Ramirez to Push Chavez's Nationalization Agenda

Venezuela's energy and oil minister Rafael Ramirez, who is also president of state oil firm PDVSA, will advance President Hugo Chavez's nationalization agenda in his sector, according to a ministry statement.

Two key points of Chavez's plan--the nationalization of power companies and Orinoco oil belt upgrading assets--fall squarely in Ramirez's field.

"It's quite a responsibility for people since we have been appointed to keep on carrying out these important tasks. The energy and oil ministry and PDVSA have a very important role in building socialism," Ramirez said.

Chavez on Monday announced his plans to nationalize the assets. The president will ask the pro-government, unicameral national assembly to approve "revolutionary laws" to support his nationalization agenda, which also includes incumbent carrier Cantv.

The ministry neither identified which power companies Chavez would nationalize nor specified how the Orinoco projects would be impacted.

SPLITTING ORINOCO JVs

The Orinoco upgrade assets are part of the four E&P joint ventures in the belt that collectively produce 500,000-620,000b/d heavy crude. PDVSA representatives have asked partners in the four Orinoco JVs to split the projects along business lines into E&P and upgrading, a high-ranking official in one of the projects told BNamericas.

"They presented that idea during meetings," said the official on the condition of anonymity. The presidents of all four projects were called to the ministry's offices in Caracas for an emergency meeting. "We expect more information from that meeting," the source said.

The four projects are the following: Ameriven, where PDVSA has 40%; Cerro Negro, where PDVSA has 41.67%; Sincor, where PDVSA has 38%; and Petrozuata, where the state company has 49.9%.

Private-sector partners include ExxonMobil (NYSE: XOM), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Statoil (NYSE: STO), Total (NYSE: TOT) and BP (NYSE: BP).

PDVSA and ministry officials said last year the state company wanted to increase its existing shares in the Orinoco project. However, outright nationalization was not discussed.

POWER

Meanwhile, Venezuela's largest private electricity company EDC has been private since it was created in 1895. US power company AES (NYSE: AES) gained control of EDC in 2000 from a group of Venezuelan investors.

But Chavez said he would re-nationalize assets, meaning companies like Nueva Esparta state-based Seneca, which was privatized in the mid-1990s as part of a brief experiment with free-market reform, could be the target.

Chavez's nationalization of Orinoco, power and Cantv assets would be Venezuela's biggest nationalization since the creation of PDVSA in 1974-1976.

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