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Honduras set to take control of oil depots

Exxon, Chevron affected by move

Manuel Zelaya said the temporary move will lower fuel costs. Manuel Zelaya said the temporary move will lower fuel costs.

TEGUCIGALPA, Honduras -- The government will take temporary control of foreign-owned oil storage terminals as part of an import program meant to drive down fuel prices, President Manuel Zelaya said late Saturday.

Zelaya ordered the move after failing to reach a deal with Exxon Mobil, and Chevron, as well as DIPPSA, a local company, to rent the terminals.

"It is not a nationalization, it's a temporary use of the storage tanks through a lease and payment of a reasonable price," he said.

Honduras produces no crude of its own and no longer has a refinery. Its fuel market, like that of most countries in Central America, is dominated by Shell, Exxon Mobil, and Chevron.

The government program takes control of imports away from the small group of oil companies that operate service stations in the Central American nation.

Those companies have opposed the new system, saying it is anti competitive.

A congressional commission studying the new system has said it could save Honduras, one of the poorest countries in the Western Hemisphere, about $66 million a year.

Zelaya, a logging magnate, said the decree would allow the government to go ahead with a deal reached in November with Conoco Phillips to import at least 8.4 million barrels of gasoline and diesel a year.

Exxon Mobil and Chevron could not immediately be reached for comment.

Mario del Cid, a spokesman for an oil companies group in Honduras, warned yesterday that the imposition would hurt the country's reputation among investors.

"Investment is based on clear rules, and decisions of this kind are not a good message," he said.

Oil companies in Honduras imported some $900 million worth of fuel in 2005.

Foreign oil companies' operations in Honduras are much smaller than in Venezuela, where, on Saturday, President Hugo Chávez said the country's entire energy sector had to be nationalized, reinforcing his socialist revolution.

He said Venezuela was "almost ready" to take over the foreign-run oil projects of the Orinoco Belt run by heavyweights such as Chevron, Conoco Phillips, and Exxon Mobil, that produce about 600,000 barrels per day.