Venezuela takes over refineries

[Tim]

Venezuela takes over refineries

Venezuela has said that it has taken control of the massive Orinoco Belt oil projects as part of President Hugo Chavez's nationalisation drive.
Many of the world's biggest oil companies agreed to transfer operational control to the government.

Bolivia's President Evo Morales said his country's takeover of gas fields one year ago had been "a blessing".

Mr Chavez has also said he wants to pull Venezuela out of the International Monetary Fund and the World Bank.



See a map of the oil fields, projects and companies affected
This is the true nationalisation of our natural resources

Hugo Chavez

The president said he had ordered Finance Minister Rodrigo Cabezas to begin formal proceedings to withdraw from the two international bodies.

President Chavez has spoken of his ambition to set up what he calls a Bank of the South, backed by Venezuelan oil revenues, which would finance projects in South America.

Negotiations

Four projects taken over in the Orinoco Belt - which can refine about 600,000 barrels of crude oil a day - reverted to state control at midnight local time.

Mr Chavez told cheering workers that foreign oil companies had damaged Venezuela's national interests and that reclaiming them represented an historic victory.

"This is the true nationalisation of our natural resources," the president said during a ceremony at the Jose Oil processing plant.

"Today we are closing a perverse cycle."

State oil company PDVSA will control at least 60% of the projects, which have been ceded by ConocoPhillips, Chevron, Exxon Mobil, BP, Statoil and Total.

Negotiations are continuing about continuing shareholdings and the possibility of compensation for the refineries.

Venezuela has only considered agreements based on the book value of the projects rather than their much larger current net worth.

Mr Ramirez has said that there may not be compensation at all in some cases.

More surprises

Meanwhile, in Bolivia, the state energy company YPFB said that it would take control of producing and marketing oil and natural gas in the country.

It comes a year after Bolivian President Evo Morales, in his May Day address, shocked international investors by seizing control of the energy industry.

In this year's May Day address, Mr Morales promised to take greater control of the economy from foreign companies.

"If we really want to live in a dignified Bolivia then we must take the path of anti-imperialism, anti-liberalism and anti-colonialism my friends," he said.

The government had hoped to finish nationalising the telecoms industry by May Day, but talks with Telecom Italia - which owns half of the biggest telecoms company - are currently stalled.

Telecom Italia said last week that it was considering seeking international arbitration over the sale of Entel after Bolivia issued two decrees aimed at renationalising the company.

To the north, in Nicaragua, President Daniel Ortega led a May Day march through the capital, Managua.

Mr Ortega returned to power earlier this year. In the 1980s and 1990s his Sandinista government fought US-funded Contra rebels.

On Sunday, he said he was negotiating with the IMF "to leave the Fund" and that he hoped to "get out of the prison" of IMF debt.

[Big A]

This is interesting. I wonder how the World Bank will react. Will see in the coming few years.