March 31, 2006
Oil companies sign transition pacts with Venezuela

(Reuters) - "Seventeen oil companies operating in Venezuela signed accords in the presence of President Hugo Chávez agreeing to convert operating service agreements to state majority joint ventures.

The Chávez administration last year declared the 32 operating agreements illegal as part of efforts to wrest control of the oil industry from private companies.

'Here, 17 businesses -- transnational and national -- have signed the agreement,' said Chávez. 'We are going to work together.'

He said the 32 agreements had been turned into 30 joint ventures or 'mixed companies' with state oil giant PDVSA.

Companies that signed the transition accords included oil majors such as U.S. based Chevron and Spain's Repsol as well as smaller companies like Harvest Natural Resources.

'As of today we are partners with PVDSA,' said Nemesio Fernández, vice president of Repsol (...)

The operating agreements, signed during the 1990s as part of a push for private investment in the oil sector, functioned as subcontracting agreements in which foreign and private companies pumped around 500,000 barrels per day (bpd) of oil on behalf of PDVSA.

But Chávez said the agreements were overly generous to private companies and did not allow the government to reap the benefits of oil profits (...)".