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Chavez takes over last oil fields

The Venezuelan leader's action intensified a power struggle with foreign oil companies.

BARCELONA, Venezuela - President Hugo Chavez's government took over Venezuela's last privately run oil fields yesterday, intensifying a power struggle with international companies.

Oil Minister Rafael Ramirez declared that the fields had reverted to state control just after midnight. State television showed cheering workers in hard hats raising the flags of Venezuela and the national oil company over a refinery and four drilling fields in the Orinoco River basin.

Chavez, a strident critic of the United States and a leader of the leftist movement in Latin America, traveled to the refinery for a ceremony with red-clad oil workers on May Day, the international workers' holiday. The military planned a flyover by Russian-made fighter jets.

While the state takeover had been planned for some time, BP P.L.C., ConocoPhillips, Exxon Mobil Corp., Chevron Corp., France's Total S.A. and Norway's Statoil ASA remain locked in a struggle with the Chavez government over the terms and conditions under which they will be allowed to stay on as minority partners.

All but ConocoPhillips signed pacts last week under which they agreed in principle to state control, and ConocoPhillips said yesterday that it, too, was cooperating.

Analysts say the companies have leverage because Venezuela's state oil company, Petroleos de Venezuela S.A., cannot transform the Orinoco's tarlike crude into marketable oil without their investment and experience.

"They're hoping . . . that as time passes Chavez will realize he needs them more than they need him," said Michael Lynch, an analyst at Winchester, Mass.-based Strategic Energy and Economic Research. He predicted most oil companies - with the possible exception of Exxon Mobil - would stay.

Multinationals pumping oil elsewhere in Venezuela, one of the leading suppliers of oil to the United States, submitted to state-controlled joint ventures last year because they were reluctant to abandon the profitable operations.

Chavez says the state is taking a minimum of a 60 percent stake in the Orinoco operations, but he is urging foreign companies to stay and help develop the fields. They have until June 26 to negotiate the terms.