Americas News

Chavez signs decree to nationalize foreign oil companies

Feb 27, 2007, 5:27 GMT

Caracas - Venezuela's President Hugo Chavez signed a decree Monday night to nationalize the oil industry in the world's fifth-largest crude oil exporter.

   The decree allows Venezuela's state oil company Petroleos de Venezuela SA, (PDVSA) to take a 60 per cent stake on May 1 in four projects which process crude oil into 600,000 barrels of synthetic oil a day in the country's eastern Orinoco River basin.

   The companies affected by the decree are Exxon Mobil, Chevron, ConocoPhillips from the US, Total SA from France, British Petroleum and Norway's Statoil ASA.

   The joint ventures will be run by 'transition committees' until May, when Venezuelan teams will take over, Chavez said, adding that the foreign firms invested in the projects could remain minority partners.

   The privatization of the oil sector to overseas companies in the 1990s was 'disgraceful,' said left-wing populist Chavez at the signing ceremony in Caracas.

   'The privatization of oil is over,' Chavez said. 'This is the last space that was left for us to recuperate. Petroleum now belongs to all Venezuelans.'

   Earlier this month Chavez assured the 4,000 workers of the foreign companies that they would become PDVSA employees.

   Chavez was given special powers by congress in January to issue laws by decree for 18 months to enact sweeping changes to government institutions, local elections, finance and taxes, banking, national defence, and the energy field as he attempts to establish a socialist system.

   He has already nationalized the country's biggest foreign-run telecommunications and electricity companies.