Venezuela's Chavez vows to begin takeover of oil companies

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CARACAS — Venezuela’s President Hugo Chavez vowed to begin the takeover of a series of oil service companies today, just a day after congress cleared the path for more state involvement in the business.

The president said Thursday the government would move quickly to gain control over service companies that perform oil industry duties that were once controlled by the state many years ago. Earlier in the day, lawmakers in Venezuela’s largely pro-Chavez congress approved a law that allows Petroleos de Venezuela SA, or PdVSA, to take control of these oil services firms.

“Tomorrow we’ll start recovering the goods and assets that will now belong to the state – social property as it always should have been,” Chavez said in a televised speech. “Mr. Man on the Moon, cover your ears because the cries of anguish from the bourgeoisie will reach the Moon.”

Citing a list of assets to be expropriated, the president mentioned 13 drilling rigs, 39 terminals, 300 boats, and 30 tugboats, which are used in oil production activities in the oil-rich Lake Maracaibo area.

Some 8,000 workers who until now have been employees of private companies, the president said, would now work for the Venezuelan state.

Shortly after the president’s televised appearance, PdVSA made an official announcement to the media of an event Friday in Maracaibo to witness “the takeover of activities in Lake Maracaibo.”

The new law will only affect some service companies, in particular those involved in the water, steam and gas injection needed to increase the rate of extraction from oil wells.

One company that could get hit is U.S. natural gas processor and distributor Williams Cos. Inc., based in Tulsa, Oklahoma which said in April that it plans to write off $241 million related to unpaid fees from PDVSA.

www.marketwatch.com

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