• Short Summary

    The Venezuelan Government formally nationalised its oil industry on Thursday (1 January)...ending more than 50?

  • Description

    The Venezuelan Government formally nationalised its oil industry on Thursday (1 January)...ending more than 50 years of foreign control.

    President Carlos Andres Perez hoisted a huge Venezuelan flag at the site of the country's first commercially productive well near Lake Maracaibo, in western Zulia State, to symbolise the takeover.

    About 150 guest,s including representatives of all the OPEC countries, watched the ceremony at oilwell Zumaque One, 500 miles (800 kilometres) west of Caracas.

    Zumaque One was drilled in 1914 and soon afterwards Venezuela began producing and exporting crude oil at the rate of about 332 barrels per day.

    Exports now number 2,220,000 barrels per day, with a further 100,000 barrels being held for domestic use.

    The oil industry -- with more than 30,000 workers and responsible for around 85 per cent of the country's foreign exchange, some 9,000 million dollars last year, (about 500 million pounds sterling) is now controlled by the State corporation Petroven.

    While most major oil exporting countries can see their oil reserves rapidly swindling, Venezuela expects to remain oil rich for another two centuries.

    And although the Government had expressed confidence in its ability to handle the complex industry, nationalisation is still a gamble. Opposition politicians and some private business sectors have aired doubts about the action.

    The National Congress passed the Oil Nationalisation Bill last August, offering the 21 foreign oil companies operating there, and 17 satellite firms, a total of more than 1,000 million dollars (abut 570 million pounds sterling) in compensation, which they accepted.

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    Reuters - Source to be Verified
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