Chavez: Oil Cos. Must Form Joint Ventures

CARACAS, Venezuela – All foreign oil companies with operating contracts to pump oil Venezuela must comply with a new law and agree to form joint ventures with the government, and any that refuse will not be welcome, President Hugo Chavez said.

Speaking Sunday during his weekly radio and TV program, Chavez reiterated that the government would no longer allow oil companies to run oil fields independently under contract.

Chavez said many companies resisted the shift to joint-venture deals at first, but that most have since agreed.

"Almost all have agreed, there is just one European company left. And I have said: those that don’t accept it should pick up their things and go, and hand over all the (oil) wells," he said.

Oil companies running Venezuela’s 32 oil operating agreements must convert their deals into joint ventures with state oil company Petroleos de Venezuela SA, or PDVSA. The state oil company is to have a majority share in all joint ventures with foreign firms.

The government signed a series of deals in August with eight companies to move toward joint ventures.

The agreements will be valid until the National Assembly approves definitive guidelines for joint ventures with PDVSA, which are to determine how much managerial control firms will retain.

The government will hold stakes of between 60 percent and 80 percent in the new joint ventures, depending on the companies’ investments, Venezuelan Oil Minister Rafael Ramirez told reporters last week.

Chavez’s government also has said foreign oil companies owe the country more than $3 billion in unpaid taxes.

Venezuela is the world’s fifth largest oil exporter and a founding member of the Organization of Petroleum Exporting Countries.