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Chalmette could be part of Venezuela deal

March 24, 2008

Chief Executive Rex Tillerson said on Wednesday that Venezuela could offer up its share of their jointly run Chalmette refinery in Louisiana as part of a settlement of a dispute over an oil project the country nationalized last year. “We think the right thing for us to do is to sit down and work out a mutually agreeable settlement for the assets that have been exproporiated,” Tillerson said in a wide ranging briefing with reporters after the company’s annual meeting with analysts in New York.

“Absent any conversation around that, we’re left with no choice but to pursue the international legal remedies that are available to us under Venezuelan foreign investment law and were available to us under our contract with (state oil firm) PDVSA,” he said.

In the dispute over the assets, Exxon has won court orders freezing up to $12 billion of Venezuelan assets, heating up the quarrel.

PDVSA and Exxon both own half of the Chalmette refinery in Louisiana, which can process about 193,000 barrels of crude oil daily.

Tillerson also commented on the recent surge in oil prices, which hit a record of more than $104 a barrel on Wednesday after OPEC decide to maintain current output levels.

“It’s pretty crazy, isn’t it? … There’s been a disconnection in the price (of oil) from the fundamentals,” he said. The disconnect has been driven by the weak dollar, geopolitical uncertainty and market speculation, he said.

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