(T)Hugo Chavez has now taken the easily foreseen step of seizing foreign owned oil projects in Venezuela. (Raise your hand if you didn't see this coming, then slap yourself). He plans on "occupying" the oil fields as soon as possible.
Chavez had previously announced the government's intention to take a majority stake by May 1 in four heavy oil-upgrading projects run by British Petroleum PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Total SA and Statoil ASA.
He said Monday that has decreed a law to proceed with the nationalizations that will see state oil company Petroleos de Venezuela SA, or PDVSA, taking at least a 60 percent stake in the projects.
"The privatization of oil in Venezuela has come to an end," he said on his weekday radio show, "Hello, President." "This marks the true nationalization of oil in Venezuela."
By May 1, "we will occupy these fields" and have the national flag flying on them, he said.
The law is expected to be published shortly in the government's official gazette, and the companies will have four months from then to negotiate terms and conditions with PDVSA to decide whether they will take part in new joint ventures as minority partners, Chavez said.
Chavez did not detail how the government will pay for its increased share in the projects in which the companies are estimated to have invested some $17 billion.
Here's a hint: (T)Hugo won't pay for what he is stealing. If anything at all, the companies will be offered pennies on the dollar with a take it or leave it message. Exactly what he already did with the electric utility, in fact. Foreign investment will dry up completely in Venezuela now. Chavez will preside over collapsing infrastructure and nose-diving production.