Enbridge sees no return to Venezuelan oil terminal

Reuters, 05.07.03, 7:40 PM ET  

CALGARY, Alberta, May 7 (Reuters) - Enbridge Inc. <ENB.TO> does not expect to resume operating a Venezuelan oil terminal after the state oil firm enlisted troops and replacement workers to run the facility when it was shut down during the protected strike, its chief executive said on Wednesday.

Enbridge, Canada's No. 2 pipeline firm, has a 45-percent stake in the operating company for the major eastern terminal at Jose, but Venezuelan President Hugo Chavez late last year accused it of abandoning and sabotaging the facility, which the company has denied.

At the time, strikers opposed to Chavez crippled the oil industry in the OPEC member nation, cutting exports.

"We moved out of that operatorship when the general strike occurred in December in Venezuela. We have not been able to get back in to operate," Enbridge Chief Executive Officer Pat Daniel told reporters before his firm's annual meeting. The contract with Petroleos de Venezuela allows for compensation if Enbridge does not return, Daniel said.

"We're expecting that they will not let us come back in and that we'll have to negotiate the financial settlement," he said.

The Jose operating entity also includes Oklahoma-based Williams Cos. Inc. (nyse: WMB - news - people).

PDVSA and Venezuela's energy ministry are now in control of the site in what Daniel described as a nationalization driven by new management at the state oil firm.

Enbridge operated the facility safely over three years, and it generated C$3 million ($2.1 million) in net income annually for the company, he said.

"I think that they had to have some rationale for having us not go back in, and we were excluded from operating the facility so it was impossible for us to have sabotaged it because we weren't even there," he said.