CARACAS -- President Hugo Chavez forced Exxon Mobil and ConocoPhillips, two of the largest U.S. companies, out of Venezuela's oil fields Tuesday in a nationalization drive the United States said could hurt its oil supply.
Exxon Mobil Corp. and ConocoPhillips decided to quit their oil operations in the OPEC nation after they failed to strike a deal with the government to stay in multibillion-dollar projects that the anti-U.S. leader decreed should be taken over.
Four other oil majors — Chevron Corp., Norway's Statoil, Britain's BP Plc and France's Total — signed pacts that allow Venezuela to increase its stake to at least 60 percent in projects worth $30 billion.
"We characterize this ceremony as an act of sovereignty for our country, for our people," Energy Minister Rafael Ramirez said after the companies signed the deals.
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Exxon and ConocoPhillips can now negotiate compensation or take Venezuela to court for the loss of assets that are part of four heavy-crude upgrading facilities capable of producing around 600,000 barrels per day from the vast Orinoco oil belt.
Chavez, who vows to diversify Venezuela's oil customers to reduce traditional reliance on U.S. oil markets, prides himself on confronting American "imperialism" even though the United States is the country's biggest oil importer.
Washington fretted over Tuesday's move by its No. 4 foreign petroleum supplier.
"I'm concerned," U.S. Energy Secretary Sam Bodman told reporters. When asked if he was worried U.S. oil and product imports from Venezuela could be reduced with the companies leaving, he said: "Sure, of course."
Oil majors are well-known for withstanding harsh investment climates.
The exit of Exxon and ConocoPhillips highlights how difficult it can be for foreign companies to do business in a nation led by a man who calls capitalism an evil and has nationalized large swaths of the economy.
With foreign investment falling off because companies fear they could lose their assets, Chavez depends increasingly on high oil revenue to maintain social programs for his majority poor supporters.
But Ramirez said nationalizations helped the government control Venezuela's future.
"For us, there is no cost to nationalizations. For us, there is a big benefit — the benefit to our national sovereignty," he said. "We can now exercise control and management over these resources."
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