana, which it owns in a 50-50 joint venture with Exxon. 

He said the refinery assets are worth more than Exxon's Venezuela holdings,
which he said were worth less than $1 billion. 

``We remain willing to engage in substantive discussions with the Venezuelan
government,'' Exxon spokeswoman Margaret Ross said today in an e-mail. 

Eni Agreement 

Eni joined more than 50 companies that have accepted new pacts by agreeing
today to drop arbitration over the country's takeover of the Dacion oil
field, Ramirez said. Eni will be paid ``book value'' of $700 million over
seven years, he said. 

The field's book value was 654 million euros ($963 million), according to a
2006 filing with the U.S. Securities and Exchange Commission. 

The conflict with Exxon, along with another arbitration filed by
ConocoPhillips, largely revolves around whether the companies should accept
book value, which is the value of an asset as carried on the company's
books, or the usually higher value of the asset if sold on the open market. 

Talks with ConocoPhillips continue, Ramirez said. He declined to say how
much Venezuela expected to pay the Houston- based company for projects it
abandoned following unilateral government contract changes last year. 

To contact the reporter on this story: Steven Bodzin in Caracas at
sbodzin at bloomberg.net . 

Last Updated: February 20, 2008 10:05 EST