Venezuelan President Hugo Chavez said he has ``rescued'' the oil fields in the Orinoco region where ventures run by foreign oil companies such as ConocoPhillips of the U.S. and France's Total SA have illegally profited.
``The transnational companies that 10 years ago got part of this Orinoco project almost for free took from here all the earnings and more,'' Chavez told thousands of oil workers wearing the red shirts and hats that his supporters favor. The companies violated contracts they signed in the 1990s to build and operate in the region and ``could be sued,'' he said.
Chavez spoke at a May Day ceremony marking the takeover by Petroleos de Venezuela SA of operations at the region's oil facilities. Chavez, who has been in power since 1999, this year stepped up his nationalization efforts, buying out stakes held by foreign owners in the country's biggest electricity producer and largest phone company.
Today's rally follows the April 25 signing of agreements with five of six foreign partners in the four Faja joint ventures. Only ConocoPhillips failed to sign onto the state oil company's demand for operational control of the ventures, which extract the region's tar-like crude and process it for export.
Petroleos de Venezuela, also known as Pdvsa, took control of ConocoPhillips's operations anyway today, and company officials said that the company will now be given a lower priority in ongoing negotiations over payments to the foreign companies for a reduction in their ownership share.
Talks to give the state oil company, also known as Pdvsa, a 60 percent stake in each of the ventures and compensate the foreign owners have June 26 deadline. The projects were built in the 1990s when Venezuela sought increased foreign investment and Pdvsa accepted a minority role.
`Historic Act'
The event was held at the Jose refinery complex on Venezuela's Caribbean coast, where crude oil from the Orinoco region is processed and exported. The facility is 300 kilometers (185 miles) east of Caracas near Puerto Piritu.
``This is not political -- it's an historic act,'' said Francisco Rojas, 54, an oil worker who rode two hours this morning to see Chavez speak. ``There's nothing traumatic about it,'' he said, countering concerns that the change in control might cripple crude oil production in the region. ``It's not that the operators are leaving. We'll just be partners and this is 100 percent profitable for everyone.''
`The New Pdvsa'
The event followed a televised midnight ceremony at the facility in which Oil and Energy Minister Rafael Ramirez was flanked by workers in red hard hats and overalls who exchanged gear with blue-helmeted workers to mark the change of control.
``Welcome to the new Pdvsa,'' Ramirez said. The state oil company was founded in 1976 when Venezuela first nationalized its oil industry. ``With this, Venezuela is finally exercising its right to administer its natural resources for the benefit of the people.''
Houston-based ConocoPhillips said in a statement that it handed over control with the rest of the partners today. Along with two of the four heavy-oil projects, ConocoPhillips also gave up operation of its Corocoro project off the country's northeast coast, the company said.
270 Billion Barrels
The foreign-built joint ventures were the first to tap the Faja Orinoco, which according to the U.S. Department of Energy may contain 270 billion barrels of oil, rivaling Canada's oil sands. Partners include Exxon Mobil Corp., Chevron Corp., Statoil ASA and BP Plc.
The four projects in the Faja are worth at least $25 billion, according to analyst Matt Shaw at Wood Mackenzie consultants in Edinburgh, Scotland, who based his analysis on $40-a-barrel crude. Crude has been between $50 and $75 a barrel for most of the past two years.
The Faja ventures can produce as much as 570,000 barrels a day of processed crude oil, according to analyst Gersan Zurita of Fitch Ratings.
Petroleos de Venezuela says total investment in the projects has been $13.6 billion.
Venezuela is the third-largest supplier of crude oil, gasoline and other refined products to the U.S. after Mexico and Canada. Chavez has been using oil wealth to increase national ownership of strategic industries, increase social spending and become the top energy investor in South America as part of what he calls a socialist revolution opposed to U.S. influence.
``The transnational companies that 10 years ago got part of this Orinoco project almost for free took from here all the earnings and more,'' Chavez told thousands of oil workers wearing the red shirts and hats that his supporters favor. The companies violated contracts they signed in the 1990s to build and operate in the region and ``could be sued,'' he said.
Chavez spoke at a May Day ceremony marking the takeover by Petroleos de Venezuela SA of operations at the region's oil facilities. Chavez, who has been in power since 1999, this year stepped up his nationalization efforts, buying out stakes held by foreign owners in the country's biggest electricity producer and largest phone company.
Today's rally follows the April 25 signing of agreements with five of six foreign partners in the four Faja joint ventures. Only ConocoPhillips failed to sign onto the state oil company's demand for operational control of the ventures, which extract the region's tar-like crude and process it for export.Petroleos de Venezuela, also known as Pdvsa, took control of ConocoPhillips's operations anyway today, and company officials said that the company will now be given a lower priority in ongoing negotiations over payments to the foreign companies for a reduction in their ownership share.
Talks to give the state oil company, also known as Pdvsa, a 60 percent stake in each of the ventures and compensate the foreign owners have June 26 deadline. The projects were built in the 1990s when Venezuela sought increased foreign investment and Pdvsa accepted a minority role.
`Historic Act'
The event was held at the Jose refinery complex on Venezuela's Caribbean coast, where crude oil from the Orinoco region is processed and exported. The facility is 300 kilometers (185 miles) east of Caracas near Puerto Piritu.
``This is not political -- it's an historic act,'' said Francisco Rojas, 54, an oil worker who rode two hours this morning to see Chavez speak. ``There's nothing traumatic about it,'' he said, countering concerns that the change in control might cripple crude oil production in the region. ``It's not that the operators are leaving. We'll just be partners and this is 100 percent profitable for everyone.''`The New Pdvsa'
The event followed a televised midnight ceremony at the facility in which Oil and Energy Minister Rafael Ramirez was flanked by workers in red hard hats and overalls who exchanged gear with blue-helmeted workers to mark the change of control.
``Welcome to the new Pdvsa,'' Ramirez said. The state oil company was founded in 1976 when Venezuela first nationalized its oil industry. ``With this, Venezuela is finally exercising its right to administer its natural resources for the benefit of the people.''
Houston-based ConocoPhillips said in a statement that it handed over control with the rest of the partners today. Along with two of the four heavy-oil projects, ConocoPhillips also gave up operation of its Corocoro project off the country's northeast coast, the company said.
270 Billion Barrels
The foreign-built joint ventures were the first to tap the Faja Orinoco, which according to the U.S. Department of Energy may contain 270 billion barrels of oil, rivaling Canada's oil sands. Partners include Exxon Mobil Corp., Chevron Corp., Statoil ASA and BP Plc.
The four projects in the Faja are worth at least $25 billion, according to analyst Matt Shaw at Wood Mackenzie consultants in Edinburgh, Scotland, who based his analysis on $40-a-barrel crude. Crude has been between $50 and $75 a barrel for most of the past two years.
The Faja ventures can produce as much as 570,000 barrels a day of processed crude oil, according to analyst Gersan Zurita of Fitch Ratings.
Petroleos de Venezuela says total investment in the projects has been $13.6 billion.
Venezuela is the third-largest supplier of crude oil, gasoline and other refined products to the U.S. after Mexico and Canada. Chavez has been using oil wealth to increase national ownership of strategic industries, increase social spending and become the top energy investor in South America as part of what he calls a socialist revolution opposed to U.S. influence.
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