Chavez to expand Venezuela oil nationalizations

President Hugo Chavez has already nationalized most of Venezuela’s energy industry and is preparing to bring chemicals under his wing, but he may still target firms running gas and oil services.

A former soldier inspired by Cuba’s Fidel Castro, Chavez has made energy nationalization the linchpin in his drive to build his own brand of socialism. He has also taken over assets in telecommunications, power, steel and banking.
Over the last month, Chavez has seized a gamut of mostly small oil service companies along with U.S.-owned gas compression units, adding to the mammoth heavy oil projects Venezuela took over in 2007.

The government is now mopping up what is left, preparing to take a majority stake in the OPEC nation’s main private petrochemical projects and possibly eyeing natural gas.

But the really lucrative area of the oil business that Chavez has not yet touched is oil well services such as drilling rigs run by global giants like Halliburton, Schlumberger and Baker Hughes.

“To the extent that the higher value service companies, the drilling companies, refuse to accept the terms that are on offer or refuse a write-down on their debt, they too will be vulnerable to a takeover,” said Patrick Esteruelas of Eurasia Group in New York.

Reuters