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Venezuela wrests control of oil assets from oil majors news
02 May 2007

Mumbai: Venezuelan government took over the country''s last privately run oil fields and stripped the world''s biggest oil companies of operational control over crude projects in its massive Orinoco belt, intensifying a power struggle over the world''s largest known single petroleum deposit.

Thousands of workers dressed in signature red and backed by troops occupied the multi-billion-dollar installations on May Day as President Hugo Chavez hailed what he called the end of US-prescribed policies that had opened up the largest oil reserves in the hemisphere to foreign investment.

"Today, we are ending this perverse era," Chavez shouted, adding "We have buried this policy of the opening up of our oil ... an opening that was nothing more than an attempt to take away from Venezuelans their most powerful and biggest natural resource."

"Full oil sovereignty. Road to socialism," read huge banners as Russian-made fighter jets roared overhead.

The May Day takeover followed a February decree to transfer operational control of all projects developing the OPEC nation''s Orinoco crude reserve, one of the largest oil deposits outside the Middle East, and came exactly a year after Bolivian President Evo Morales, a leftist ally of Chavez, ordered troops to seize gas fields in his country.

Venezuela, the world''s No. 8 oil exporter, barely pumps 2.6 million bpd.

US companies Chevron, Exxon Mobil and ConocoPhillips, Britain''s BP, Norway''s Statoil and France''s Total, involved in four major projects in the Orinoco belt, followed the Venezulean government''s decree.

The four projects, capable of refining about 600,000 barrels per day (bpd) of heavy, tarry crude, are valued at over $30 billion.

Chavez is using money from his country''s oil price bonanza for spending freely on schools, clinics and food handouts. He is also nationalising power utilities and the country''s biggest telephone company.

Chávez said the state is taking a minimum 60 per cent stake in the Orinoco operations, but he is urging foreign companies to stay and help develop the fields. They have until June 26 to negotiate the terms.

The Orinoco River basin is recognised as the world''s largest known oil deposit, potentially holding 1.2 trillion barrels of extra-heavy crude.

If Venezuela is able to recover much of that, it would surpass Saudi Arabia as the nation with the most reserves. If the big oil companies were to leave, Chávez said state firms from China, India and elsewhere could step in, but industry experts doubt they are qualified.

Venezuela had shut companies out of the oil sector between 1976 and 1992 before beginning a series of partial privatisations, which Chávez is rolling back.

He is also nationalising electricity companies and the country''s biggest telecommunications company, and has threatened to take over private hospitals if they continue raising prices for care.

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Venezuela wrests control of oil assets from oil majors