Newly bought Russian-made fighter jets streaked through the sky as Chavez shouted “Down with the U.S. empire!” to thousands of red-clad oil workers, calling the state takeover a historic victory for Venezuela after years of U.S.-backed corporate exploitation.
“The nationalization of
Chavez accused foreign oil companies of bad drilling practices due to their hunger for quick profits, and said
Oil Minister Rafael Ramirez declared that the fields had reverted to state control just after midnight. State television showed cheering workers in hard hats raising the flags of
While the state takeover had been planned for some time, BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France’s Total SA and Norway’s Statoil ASA remain locked in a struggle with the Chavez government over the terms and conditions under which they will be allowed to stay on as minority partners.
All but ConocoPhillips signed agreements last week agreeing in principle to state control, and ConocoPhillips said Tuesday that it too was cooperating.
Analysts say the companies have leverage because
“They’re hoping ... that as time passes Chavez will realize he needs them more than they need him,” said Michael Lynch, an analyst at Winchester, Mass.-based Strategic Energy and Economic Research. He predicted most oil companies — with the possible exception of Exxon Mobil — would stay.
Multinationals pumping oil elsewhere in
Chavez says the state is taking a minimum 60 percent stake in the
The stakes are high for both sides. The
If
Chavez “is going to discover that nationalism is one thing, but money talks,” Lynch said. “And I don’t think he’s going to be able to get more money out of the
Pulling out would be damaging for the companies. They have invested more than $17 billion in the projects, now estimated to be worth $30 billion.
“The president has ordered us to assume full control of our oil sovereignty, and we are doing it,” Ramirez said at the Jose heavy crude refinery near the eastern city of
An enormous Venezuelan flag was hung between two cranes at the refinery, and smaller flags flew from lamp posts. Red balloons were attached to power lines.
The oil companies, meanwhile, still needed convincing that
Chevron’s future in
Nationalization of the oil industry has been tried in
Chavez is also nationalizing electricity companies and the country’s biggest telecommunications company, and has threatened to take over private hospitals if they continue raising prices for care. He says radical changes are needed to help the poor benefit more from the country’s oil wealth.
The campaign has brought popularity for Chavez, who takes to the airwaves almost daily, delivering tirades against the rich, the news media, capitalism in general and his archenemy, the
PIN/AP
Your Comment