National Industries in Venezuela:

·  Energy Sector

·  Telecommunications: CANTV

·  Steelmaking: Ternium Sidor

·  Cement Industry: Cemex

·  Electricity: Electricidad de Caracas

·  Shipbuilding: PDVSA Naval

·  Hospitals

·  Food Industry: Palmaven, SA (agricultural assistance and conservation projects)

o  Dairy

o  Meat-packing

o  Supermarkets/Food Distribution

o  Sugar Plantations

·  Banking: Banco de Venezuela

·  Consumer Goods:

o  Shopping mall - La Candelaria

More Details:

Venezuela Nationalization

Oil / Natural Gas

Venezuela said in May 2007 that it had taken control of the Orinoco Belt oil projects as part of President Hug Chavez's nationalization drive. Four projects taken over in the Orinoco Belt - which can refine about 600,000 barrels of crude oil a day - reverted to state control at midnight local time. State oil company PDVSA will control at least 60% of the projects, which have been ceded by ConocoPhillips, Chevron, Exxon Mobil, BP, Statoil and Total. Negotiations are continuing about continuing shareholdings and the possibility of compensation for the refineries.

Venezuela has only considered agreements based on the book value of the projects rather than their much larger current net worth.


Oil projects and companies in affected fields
1. Sincor (PDVSA*, Total, Statoil); Petrozuata (PDVSA, Conoco Phillips)
2. Ameriven (PDVSA, Conoco Phillips, Chevron Texaco)
3. Cerro Negro (PDVSA, Exxon Mobil, BP)
*PDVSA is Venezuela's state-owned oil company

Source: http://www.stratfor.com/global_market_brief_chavezs_dual_nationalization_approach

ExxonMobil filed a case with the International Center for Settlement of Investment Disputes over the Venezuelan government’s seizure of the firm’s 41.7 percent stake in the Cerro Negro heavy oil upgrading project in the Orinoco Belt (Orinoco oil is very low-quality and essentially must be refined before being used as “normal” oil) and the La Ceiba oil venture. The government demanded a majority stake but refused to pay cash for the expropriations. Rather than settle as many other firms did, ExxonMobil simply walked away from the project and filed suit. U.S. energy firm ExxonMobil said Feb. 8 that it has won several preliminary cases against Venezuelan state oil monopoly Petroleos de Venezuela (PDVSA). Injunctions now prevent PDVSA from selling foreign assets in the United Kingdom, the Netherlands and the Netherlands Antilles valued at up to $12 billion in each location. ExxonMobil used these orders Dec. 27, 2007, to secure a freeze on PDVSA accounts worth $300 million in the United States.

Telecommunications

On January 8, 2007, President Chávez announced plans to nationalize the country’s largest telecommunications company, CANTV, which is partly owned by Verizon Communications, and electricity companies, which would include EdC (Electricidad de Caracas), which is majority-owned by the U.S.-based AES Corporation. In February, the Venezuelan government negotiated agreements for the purchase of the majority stake of AES in EdC and for Verizon’s stake in CANTV, with officials from both AES and Verizon describing the agreements as fair.

CANTV is partly owned by Verizon Communications, while EdC is majority owned by the U.S.-based AES Corporation. When the nationalizations of CANTV and EdC were announced, there was considerable concern that the companies would not receive adequate compensation. In February 2007, the Venezuelan government ultimately negotiated agreements for the purchase of the majority stake of AES in EdC and for Verizon’s stake in CANTV. Officials of both AES and Verizon described the agreements as fair.24 Foreign investors will likely be wary of investing in Venezuela giving the nationalizations and the government’s increasing role in the economy.

Mining:

Venezuela's foreign minister said in January 2007 that the country is considering nationalizing its mining industry, a week after President Hugo Chavez announced plans to bring the electricity and telecommunications sectors under state control. Chavez also specifically threatened to nationalize Venezuela's largest steelmaker, Argentine-controlled Ternium Sidor if it did not prioritize production for the domestic market and pay more for the raw materials, which it had obtained at a subsidized rate from a state-owned mining company. However, the company later reached an agreement with the government to avoid nationalization.

Steel:

President Hugo Chavez on April 30 2008 ordered the expropriation of Venezuela's largest steel maker after attempts by the government to acquire a majority stake in the company failed. Chavez ordered Sidor nationalized earlier this month, siding with workers who sought improved salaries and benefits. Venezuelan officials had been talking with Ternium representatives to negotiate a price for its 60 percent share in the company, but the two sides were unable to reach an agreement.

Cement:

April 2008 - About three weeks ago, government ministers told three foreign-owned cement companies that Venezuela planned to nationalize the cement industry. Those plans affect Cemex, a Mexican firm; Holcim of Switzerland and Lafarge, which is based in France. Those companies control 92 percent of the cement market in Venezuela.

Food:

March 15 2008 - The government has bought a private chain of meatpacking plants. Chavez said the government purchased the meat plants as part of its efforts to improve food distribution while moving toward a socialist state. He did not identify the company or give details, but said it represents a majority of the country's meatpacking and cold-storage transport facilities.

March 15 2008 - Chavez said Friday his administration is negotiating to buy the Venezuelan dairy company Los Andes. He did not give details, but said the company has the capacity to produce about 30 percent of the country's milk output.

Shipbuilding:

April 23, 2008 - Petroleos de Venezuela SA, the state energy company, took over the government-owned shipbuilder as part of a plan for Venezuela to build its own oil tankers and offshore rigs.

Diques y Astilleros Nacionales CA, which was previously under control of Venezuela's defense ministry, was transferred to the oil company through a resolution published today in the Official Gazette, the formal record of government actions.

Power Companies:

In January 2007 President Hugo Chavez said that the country's nationalization would include all power companies. The government clinched the nationalization of Venezuela's largest private electric company in February 2008, signing an agreement to buy a controlling stake in Electricidad de Caracas from its U.S.-based owner, AES Corp., for $739 million. The agreement to pass the company's 82-percent stake in the utility to the Venezuelan government was signed by Paul Hanrahan, president and chief executive of Arlington, Va.-based AES, during a ceremony at the presidential palace in Caracas.

Hospitals:

In July 2007, President Hugo Chavez said Tuesday his government will nationalize Venezuela's privately owned hospitals and clinics if they fail to reduce health care costs. Chavez has already made significant steps toward this in the past. He has improved the public health care infrastructure by building new hospitals and refurbishing older ones. However, most public health care facilities are poorly stocked with supplies and staff. Venezuela has a two-tiered health care system. Chavez has threatened to nationalize the private clinics that cater to the wealthy and insured if they do not reduce costs. However, there has been nothing new in this arena since last year.

Slaughterhouse:

Chavez announced on March 18 that the government had nationalized a chain of slaughterhouses that makes up the bulk of the meat-processing capacity in the country. "We nationalized, through an acquisition, a great chain of (slaughterhouses) that makes up 70% of the installed capacity in Venezuela," Chavez said in televised remarks. "We're also acquiring milk-products company 'Los Andes' that represents 30% of the milk-processing capacity in the country," he said.

Land:

The Venezuelan government has nationalized two million hectares of land so far. In February, Chavez threatened to take over more land as Venezuela presses ahead in its agricultural revolution.

April 2008 - The government of Venezuela has proceeded with the expropriation of some 2,400 hectares of sugar plantations, El Universal and other local sources reported yesterday. Around 30 owners were affected by the move, which was made after National Land Institute (INTI) officials inspected the properties. According to INTI chief Juan Carlos Loyo, such inspections revealed that around 80% of the land was left idle.