Venezuela to pay $1 bln in Sincor takeover- source

By Brian Ellsworth

CARACAS, Jan 31 (Reuters) - Venezuela will pay $1.1 billion in compensation to France's Total (TOTF.PA) and Norway's Statoil (STL.OL) for the takeover of the Sincor oil project, an industry source familiar with the agreement told Reuters on Thursday.

Venezuelan President Hugo Chavez last year took over four multibillion-dollar heavy crude upgrading projects as part of a drive to create a socialist state, pushing Exxon Mobil Corp (XOM.N) and ConocoPhillips (COP.N) out of the OPEC nation in the process.

Total and Statoil stayed on as minority partners in the 200,000 barrel per day project, which Venezuela renamed Petro Cedeno, with state oil company PDVSA taking a majority stake.

The compensation deal leaves Total with $735.3 million and Statoil with $234.7 million, after charging the two partners a "bonus" of $130 million to join Petro Cedeno, the source said.

He added that Total will be paid in oil cargoes while Statoil will receive payments in cash.

"The companies will be compensated, not immediately of course, there is an arrangement for the compensation to made in installments," said the source, who has seen the agreement.

In June the two companies agreed to lower their stakes in the project, with Total dropping to 30 percent from 47 percent and Statoil reducing its holdings to 10 percent from 15 percent.

The compensation figure of $1.1 billion for their combined stake reduction of 22 percent means PDVSA valued Sincor at $5 billion.

PDVSA insisted it would not pay market value but rather compensate the companies for the total investments they made in the projects, which PDVSA said was $4.6 billion for Sincor.

DEBT TALKS

Analysts say market value for the project could be as much as twice that figure, taking into account that oil prices are now close to $100 per barrel compared to prices below $20 when the project were created.

Exxon Mobil and ConocoPhillips have announced they are taking Venezuela to international arbitration for taking over their projects, while at the same time seeking a negotiated solution.

BP (BP.N) and Chevron (CVX.N) stayed on as minority partners in their projects but PDVSA did not need to compensate them because their holdings in the projects did not change.

The source said PDVSA has been locked in complicated talks with creditors over Sincor's project financing -- a syndicated bank loan of $1.2 billion, according to Deutsche Bank -- that still has not been paid down.

PDVSA's takeover of the project has led the financiers to seek new terms that will ensure the project continues to pay its debt.