Saturday, March 1, 2008

ENI in Venezuela

I came across an article on the New York Times which covers ENI's (the Italian oil company) recent agreement with Venezuela to develop a heavy oil field in the Orinoco basin.

This is not a renegotiation of ENI's existing contract but a completely new investment to the tune of $4 billion. I was a bit surprised to hear this. I can understand companies wanting to protect investments already made in the country but given Chavez's erratic behavior this seems like a pretty risky move on the part of ENI. Guess if you're desperate for oil you'll do pretty much anything.

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