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."
He also said that 3,000 Venezuelan employees in the Sincor project -- jointly owned by France's Total, Norway's Statoil and PDVSA -- would become PDVSA employees.
"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.
"What we want is to negotiate," he said. "We hope these companies cooperate."
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. "So I call to national and international business owners to come, let's work together for the development ... of a mixed economic model."
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 nationalizations 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.
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."
He also said that 3,000 Venezuelan employees in the Sincor project -- jointly owned by France's Total, Norway's Statoil and PDVSA -- would become PDVSA employees.
"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.
"What we want is to negotiate," he said. "We hope these companies cooperate."
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. "So I call to national and international business owners to come, let's work together for the development ... of a mixed economic model."
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 nationalizations 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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