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US deplores Chavez's nationalization plans
AFP
WASHINGTON
Petroleumworld.com 01 10 07The United States on Tuesday deplored plans by Venezuela's leftist President Hugo Chavez to nationalize major utility and oil facilities which could violate bilateral contracts.
"Nationalization has a long and inglorious history of failure around the world. We support the Venezuelan people and this is an unhappy day for them," said White House spokesman Tony Snow.
"The proposals he made concerning nationalization are a well-worn path that history has shown doesn't usually benefit the population," State Department spokesman Sean McCormack said.
Chavez, who has repeatedly locked horns with the US administration of President George W. Bush, said Monday he would seek approval for the "mother of all revolutionary laws" to give him the power to nationalize the power and telephone sectors.
The proposed legislation would also allow Chavez to end foreign control of refineries of heavy crude from the Orinoco region in the east.
US multinationals own or have large stakes in most of the companies working in the sectors, and Caracas is also a major supplier of oil to the United States.
US officials called on Chavez to honor contracts and compensate companies losing property in the planned government seizure of their assets.
"At this point if there is a follow-through on nationalization there is an accepted international practice in foreign companies being compensated at fair market value for the assets that have been nationalized and we would expect that Venezuela would follow through on all of its contractual obligations," said McCormack.
US Energy Secretary Samuel Bodman said: "I think the goal here is to enforce the sanctity of contracts, and at least according to what I have read, there is a possibility that (what) Mr. Chavez has talked about would violate that.
"And we can express that in very strong terms, which I do here, and I am sure Secretary (of State Condeleezza) Rice will be doing the same," Bodman told reporters.
Stock prices in Venezuela plummeted early Tuesday a day after Chavez's announcement, declining nearly 17 percent at around 1800 GMT.
In New York, shares in the telecoms company CANTV -- whose main shareholder is the US' Verizon Communications with a 28.5 percent stake -- tumbled by a quarter on opening, trading at 12.50 dollars at 1800 GMT, off from Monday's close at 16.84 dollars.US-Venezuelan relations have been strained since Chavez took power eight years ago with populist, pro-Cuba policies and virulently anti-US rhetoric.
He is due to be sworn in this week to a new six-year term after being re-elected on December 3, and has called for expanding Venezuelan-style socialism.
But the United States is also Venezuela's largest trading partner, and Venezuela is the source of about 11 percent of all US oil imports.
AFP 09 1834 GMT 01 07
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