Published on
New York Times

Chávez Takes Over Foreign-Controlled Oil Projects in Venezuela

Simon Romero

SAN FELIPE, Venezuela - President Hugo Chávez on Tuesday seized control of the last remaining oil projects in Venezuela controlled by large American and European energy companies.

The move to take over the projects, announced in January, is the centerpiece of recent actions aimed at consolidating his government's control over the economy.

Dressed in red fatigues, Mr. Chávez delivered a fiery speech at the coastal oil refining complex of Jose, denouncing America's economic influence before thousands of supporters also clad in red, the color of his revolution.0502 05

"Today is the end of that era when our natural riches ended up the hands of anyone but the Venezuelan people," Mr. Chávez said during the speech, while speaking glowingly of important allies like Iran, a fellow OPEC member.

Venezuela's control over the oil-production projects, which are in the Orinoco region in the country's interior and worth an estimated $30 billion, will weaken companies like Exxon Mobil, Chevron and ConocoPhillips in one of the world's most promising oil exploration regions.

Venezuela is allowing the private companies to remain as minority partners, but the companies are still far from reaching agreements on compensation for the loss of their assets.


Something is Happening. People are Drawing Lines.
And We’ve Got It Covered.

But we can't do it without you. Please support our Winter Campaign.

The seizure of control is expected to have little immediate impact on oil exports to the United States, the leading buyer of Venezuela's oil despite deteriorating political ties. The United States has steadily diversified its oil sources since a decade ago when Venezuela, which boasts the largest conventional oil reserves outside the Middle East, vied with Saudi Arabia as the country's leading supplier of oil.

Venezuela's oil production has stagnated in recent years and now accounts for about 10 percent of American crude oil imports, ranking behind Canada, Mexico and Saudi Arabia.

Seizing on the symbolic potential of the May Day holiday, Mr. Chávez also said this week that Venezuela would end its affiliation with the International Monetary Fund and the World Bank. Venezuela recently paid off its loans from the organizations.

Venezuela, which is benefiting from high oil prices even as its oil industry is hampered by low investment, has been seeking to counter the influence of the I.M.F. and the World Bank in Latin America by lending billions of dollars to other countries and trying to create a development bank.

Like the I.M.F.'s 184 other member nations, Venezuela is a shareholder in the institution. Mr. Chávez can take back his country's $4 billion stake by withdrawing from the I.M.F.

Copyright 2007 The New York Times Company

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do.

Share This Article

More in: