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Total issues Orinoco warning



By Upstream staff 

French oil giant Total fears Venezuela's drive to take over complex heavy oil projects run by foreign oil companies in the Orinoco belt could lead to operational problems, chairman Thierry Desmarest said today.

"We are willing to talk, in particular on tax issues, but what bothers us today is the Venezuelan state's desire of majority control over operations such as Sincor, with all the operational constraints that this imposes," Desmarest told reporters, Reuters reported.

Desmarest, who stepped down as chief executive earlier this month, said talks were continuing.

"We continue to negotiate with the authorities to find a solution that would allow us to keep a satisfactory profitability... We need to wait a little more to know if we can find an acceptable solution," Desmarest said.

Venezuelan President Hugo Chavez today extended by several months a deadline, originally set for 1 May, to take a stake of at least 60% in four projects, including Sincor, which convert the heavy, tarry crude of eastern Venezuela's Orinoco Belt into synthetic oil.

Desmarest said the 60% figure was not yet set. "Sixty percent or 51%, there are several figures doing the rounds," he said.

The International Energy Agency said last month that nationalisation plan could impede investment in the Opec member nation and hinder its ability to boost production.

Chavez said he hoped foreign companies would stay as minority partners. The four Orinoco projects have a production capacity of around 600,000 barrels per day.

Asked whether Total would be happy to stay in the Sincor project with a minority stake, Desmarest excluded nothing: "We would need to know what our percentage of interest would be and all the other conditions too."

Other companies whose investments are targeted for takeover in the vast Orinoco reserve include supermajors Chevron, ExxonMobil, ConocoPhillips, BP and Norway's Statoil.

On other issues, Desmarest said Total intended to fight calls in France for a windfall tax on its record profits, but added Total was determined to remain a French-based company.


Tuesday, 27 February, 2007, 16:32 GMT  | last updated: Tuesday, 27 February, 2007, 16:32 GMT

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