ConocoPhillips will not sign an agreement with Venezuelan President Hugo Chávez for minority stakes in state-run joint ventures to keep pumping heavy crude oil, a company official familiar with the negotiations said yesterday.

Later Venezuela's state oil company Petroleos de Venezuela SA, also known as PDVSA, said Exxon Mobil Corp had also refused to sign.

Tuesday was the deadline to either agree to Chávez's terms or give up on Venezuelan oil.

"We will not sign a memo-randum of understanding," said the company official, who insisted that he not be named because ConocoPhillips was not ready to make an official announcement.

Third-largest US oil company

ConocoPhillips is the third-largest U.S. oil company. Its Venezuelan projects account for about four per cent of the company's daily global oil and gas production. It is the only major oil company in Venezuela that has not agreed in principle to state control.

Venezuelan Oil Minister Rafael Ramirez has said ConocoPhillips would be expelled from the country if it continues to resist.

As part of Chavez's nationalisation drive, the government is taking a minimum stake of 60 per cent of projects in the lucrative Orinoco River basin but has invited the companies to remain as minority partners. It gave them until yesterday to negotiate the terms, including compensation and the sizes of the stakes.

PDVSA said in a statement it was planning to sign with only four of the six major oil companies - U.S.-based Chevron Corp; Britain's BP PLC, France's Total SA and Norway's Statoil ASA.

Chavez's government already took over operational control of the country's last privately run oil fields, in the Orinoco, on May 1.

ConocoPhillips has said its initial investment in Venezuela was US$2.6 billion, though analysts say it's worth far more than that.

- AP