Chavez to nationalise electricity, phones
Jorge Rodriguez (L) speaks with Venezuelan President Hugo Chavez
after he was sworn in as new Vice President of Venezuela in Caracas
08 January 2006.
Venezuelan President Hugo Chavez said last week he would nationalize
the country's electricity industry and its largest telecommunications
which could have an impact on major U.S. investors in his oil-rich
In a televised address, Chavez, who will be sworn in Wednesday to a
second six-year term, also said he would ask the legislature, controlled
by his allies, to let him rewrite Venezuela's economy through
"All of that which was privatized, let it be nationalized," Chavez
"The nation should recover its ownership of strategic sectors." In
the crosshairs: Electricidad de Caracas, owned by Arlington, Va.-based
AES, and C.A. Nacional Telefonos de Venezuela (CANTV) the country's
largest publicly traded company. AES and Verizon Communications, which
owns 28.5% of CANTV, declined comment.
CANTV's American depositary receipts plunged 14.2% on the New York
Stock Exchange to $16.84 before trading was halted. An NYSE spokesman
said it was unknown when trading might resume for CANTV, the only
Venezuelan company listed on the Big Board.
In his speech, Chavez also alluded to potential changes in the
oil-producing nation's relationship with foreign oil companies, such as
ExxonMobil and ChevronTexaco, which are involved in Venezuela's Orinoco
River basin. "I'm referring to how international companies have control
and power over all those processes of improving the heavy crudes of the
Orinoco belt ? no ? that should become the property of the nation," he
Despite the president's often-fierce rhetoric, foreign companies have
thrived amid Venezuela's oil-fueled boom. From carmaker Audi to the
producer of Heinz ketchup and the major oil companies, all have enjoyed
U.S.-based analysts cautioned that Chavez often makes sweeping public
statements that are followed with more limited action. "The foreign
investors that are there are doing very well. ? The country is flush
with oil money," says Christopher Sabatini, senior policy director of
the Council of the Americas.
Chavez critics, however, warned that he is intent on recreating
Cuban-style socialism. "Chavez idolizes Fidel," says Antonio Szabo, a
former Venezuelan oil official. "Before all is said and done, he is
going to nationalize everything."