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Energy reform takes another radical twist

As he starts a new, six-year term, President Hugo Chávez has promised further nationalisation measures. Foreign companies face an uncertain future, reports Robert Cauclanis from Caracas

FOREIGN energy companies are facing another difficult year in Venezuela. Power utilities are facing nationalisation, the majors are set to lose control of the Orinoco belt's heavy-oil projects and considerable uncertainty remains over how natural gas resources will be developed. In 2006, President Hugo Chávez's government hit them with hefty back taxes, raised oilfield royalty and tax rates, and forced them into signing new contracts giving state-owned PdV majority control of the 32 mature oilfields awarded in the 1990s. Facing ejection from Venezuela's oil patch, most oil companies, including Repsol YPF, Shell, Chevron and Petrobras, acquiesced to Chávez's demands. They also understood th

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