Venezuela Forces Out American Oil Companies

The United States immediately issued a statement calling on Venezuela to abide by its international commitments, and demanded "fair and just" compensation for the two US companies' interests. The move to increase the state's participation in the Orinoco ventures is part of a wide-ranging nationalisation drive President Hugo Chavez launched in January. So far it has included the telecommunications and electricity sectors, the takeover of idle land, and tighter controls over the private health sector. In the past the big oil companies paid only 1 per cent in royalties for the crude extracted from Orinoco and argued this was justified by the high cost of processing the fuel. Royalties had been raised to 33.2 per cent, while taxes went up from 34 per cent to 50 per cent. US oil giant ConocoPhillips had an interest in the Petrozuata heavy-oil venture, and ExxonMobil had a concession in the Ceiba oil block. US State Department spokesman Tom Casey said Venezuela "like any other government, has the right to make these kinds of decisions to change ownership rules or other kinds of regulations." ... http://www.abc.net.au/news/stories/2007/06/27/1963092.htm

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