In Orinoco, Chavez says the state will take a minimum 60 percent stake in the operations, but he is urging the foreign companies to stay and help develop the fields. They have until June 26 to negotiate the terms, including compensation and reduced stakes.In a related development, Venezuela will be leaving the International Monetary Fund and the World Bank as part of Chavez's efforts to move the country away from capitalism. Chavez is also nationaliizing electricity production in the country and has threatened to seize private hispotals if health care costs continue to rise.The companies appear to be taking a tough stand, demanding conditions - and presumably compensation - to convince them that Venezuela will be a good place to do business.
There are some limmits to Chavez's nationalisation. The state-owned oil company reportedly needs the continued involvement of private multi-natyions such as Chevron and ExxonMobil since the company lacks the expertise to fully exploit Venezuela's oil fields.
Mercopress, an independent news agency in Latin America, describes Tuesday's developments this way:
But in spite of the bombast, this “nationalisation” is in fact the start of a renegotiation of contractual terms that will more than likely leave PdVSA with a majority stake.
The international oil companies – ConocoPhillips, ExxonMobil, Chevron, Total, BP and Statoil – are being faced with several key issues: whether they will retain a sufficient stake to make staying worthwhile; how they are to be compensated for their reduced share; and whether they have a hope of exploiting reserves technically owned by Venezuela.
The market value of the companies’ assets in the Orinoco Belt is about $15bn (€11bn, £7.5bn) meaning $4bn-$5bn is at stake, although analysts say compensation is likely to be less given Venezuela’s threat to pay only book value.