By Jens Erik Gould
May 26, 2005
This is part of a series of re-published articles I wrote in 2005 for the Daily Journal in Caracas.
Three foreign oil companies operating in Venezuela denied Wednesday's allegations that they broke production agreements.
A spokesperson for Norway's Statoil told The Daily Journal on Thursday that "miscommunication" existed between the company and Energy and Petroleum Minister Rafael RamÌrez.
Rafael RamÌrez on Wednesday accused Sincor, a strategic association formed by Norway's Statoil, France's Total and Petroleos de Venezuela (PDVSA), of exceeding production levels authorized by the National Congress in the 1990s. The minister called the situation a "scandalous case" and said a 30 percent royalty would be applied to all production above the agreed-upon level.
However, Statoil said that Sincor's production levels were approved by PDVSA and ministry. "We are absolutely sure that the approvals given by the Congress and the Ministry were realized in accordance with the law," said Statoil's spokesperson.
According to the Norwegian company, Sincor is producing 180,000 barrels per day (bpd) of upgraded crude in Faja del Orinoco, differing from the figure of 210,000 bpd given by RamÌrez yesterday.
"As of now, we have received no formal notification of the concerns expressed by Minister Ramirez regarding the strategic association Sincor," the company said.
Statoil added that it was looking forward to discussing the matter with RamÌrez.
France's Total also found RamÌrez' statements "surprising," reported El Universal on Thursday.
"We have absolute confidence in the solidity of the contracts and agreements that we signed, as well as our legal and fiscal position," said a Total spokesman late Wednesday. "We have received formal approvals from the Congress as well as from the Ministry of Energy and Oil and we have respected them fully."
While RamÌrez focused on Sincor, he accused all four strategic associations upgrading heavy crude of having "legal problems."
Yet Exxon Mobil, which participates in the Cerro Negro upgrading project, also denied that it had violated its contract, Reuters reported.
"Not true," said ExxonMobil CEO Lee Raymond in a short statement on Wednesday.
Former PDVSA director Jose Toro Hardy told The Daily Journal on Thursday that RamÌrez' accusations were "confusing."
"PDVSA and the government had in its hands and in the contracts the established means of control to know if those things were occurring or not," said Toro Hardy, referring to supposed violations committed by strategic associations. He added that it was "curious" that RamÌrez would accuse Sincor after President Hugo Chavez announced from Paris earlier this year that Sincor would expand its operations in Venezuela.
The oil expert also wondered if RamÌrez' allegations against strategic associations operating in the Faja were related to a decrease in Faja production.
The International Energy Agency (IAE) indicated a decrease of 98,000 bpd-from 580,000 bpd to 488,000 bpd-in Faja production between March and April of this year, Toro Hardy pointed out.
The former PDVSA director also said he believed the minister's accusations served as a smoke screen for allegations of irregularities and falling production at the state oil company.
RamÌrez, who doubles as the president of PDVSA, said on Wednesday that the company's former management was "anti-national," accusing it of conspiring with international interests to "assault" the Venezuelan state.
With PDVSA in the public eye for the past month, Toro Hardy believed that such accusations were an attempt by the government to "distract attention or look to blame someone else."
He attributed falling PDVSA production-indicated by a recent OPEC report-to the Chavez government's firing of over 20,000 workers after the national strikes in 2003.
Investigations to come
By Daily Journal Staff
The National Assembly's (AN) special commission to investigate oil operating agreements will call former managers of the state oil company Petroleos de Venezuela (PDVSA) and ex-energy and mines ministers to examine those agreements in front of the commission in the weeks to come.
Rodrigo Cabezas, president of the commission, said Thursday the schedule of these appearances had been modified, reported Union Radio.
Jose Vielma Mora, National Tax and Tributary Administration (Seniat) chief, is set to appear next Tuesday at 3 p.m. to revise the tax system for the operating agreements signed with foreign firms during the oil "apertura" or "opening" of the 1990s.
Next Wednesday at 9 a.m., former PDVSA presidents Luis Giusti and AndrÈs Sosa Pietri and former ministers Edwin Arrieta and Humberto CalderÛn Berti are scheduled to appear in front of the commission.
Former PDVSA president AlÌ RodrÌguez Araque and current deputy of Energy Bernard Moumer, among others, will appear the following week.
JENS ERIK GOULD
Jens Erik Gould is a political, business and entertainment writer and editor who has reported from a dozen countries for media outlets including The New York Times, National Public Radio and Bloomberg News.