Venezuela, the world’s largest known single petroleum deposit, took over its last privately run oil fields yesterday, along with electricity companies and the country’s biggest telecommunications company, which could intensify a power struggle in the international market.
Government accused foreign oil companies for bad drilling practices due to their hunger for quick profits, which causing damage to its oil fields. President Hugo Chavez’s government declares Venezuela to be a socialist state it must have control over its natural resources.
Planned state takeover over oil field jeopardizes the future of big oil driller like as, BP PLC, ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France’s Total SA and Norway’s Statoil ASA. Pulling out would be damaging for the companies. They have invested more than $17 billion in the projects, now estimated to be worth $30 billion.
Analysts are expecting that turmoil could cause production to fall as report verify that since takeovers Venezuela’s overall output has declined by close to 4 percent, or 100,000 barrels a day.
It is not the first time when Venezuela tries to nationalize its oil industry; it tried it earlier, though with a different tack. Venezuela shut companies out of the oil sector completely between 1976 and 1992 before beginning a series of partial privatizations, which is now Mr. Chavez is putting back again on track.
Via: financial times
image: google
