Posted on 01/09/2007 9:09:53 AM PST by Cincinatus' Wife
BOGOTA, COLOMBIA — Delivering on campaign pledges to move Venezuela toward socialism, President Hugo Chavez announced plans Monday to nationalize the country's telephone and electricity sectors and hinted that he would seek a majority stake in so-called heavy oil projects in the Orinoco River basin.
"We are heading toward socialism, and nothing and no one can prevent it," Chavez said at a ceremony in Caracas to swear in new Cabinet members.
Since the late 1990s, Houston-based ConocoPhillips, Exxon Mobil, Chevron Texaco and other firms have invested more than $17 billion into four major ventures in the vital Orinoco basin of eastern Venezuela. The projects refine deposits of tarlike heavy oil into commercial crude.
Deposits of heavy oil and bitumen, which is used to make boiler fuel, could be as high as 270 billion barrels. By contrast, the country's proven reserves of conventional oil stand at 77 billion barrels.
Venezuela's state-run energy company, known as PDVSA, holds stakes ranging from 30 percent to 49 percent in the Orinoco projects.
Chavez said Monday that "in the Orinoco region, international companies control and dominate the refining processes of heavy crude. That has to be passed on to Venezuela."
Like other oil-rich nations in times of high energy prices, Venezuela, the world's fifth-largest petroleum supplier, has been moving to take a greater share of profits. The government has already raised taxes on the Orinoco projects from 34 percent to 50 percent and hiked royalties to 33.3 percent.
Still, most foreign-owned energy companies have gone along with the new rules to preserve their access to the country's oil, since many major deposits elsewhere in the world have been put off-limits by the host countries. The biggest customer for Venezuelan oil is the United States.
Chavez asked the National Assembly, which his allies control, to give him powers to carry out many of his proposals by executive decree.
Utilities to be nationalized The companies that apparently would be nationalized include two utilities that were privatized in the 1990s. They are Electricidad de Caracas, which provides power to the capital, and C.A. Nacional Telefonos de Venezuela, known as CANTV, the country's largest publicly traded company.
The New York Stock Exchange halted trading in CANTV's shares. Arlington, Va.-based AES Corp. owns the electric company.
Chavez also pledged to seek an end to the autonomy of the Central Bank and to rename the country the Socialist Republic of Venezuela.
Critics described Monday's announcement as an effort by Chavez to seize greater control of the country and to follow the lead of his hero, Cuba's Fidel Castro, who nationalized major industries shortly after he took power in 1959.
Last week, Chavez cracked down on a frequent media critic, deciding not to renew the license of the country's largest and oldest television network, RCTV. The move drew criticism from the secretary-general of the Organization of American States, Jose Miguel Insulza.
Supporters said that Chavez — who, they point out, was re-elected with 61 percent of the vote and will be inaugurated for a third term on Wednesday — is simply fulfilling campaign promises to his mostly poor supporters.
"Chavez talked about this all during his campaign," said Mark Weisbrot, a specialist in Latin American economies at the Center for Economic and Political Research in Washington. "This is democracy."
john.otis@chron.com
Expropriations Darken Venezuela
Investor's Business Daily | 9 Jan 2006 | Editorial staff
Posted on 01/09/2007 7:56:00 PM EST by Kitten Festival
http://www.freerepublic.com/focus/news/1765004/posts
Hugo Chavez is taking his playbook from Vladimir Putin...
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