In September 2006, ExxonMobil made a decision to walk away from its operations in Venezuela after the State assumed control of Venezuela's oil fields and mandated a renegotiation of the terms for all foreign oil firms operating in the country. While other exploration and production companies decided to remain in Venezuela, events such as this, along with the increasing bellicosity of Hugo Chavez, have prompted mainstream media outlets such as CNN and the New York Times to claim that a wave of socialism is sweeping across South America. Election results in Ecuador, Bolivia and Argentina have prompted Hugo Chavez to agree, pronouncing that a Bolivarian revolution is overtaking Latin America.
Venezuela's decision to assume ownership of oil-producing projects in the Orinoco River Basin, which holds the world's largest reserves of heavy crude, and its mandate that companies with ownership in the area form joint ventures with Venezuela's state-owned oil company led to a variety of responses. Of the six companies with operations in the region, all but ConocoPhillips and ExxonMobil agreed to the new contracts. As this paper will outline, this has led to poor results for both Venezuela and ExxonMobil.