Monday, March 3, 2008

ExxonMobil at the center of international oil price rise; Venezuela, OPEC, the Valdez suit all matter


ExxonMobil is at the center of some controversies as OPEC prepares to meet Wednesday March 4 in Vienna. Shokri Ghanem, head of Libyan oil policy and Chief Executive of Libya's National Oil Co said that OPEC will discuss the dispute between ExxonMobil and Venezuela. When socialist president Hugo Chavez nationalized the industry in the Orinoco Basin, ExxonMobil left the country and won a legal arbitration judgment to recover $12 billion in "expropriated" assets. Chavez had threatened to embargo oil to the United States in such circumstances, a threat that may be helping prop up the price of crude oil, right now about $103. Other factors include the falling dollar, political instability and violence in Nigeria, and long-term security concerns about the oil fields in Saudi Arabia and Al Qaeda, as well as the loss of output from Iraq due to "civil war" (for all intents and purposes).

The AP story is here.

The US Supreme Court heard arguments Feb. 27, 2008 about punitive damages against ExxonMobil for the 1989 Valdez accident. Actual damages have long since been paid. The Exxon website story is here. Exxon has an analyst meeting March 5 that will be covered on the web, link here. Exxon stocks rose Monday March 3, 2008 to a fairly normal price (87.75) despite the "uncertainties" because of recent record profits.

The other big story today affecting international oil markets is something like "Ahmadinejad: US power crippling in Iraq", by Anna Johnson, link here. Two decades after the Iran-Iraq war, Iran is trying to take advantage of the Shiite position in Iraq.

Update: March 6, 2008

The latest AP story on the dispute between Colombia with oil-producing Venezuela and with Ecuador is by Jorge Rueda, "Venezuela seeks condemnation of Colombia," here.

OPEC refused to raise production March 5, and oil rose to over $105 a barrel, as US inventories are less than thought. The story by William J. Kole is "No Production Boost for OPEC," here.

Update: March 6, 2008

ExxonMobil issued a statement " ExxonMobil to Invest at Record Levels to Meet Growing Energy Demand," link here. This is to include investments in more politically stable countries, which is said to be realistic because of higher crude oil prices. But Exxon today closed at 84.61, a significant drop.

There is further information about an asset swap between Exxon and Venezuela: Patricia Rondon, Reuters, "UPDATE 1-Venezuela will talk to Exxon about asset swap," link here.

March 6 2008

The latest, from AP writer Andrew O. Selsky, is "Venezuela's President Calls for Cooling of Tensions With Colombia As Leaders Gather at Summit," link here.

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