Michael S. Goldberg, head of the international dispute resolution group at Baker Botts, a law firm here that represents major oil companies internationally, said he did not think Tuesday’s actions were “necessarily the end of the story.” He added, “The prospects of a deal are never over until a sale is made or an arbitrator reaches a decision.”
The investments at stake are large by any measure, with values ranging from $2.5 billion to $4.5 billion for Conoco if Venezuela takes ownership of its heavy oil projects. Exxon stands to lose about $800 million. More than $6 billion may be lost by other private companies, depending on how they are compensated.
“Although the company is hopeful that the negotiations will be successful, it has preserved all legal rights, including international arbitration,” Conoco said. Exxon also expressed hope that an agreement could be reached that would permit it to continue operating in an ownership role.
“Exxon Mobil is disappointed that we have been unable to reach an agreement on the terms for migration to a mixed enterprise structure,” the company said. “However, we continue discussions with the Venezuelan government on a way forward.”
Should the American companies leave, some of the other multinational companies that remain could eventually take their place. The Venezuelan government has been talking to government-controlled companies from China and other countries about creating new ventures to extract and refine Venezuelan oil.
“Venezuela is now free to find other partners,” said Mazhar al-Shereidah, a petroleum economist in Caracas. “I don’t think Petróleos de Venezuela can cover all the technical and financial demands of these ventures, but this doesn’t constitute a dramatic situation.”
Conoco’s shares fell 2.9 percent on Tuesday to $75.80 as investors reacted to the announcements from Caracas. Exxon, which relies less on Venezuela as a portion of its overall output, fell 0.7 percent to $81.82.
