Venezuela's legislature on Thursday approved new joint ventures that bring 32 oil fields in the South American country under state control. The oil fields previously were operated independently under contract by private oil companies. However, state-run Petroleos de Venezuela SA (PDVSA) recently signed agreements with the companies to create 21 new “mixed companies” to operate the fields with PDVSA holding a 60 percent to 80 percent stake in each field. Venezuela's 167-member National Assembly, all of whose members are aligned with President Hugo Chavez's ruling coalition, approved the new contracts on Thursday. Several companies returned five of the smallest fields back to PDVSA rather than accept the new terms, which include giving PDVSA control over company boards, reducing drilling acreage by almost two-thirds, and raising income tax rates from 34 percent to 50 percent and royalties from 16.6 percent to 33.3 percent. PDVSA seized another two oil fields, one operated by France's Total and Italy's Eni, after failing to reach an agreement. In total, 30 private companies hold stakes in the new joint ventures, including BP (British Petroleum), Chevron, Royal Dutch Shell, Spanish-Argentine Repsol, China's CNPC, and Japan's Teikoku Oil Company. The fields under the joint ventures account for about 400,000 barrels a day, or one-eighth of Venezuela's official total production of 3.2 million barrels a day. The changes are part of an effort by Chavez's government to impose greater control over the oil sector and extract a larger share of revenues. Oil accounts for 80 percent of Venezuela's export earnings and over half of state revenue.
