Venezuela settles with oil firms

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The Venezuelan government has paid $1.8bn (Â£900m) in compensation to French, Norwegian and Italian oil firms after it nationalised key oil fields.

The move isolates US oil firm Exxon Mobil in its dispute with the country.

Exxon is seeking $12bn in compensation from Venezuela's state energy group, PDVSA, after its interests were nationalised last year.

Venezuela has accused the US oil giant of exaggerating the value of the firm's former investments in the country.

It said that Exxon's former interests were worth just $1.2bn.

France's Total, Norway's Statoil and Italy's ENI agreed to the settlement after accepting the book price for the assets that PDVSA took over.

Total accepted $834m, ENI accepted $700m and Statoil received $266m, France's AFP news agency reported.

In 2006, Venezuela enacted a law forcing foreign oil companies to give PDVSA at least a 60% share in their Venezuelan operations.

Court orders

Exxon has won court orders freezing $12bn of PDVSA assets, pending the verdict of an international tribunal at a court linked to the World Bank.

The move prompted PDVSA to stop selling oil to Exxon.

Venezuela's President Hugo Chavez has also entered the fray, accusing the US government of being behind Exxon's legal move.

Mr Chavez has also threatened to cut all Venezuelan oil exports to the US, but analysts say such a move is unlikely.

The US government said it fully supported Exxon's legal move, calling it a "just and fair" compensation claim.

The dispute between Venezuela and Exxon has been one factor behind record oil prices.