Even more trouble for the oil majors. Venezuela’s President Chavez has announced a new law that nationalizes the last remaining oil production sites that are under foreign company control.
The nationalizations, which affect oil production in the heavy fuel Orinoco Oil Belt, will take effect on May 1st of this year, until which time companies may negotiate the terms of the nationalization.
The decree means that the state oil company will take a controlling 60 per cent interest in joint ventures signed before Chavez came to power. Those affected include ExxonMobil, ChevronTexaco, Statoil, ConocoPhillips, and BP.
“We are recovering property and management in these strategic areas,” said Chavez. “The privatization of oil is over in Venezuela. This was the last area that we hadn’t recovered. This is the true nationalization of the oil. The oil belongs to all Venezuelans.”
The oil majors may be cash rich, but they are running out of countries to operate in.