Petro-Canada Joins Oil Companies Abandoning Venezuela

Petro-Canada has decided to pull out of Venezuela and has reached an agreement with the state oil company on compensation for its oil investments, the Venezuelan government said.

Petro Canada
Petro Canada

Petro-Canada had partnered with Exxon Mobil, which is also withdrawing from Venezuela, in developing the La Ceiba block near western Lake Maracaibo. The block has not yet begun producing oil.

President Hugo Chavez's government has required all private companies to accept minority stakes in oil production projects and join state-controlled joint ventures.

Oil Minister Rafael Ramirez told a news conference Tuesday that state oil company Petroleos de Venezuela SA, or PDVSA, was unable to reach an agreement with Petro-Canada.

"Petro-Canada has decided on the culmination of its participation in its businesses in the country and compensation has been agreed upon between the companies that has already been accepted by both parties," Ramirez said. That compensation was not disclosed.

Petro-Canada and Exxon Mobil each had a 50% stake in La Ceiba but those shareholdings have passed entirely to PDVSA, Ramirez said.