Photo:bear69designs, Creative Commons, Flickr

Historically, Venezuela has a love/hate, mutual abuse relationship with foreign companies.  Venezuela seems to nationalize its foreign partners every 30 years or so and, as the last time it happened was in the seventies, it would seem that we are due.

Now, I don't know all the details behind the negotiations that made Chevron (CVX $83.03), BP (BP – $70.35) and Statoil (STO – $29.29) stay and Exxon (XOM $82.25) and Conoco (COP $76.67) walk away, but I'm going to hold my Conoco, BP, Statoil and Chevron and I'm still not going to buy Exxon. 

As for this forced negotiation/nationalization changing oil prices, I don't think it will.  The oil will still come out of the ground, and unless Chavez completely loses his mind and starts to really squeeze his foreign oil partners to the point where they all back out, I don't see production really falling. 

Miranda Marquit states that Conoco has the most to lose in Venezuela.  Conoco Philips states on their website that they expect to write off $5.4 billion from it's 50.1 percent interest in Petrozuata, a 40 percent interest in Hamaca, and a 32.5 percent interest in Corocoro.  With 1.68 billion shares outstanding, that works out to $3.21 a share (6.1% of book value or 4.2% of share price).  As of this posting, I could not get information on the hit to earnings that Chavez's actions caused from the Exxon-Mobil website. It would seem they have not yet posted a news release.  I suppose that's part of the reason I like ConocoPhilips better than Exxon.  The cheaper valuation of Conoco (P/E ratio, book value, dividend yield) also helps a lot.  And since my main goal is investment returns, I look for companies that are trying to solve the worlds future problems for growth.  And since I don't see many of the oil companies doing much in terms of researching future energy types, I still use strict valuation measure to make my decisions.

Among companies that are remaining in Venezuela, BP (BP – $70.35), Total (TOT – $73.23), Statoil (STO – $29.29) and Chevron (CVX – $83.03), I own BP, STO and CVX. The one I'd be most likely to sell next would be BP.  They have the highest valuation numbers and a huge exposure to Russia (another place that is renegotiating its contracts with oil companies.)  I really like the Norwegian Oil Company Statoil.  They are actually trying to be carbon neutral, injecting carbon into the earth's surface and generally seem like nice people.  I also wish I was Norwegian.  What a nice country with great government benefits and a kick ass economy.

Disclosure:  I do not own XOM or TOT.  I own BP, CVX, COP and STO.  I shorted XOM Friday heading into the Russell re-balance, then bought it back and went long of Friday's close.  I sold XOM Monday and now have no position.  I also traded Chevron in a similar way on Friday.