Chavez backs private Venezuelan company

The Associated Press

President Hugo Chavez encouraged entrepreneurs to create a private Venezuelan oil company to help attract more capital to the country’s petroleum industry.

“In the energy and petroleum sector we need domestic private investment,” Chavez said after a rare meeting Feb. 16s with top business executives — with whom he has often been at odds. “I invite them to form a private Venezuelan oil company.”

Chavez said that if Venezuelan entrepreneurs were to form such a company, state-run Petroleos de Venezuela SA, or PDVSA, would be interested in cooperating on projects such as exploring heavy crude deposits in Venezuela’s Orinoco Belt or extracting natural gas from the Mariscal Sucre or Rafael Urdaneta gas fields.

Venezuela has long relied on the expertise of major foreign oil companies for these projects.

The Central Bank said in mid-February that private oil activity grew by 18.6 percent in fourth-quarter 2005 compared with the same quarter the previous year, as new heavy oil projects increased export volumes. State oil activity fell by 0.8 percent in the same period, due to a sharp decline in refining activity.

Relations have often been chilly between Venezuela’s business community and the socialist government of Chavez, who has sought to bring private industries under state control as part of a revolution to help the poor.

The Feb. 16 meeting included representatives from Alimentos Polar, Venezuela’s largest food company, and Santa Teresa Rum.