Chavez Seizes Control from Big Oil

[Scatillac]

PUERTO PIRITU, Venezuela (Reuters) -- President Hugo Chavez's government took over Venezuela's last remaining privately run oil fields Tuesday, intensifying a decisive struggle with Big Oil over one of the world's most lucrative deposits.

Oil Minister Rafael Ramirez declared that the oil fields had reverted to state control just after midnight. Television footage showed workers in hard hats raising the flags of Venezuela and the national oil company at a refinery and four drilling fields in the oil-rich Orinoco River basin. Chavez planned a more elaborate celebration Tuesday afternoon with red-clad oil workers, soldiers and a fly over by Russian-made fighter jets.

London-based BP reports a drop in first quarter profits, as expected.

The companies ceding control include BP, ConocoPhillips, Exxon Mobil, Chevron, France's Total SA and Norway's Statoil ASA. All but ConocoPhillips have agreed in principle to state control, and Venezuela has warned it may expropriate that company's assets if it doesn't follow suit.

Despite the fanfare, these companies remain locked in a behind-the-scenes struggle with the Chavez government, and appear to be taking a decisive stand, demanding conditions - and presumably compensation - to convince them that Venezuela will continue to be good business.

Chevron's future in Venezuela "will very much be dependent on how we're treated in the current negotiation," said David O'Reilly, chief executive of the San Ramon, Calif.-based company. "That process is going to have a direct impact on our appetite going forward."

Chavez says the state oil company, PDVSA, is assuming at least 60 percent of each of the Orinoco operations, but has invited the companies to stay as minority partners. They have until June 26 to negotiate the terms, including compensation and reduced stakes.

"We are going to take over some oil fields that have continued to be in the hands of transnationals," Chavez said Sunday, calling it "the last step" in recovering state sovereignty over oil.

Forcing the world's biggest multinational oil companies to cede majority control of their joint operations in Venezuela's most promising oil fields is the culmination of a nationalist drive by Chavez that has increasingly squeezed the industry of profits.

The stakes are high for both sides.

If he can persuade the foreign companies to stay, Venezuela will be on track to develop the planet's largest known oil deposit and possibly surpass Saudi Arabia as the nation with the most reserves. But if he scares them away, the Orinoco River region could end up starved of the investment and know-how needed to transform the Orinoco's tar-lake crude into marketable crude oil.

While Chavez says state firms from China, India and elsewhere can step in, industry experts doubt they are qualified.

Amid the turmoil, new investment from the private companies has already dried up.

But for the companies, pulling out of the Orinoco would be damaging.

They have invested more than $17 billion in the projects, now estimated to be worth $30 billion. Venezuela has indicated it may just pay the lesser amount, using oil and tax forgiveness to further reduce the cash payout.

But three-quarters of the world's proven reserves are already controlled by state monopolies, so Venezuela may still prove enticing.

Nationalization of the oil industry has been tried in Venezuela before. Venezuela completely shut private companies out of the oil sector between 1975 and 1992 before a series of partial privatizations.


Good im glad, and i hope we pull out of there. 1st off we shouldnt be there he hates us, 2nd it will drive up oil prices even more, and cause a much larger demand for hybrids and electrics, as well as ethanol.

Im happy to see this happen.

[Tacks]

Good im glad, and i hope we pull out of there. 1st off we shouldnt be there he hates us, 2nd it will drive up oil prices even more, and cause a much larger demand for hybrids and electrics, as well as ethanol.

Im happy to see this happen.

Lol you're pretty clueless.

[Evermore]

Good im glad, and i hope we pull out of there. 1st off we shouldnt be there he hates us, 2nd it will drive up oil prices even more, and cause a much larger demand for hybrids and electrics, as well as ethanol.

Im happy to see this happen.

Lol you're pretty clueless.

[Xaiveir]

Good im glad, and i hope we pull out of there. 1st off we shouldnt be there he hates us, 2nd it will drive up oil prices even more, and cause a much larger demand for hybrids and electrics, as well as ethanol.

Im happy to see this happen.

Lol you're pretty clueless.

Agree

Scat stick with what you know and do best, Dogs named Rusty.

[Scatillac]

people dont change if they dont have to, ever. alternative fuels only gained the interest of the masses because of gas prices, not global warming. People only give a damn if their way of life is threatened. This is a threat, and maybe they will educate themselves. I apologize if you have to think twice about going to McDonalds for your cheeseburger next time cause it might cost u 4.00 in gas. deal with it.

[Scatillac]

oh yea, sorry you are so narrow minded guys, you are welcome for the eye opener. get some insight.

[Evermore]

lol shouldnt you be taking pics of your neighbor humping the dog?

[Tacks]

people dont change if they dont have to, ever. alternative fuels only gained the interest of the masses because of gas prices, not global warming. People only give a damn if their way of life is threatened. This is a threat, and maybe they will educate themselves. I apologize if you have to think twice about going to McDonalds for your cheeseburger next time cause it might cost u 4.00 in gas. deal with it.

I'm sorry you're too poor to afford gas.

[Scatillac]

lol shouldnt you be taking pics of your neighbor humping the dog?

look if you want pics if a dude doing a dog, search some porn sites, i wont provide you with your fantasy pr0n.

as for "pics" ill put them up in a couple of hours when i got home. along with the video.

[Lyion]

people dont change if they dont have to, ever. alternative fuels only gained the interest of the masses because of gas prices, not global warming. People only give a damn if their way of life is threatened. This is a threat, and maybe they will educate themselves. I apologize if you have to think twice about going to McDonalds for your cheeseburger next time cause it might cost u 4.00 in gas. deal with it.

While your end means is perhaps a noble ideal, perhaps, agreeing with a country that is overtly changing from a democracy to a tyrant led dictatorship in front of our eyes isn't something many people on either side of the political spectrum are going to agree with.

Anyway you slice it, these moves are a slap in the face of freedom, democracy, and a push towards a totalitarian dictatorship with the front 'for the people', which it obviously is not.

[Snero]

that really depends on the situation though, if these foreign companies were taking what they could with no regard to the general population, and contributing very little, then yeah i don't blame chavez at all. It's too easy to see this kind of headline and start screaming dictator, so far at least he has been democratically elected

[Evermore]

lol shouldnt you be taking pics of your neighbor humping the dog?

look if you want pics if a dude doing a dog, search some porn sites, i wont provide you with your fantasy pr0n.

as for "pics" ill put them up in a couple of hours when i got home. along with the video.

i was referring to the "proof" you were going to post. You really are clueless.

[brinstar]

fuck Big Oil and the douchebags they pay to get elected

this move IS a slap in the face of the version of freedom and democracy Big Oil and its government stooges shove down our throats daily

if you want to make a (renewable energy) omelette, you're going to have to break some (Big Oil payroll) eggs

[vonkaar]

What kind of car does Scat drive btw?

Just wondering

[Scatillac]

a nissan sentra se-r 4 cyl 2.0 liter.

[Eziekial]

This is just another nail in Venezuela's coffin. I have a couple friends from that country and they claim that most of the wealthy/intelligent people got out after Hugo was first elected.

Once those plants start failing because no one knows how to run them, that country will implode. I want to feel sorry for all those poor people but they brought it on themselves just like Boliva is doing.