Venezuela: Oil-related companies expropriated

May 16, 2009
Issue 

Venezuela's National Assembly passed a law on May 7 that assigns control over goods and services connected to the country's petroleum industry to the state.

The law re-establishes government control over a range of activities previously contracted out to foreign transnational companies.

Activities fundamental for petroleum production are now legally under state control.

On May 8, the government expropriated 300 boats, 30 barges, 39 terminals and docks, 5 dams and 13 workshops on Lake Maracaibo, where there are large crude oil reserves.

Venezuelan President Hugo Chavez said that next week they will also start expropriating some petroleum complexes in Monagas state.

Companies affected include US-based Williams Company and the British-based Wood Group consortium.

The National Assembly's statement motivating the expropriations said: "Such activities, which are of strategic character and necessary for the principle industry of the country and that are carried out by PDVSA and its affiliates, were [contracted out by pre-Chavez governments] with the consequent loss of direct control and vulnerability of the Venezuelan state."

Energy minister Rafael Ramirez said the expropriations fulfill Venezuela's constitution, which states that "primary activities are reserved for the absolute control of the Venezuelan state through its national company".

[Abridged from .]

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