The government of President Hugo Chavez has formally taken over Venezuela's last privately run oil fields. Oil minister Rafael Ramirez declared that the Orinoco River fields have reverted to state control. The companies ceding control included BP, Houston-based ConocoPhillips, Irving-based ExxonMobil, Chevron, France's Total and Norway's Statoil. All but ConocoPhillips signed agreements last week agreeing in principle to state control. Venezuela has warned it may expropriate that company's assets if it doesn't follow suit. ConocoPhillips says it's cooperating by ceding control of its two Orinoco oil projects, even though it hasn't reached agreement with Venezuela on compensation. All the oil companies remain locked in a behind-the-scenes struggle with the Chavez government over financial terms and conditions to remain as minority partners.
BP Chief Executive John Browne has resigned, hours after a judge cleared the way for a London newspaper to publish details of his private life. Allegations also were raised that Browne misused company resources--which the company and the businessman deny. Browne had planned to resign at the end of July, but the company will now be led by Tony Hayward. Hayward is head of BP's exploration and production. A series of high-profile BP accidents have drawn attention--including a deadly March 2005 blast at the company's Texas City refinery. The fiery blast killed 15 people and left about 170 hurt. Browne had been fighting since January to keep the Mail on Sunday newspaper from publishing details from an interview with a man with whom he had a relationship. Browne acknowledged in the statement that he had lied to a judge about how he met Jeff Chevalier.
A new report indicates activity has been ramping up for the nation's manufacturing sector, marking the third-straight month of expansion. The Institute for Supply Management says its April index surged to 54.7, rising nearly four points from the previous month. Any reading above 50 indicates growth. An inflation component, the prices-paid index, rose sharply. At the same time, measures of new orders, production and employment also improved significantly.
A further indication that the housing market softness will be with us for a while. The National Association of Realtors says its Pending Home Sales Index--based on contracts signed in March--fell 10.5 percent from the same month last year. It was also down almost five percent from February. The index, a forward-looking indicator, shows sales closed in April are likely to remain soft, with some drag possible in May as well. NAR chief economist David Lereah says the effects of a decline in subprime lending and tighter lending standards are beginning to take hold. He expects home sales will be "relatively sluggish in the second quarter,'' but says things should start picking during the second half of the year.