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CU President Perez raising flag at ceremony. (5 shots)
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GV Fighter jets fly overhead. (2 shots)
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SV President Perez speaking at ceremony. (3 shots)
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TOP VIEW Crowd cheering and people waving to President as he finishes his speech. (3 shots)
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TOP VIEW Crowd rushing to see President as he runs to crowd waving handkerchief.
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Venezuelan President Carlos Andres Perez formally took over his country's oil industry, on behalf of the Government, in a special ceremony near Lake Maracaibo, in Western Venezuela, on Thursday.



Raising a Venezuelan flag over Zumaque One -- the country's first ever commercially productive well -- the President symbolically ended more than fifty years of control by foreign owned oil companies.



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 550 million pounds sterling in compensation, which they accepted.



At the ceremony, President Perez said Venezuela now faced "its destiny".



About 150 official guest,s including representatives of all the OPEC countries, attended the ceremony. Despite the Government's confidence in its ability to handle the complex oil industry, nationalisation is still a gamble. Opposition parties and some private business sector have expressed doubt about the move.



Zumaque One was drilled in 1914 and soon afterwards venezuela began exporting about 200 barrels of oil per day. Now exports number well over two million barrels per day, with one hundred thousand barrels held back for domestic use.



The oil industry employs some thirty thousand people, and provides Venezuela with about 85 per cent of its foreign exchange -- about five million pounds sterling in 1975.




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Script is copyright Reuters Limited. All rights reserved

Background: 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.