CARACAS, Venezuela (AFX) - The Venezuelan government will take majority
control of oil projects in the Orinoco River basin by May 1 and any foreign oil
company that resists can leave, President Hugo Chavez said Thursday as he
elaborated on his sweeping nationalization plans.
Chavez told a news conference that his government is "not posing any
conflict" to oil companies British Petroleum PLC, Exxon Mobil Corp., Chevron
Corp., ConocoPhillips Co., Total SA and Statoil ASA that are upgrading heavy oil
in the Orinoco.
Chavez, who a day earlier was given power by congress to issue laws by
decree in energy and other areas, said he was ready to sign a decree for the
nationalization of the four Orinoco projects by May 1. He said that state oil
company Petroleos de Venezuela SA, would take a stake of "no less than 60
percent."
"I'm sure that they're going to accept this because we are going to continue
being partners. Now, if they aren't in agreement, they are totally free to
leave," he said.
"We hope these companies cooperate," he said.
When private companies producing oil elsewhere in the country submitted to
state-controlled joint ventures last year, few resisted because they were
reluctant to abandon Venezuela, which has the largest oil deposits outside of
the Middle East.
But Chavez's increasing intervention in the economy has rattled more
risk-averse sectors and chilled investment among those who fear a radical turn
to his so-called socialist revolution. Critics say that as he begins a fresh
six-year term, Chavez is taking steps reminiscent of how Fidel Castro
monopolized leadership years ago in Cuba.
Chavez tried to quell those fears Thursday.
"I ask you to see the truth. Don't let yourselves be terrorized. Be free,"
he said, accusing some media outlets and governments of trying to demonize his
efforts. "Evaluate with objectivity and you'll see that there is no reason on
the horizon to feel any kind of fear."
"We are not going to copy the Soviet model nor the current model of
socialism in Europe nor the Cuban model. We are going to create our own model,"
Chavez said.
Chavez has said he will use his special decree powers, which will be in
force for 18 months, to also nationalize the country's biggest
telecommunications company and the electricity and natural gas sectors.
On Thursday, he said the takeover will include Electricidad de Caracas,
which is controlled by U.S. electricity company AES Corp., and four other
regional power companies that are privately run: ELEBOL in Bolivar state, ELEVAL
in the Valencia city, CALIFE in Puerto Cabello, and ELECA on Margarita Island.
Re-nationalizing the sector will involve modifying existing electricity
sector laws, Chavez added without elaborating.
"It was a mistake to leave that sector in the hands of local and
foreign-owned private sector companies," Chavez said, referring to a round of
privatization in the sector in the 1990s.
But he said he had no plans to nationalize the entire economy.
"The nationalizations will always be limited to strategic areas of the
economy," he said.
Chavez referred again to plans to nationalize CA Nacional Telefonos de
Venezuela, or CANTV, but did not give further details. New York-based Verizon
Communications Inc. holds a 28.5 percent stake in CANTV, Spanish
telecommunications company Telefonica SA has 6.9 percent, and the remainder is
held by CANTV workers, the government and other investors.
Government officials have said that the nationalization will be carried out
in line with the law, indicating shareholders will be compensated, but have not
said how much the state payout will be.
Chavez's government has sharply raised taxes and royalties on energy
companies, imposed increasing regulations on the banking sector, and is pledging
to strip the central bank of its autonomy.
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