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Exxon Mobil hands over Venezuelan project

Exxon Mobil plans to hand operations of a multibillion-dollar oil project to the Venezuelan state before a May 1 deadline imposed by President Hugo Chavez, industry sources said Thursday.

Chavez this week signed a decree for the government to take a majority stake in four heavy crude upgrading projects in the Orinoco basin by May 1 as part of a nationalization drive toward Cuba-inspired socialism.

The move shows Exxon (Charts), the world's largest company, complying with Chavez's order to cede control of the Cerro Negro project despite doubts over whether private companies will in fact meet Chavez's ambitious deadline. Energy authorities in 2006 extended an initial deadline to take control of oilfields operated by private and foreign oil companies, which operated the fields for three months as negotiations continued.

Exxon Mobil has always been expected to take the toughest line with Venezuela, according to industry analysts, who have cast doubts over whether PDVSA, Venezuela's state-owned petroleum company, has the technical capacity to run the complex operations valued at an estimated $30 billion.

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