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Last Updated: Wednesday, 27 June 2007, 14:53 GMT 15:53 UK
Venezuela oil loss put at $4.5bn
Venezuelan President Hugo Chavez
The Chavez government is taking majority control of operations
US oil giant ConocoPhillips has said that a decision not to accept a minority stake in its operations in Venezuela may cost it $4.5bn.

The firm rejected a deal that would keep them working in Venezuela's most important oil field.

Hugo Chavez's government is taking over majority control of operations in the Orinoco Belt, as it extends state control of the oil industry.

Norway's Statoil agreed to reduce its 15% stake in a project to 10%.

BP, Chevron and Total have also signed deals to take minority stakes.


President Chavez had demanded that private companies hand over majority control to the state as part of a nationalisation drive - with Tuesday as a deadline for foreign firms to agree.

Earlier, Exxon Mobil said it was "disappointed" that it was unable to reach an agreement on the terms of a joint ownership structure, but added that it was in discussions with the Venezuelan government on a way forward.

In May, the state-run PDVSA took over control of exploration projects in the Orinoco Belt, which had been among the last privately-run fields in the country.

It is the country's most important oil area, with massive potential.

There are proven reserves of at least 80 billion barrels, but there could be enough there to make Venezuela the world's biggest source of oil.

Separately, the US Energy Information Administration said that crude inventories had risen last week - to a fresh nine-year high.

Analysts do not expect events in Venezuela to impact on supplies or petrol pump prices, saying production was likely to move to other companies.

Orinoco belt
Oil projects and companies in affected fields
1. Sincor (PDVSA*, Total, Statoil); Petrozuata (PDVSA, Conoco Phillips)
2. Ameriven (PDVSA, Conoco Phillips, Chevron Texaco)
3. Cerro Negro (PDVSA, Exxon Mobil, BP)
*PDVSA is Venezuela's state-owned oil company

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