June 26 (Bloomberg) -- ConocoPhillips and Exxon Mobil Corp. will quit oil projects in Venezuela after the failure of talks with President Hugo Chavez's government, the country's energy minister said.

The minister, Rafael Ramirez, confirmed the departure of the companies in signing ceremonies for agreements with four companies that will continue heavy-oil operations in the country. They are Chevron Corp., Statoil ASA, Total SA and BP Plc. The departure of ConocoPhillips and Exxon Mobil was disclosed late yesterday by a person on the government side of negotiations.

Petroleos de Venezuela SA will have stakes of 60 percent to 83 percent in ventures with the four remaining foreign oil producers, according to a statement earlier today from the state- run oil company. Talks on terms for ceding the interests of ConocoPhillips and Exxon Mobil will continue, Ramirez said.

Chevron worked out ``acceptable'' terms with the government, said Ali Moshiri, head of the company's Latin American exploration and production unit, without providing details.

ConocoPhillips and Exxon Mobil failed to reach an agreement on remaining in the country after Petroleos de Venezuela unilaterally took over at least 60 percent stakes in heavy-oil projects, where the state oil company previously held minority stakes. Chavez is pushing for control of the country's key industrial assets.

Second-Quarter Charge

Houston-based ConocoPhillips, while ``hopeful'' of reaching an agreement with the government, will take a $4.5 billion charge in the second quarter to write off its interests, the company said. It also preserves an option for international arbitration.

Exxon Mobil also continues talks with Venezuela.

``Exxon Mobil is disappointed that we have been unable to reach an agreement,'' spokeswoman Susan Reeves said in an e- mailed statement. ``However, we continue discussions with the Venezuelan government on a way forward.''

Shares of ConocoPhillips fell $2.24, or 2.9 percent, to $75.80 at 4:17 p.m. in New York Stock Exchange composite trading. Shares of Exxon Mobil, based in Irving, Texas, fell 55 cents to $81.82.

ConocoPhillips abandoned the talks before today's deadline set by lawmakers for a decision on the fate of the projects, which can produce about 580,000 barrels a day, a quarter of Venezuela's output, according to the person on the government side of negotiations, who asked not to be identified.

With ConocoPhillips leaving, Chevron, the 30 percent owner of the Hamaca heavy oil project, will keep its full stake, Ramirez said. Petroleos de Venezuela will take ConocoPhillips's stake, giving it a 70 percent interest.

Faja

The projects, the country's largest foreign investment, extract heavy crude from the Faja, a 55,300 square-kilometer (21,400 square mile) patch of tarry oil that rivals Canada's oil sands in size. The projects, which represent a growing share of production for the world's sixth-largest oil exporter, pump oil and upgrade it so it can be more easily shipped and refined.

Chavez and Petroleos de Venezuela took operational control from the companies that built the plants, including ConocoPhillips and Exxon, on May 1 as part of his quest to create what he calls ``21st century socialism.'' The country also started to take over majority stakes in the projects.

U.S. Energy Secretary Samuel Bodman said he is ``concerned'' about the departure of the two companies from Venezuela.

``It's not just Venezuela,'' Bodman said. ``We have problems with Nigeria. We have problems with Russia with development of resources.''

Oil- and gas-producing nations should adopt ``laws that will encourage non-indigenous companies to join in the development of those reserves,'' he said.

ConocoPhillips Investment

ConocoPhillips's four projects included Petrozuata, where the company owned 50.1 percent, and Hamaca, where it held 40 percent. ConocoPhillips also had a 32.2 percent stake in the Corocoro offshore oil project. It will retain a 40 percent stake in the Plataforma Deltana offshore gas project, company spokesman Bill Tanner said in an e-mail.

The company invested $2.5 billion in Venezuelan operations. They account for reserves equivalent to 1.09 billion barrels of oil, or about 10 percent of the company's total.

Exxon's holdings in the country are a 41.7 percent interest in the Cerro Negro heavy oil project and a 50 percent stake of the La Ceiba block, according to the company Web site. The company sold its Venezuelan gas stations last week.

$25 Billion

Together, the four crude oil projects in the Faja are worth at least $25 billion, according to analyst Matthew Shaw at Wood Mackenzie Consultants Ltd. in Edinburgh, Scotland, who based his analysis on a long-term crude oil price of $40 a barrel. Crude has been between $50 and $75 a barrel for most of the past two years.

``ConocoPhillips is the most exposed,'' Paul Sankey, an analyst at Deutsche Bank, wrote today in a note to clients. The company's projects are worth $6.4 billion assuming an average long-term oil price of $50 a barrel, he wrote.

Chavez stepped up nationalization efforts this year after winning re-election Dec. 3 with 63 percent of the vote. He bought out AES Corp. of Arlington, Virginia, and New York-based Verizon Communications Inc. to take control of the power and phone companies, declaring that such moves helped restore the nation's sovereignty and move it on its ``march to socialism.''

Fired Workers

The firing of more than 18,000 workers after a strike in 2002 left the state oil company with fewer skilled workers to operate existing wells and refineries. The strike, aimed at forcing Chavez out of office, all but shut Venezuelan crude oil production in December 2002 and January 2003.

Venezuelan oil output has not yet reached its pre-strike peak of about 3 million barrels a day. Output averaged 2.34 million barrels a day in May, according to data compiled by Bloomberg.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.

Last Updated: June 26, 2007 18:45 EDT