Venezuela To Re-Nationalize Several Key Industries

January 20, 2007

On January 8, Venezuelan President Hugo Chavez announced plans to re-nationalize several key industries which, at one time, had been owned by the Venezuelan state but were subsequently privatized as a result of the neo-liberal economic policies of various governments.

The nationalization of vital economic sectors is the sovereign right of Venezuela and part of the government's program of strengthening its economic and political sovereignty. This program is being opposed by the U.S. government; as soon as President Chavez announced the new nationalization plans, Tony Snow, a spokesman for George Bush, said "Nationalization has a long and inglorious history of failure around the world. We support the Venezuelan people and think this is an unhappy day for them."

The latest industries to be re-nationalized include:

-- Venezuela's National Telephone Company (CANTV) whose largest shareholder is the U.S. company, Verizon. Verizon currently owns 28.5% of CANTV.

-- Caracus Electricity (EDC) in which 87% of the shares are held by the U.S. company AES Corporation.

-- Venezuelan state ownership of a majorty of shares in four joint ventures in the Orinoco Oil Belt. Currently, the Venezuelan state has only a minority stake in these projects while the majority control is in the hands of ExxonMobil, Conoco, Chevron, BP, the French company Total and Norway's Statoil. These 4 oil projects produce 600,000 barrels of oil per day or about 18% of Venezuela's total production.