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Page last updated at 05:03 GMT, Friday, 8 May 2009 06:03 UK

Chavez extends state oil industry

Venezuelan President Hugo Chavez
It is not the first time President Chavez has clashed with oil companies

Venezuela's President Hugo Chavez has announced plans to nationalise companies that provide services for the country's oil industry.

The state oil company has recently clashed with foreign and local service providers over the prices they charge.

The state firm says a falling oil price means the service providers are being paid too much for their work.

President Chavez has re-invigorated his nationalisation programme since his victory in a referendum in February.

He made the announcement of the imminent take over of the oil contractors shortly after the national assembly passed legislation extending the state's control to all activities related to the oil industry.

Grip tightening

The move will place 300 boats, several ports and an estimated 8,000 oil workers under state control.

Most of the nationalisations are expected to take place in region of Lake Maracaibo, in the oil-rich state of Zulia - the centre of Venezuela's oil production.

This is not the first time Mr Chavez has taken over private oil assets, he pushed through a series of nationalisations of foreign energy companies in 2007.

But until now, state control of the oil industry has been limited to production and exploration.

This latest extension of the state into the oil sector will allow the Venezuelan leader to further tighten his grip on the oil industry at a crucial time for the global economy, the BBC's Will Grant in Caracas says.

Venezuela has one of the biggest oil reserves in the world and is the largest oil exporter in the Americas.



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