Talks on the state takeover of private sector steelmaker Sidor are nearing completion, according to President Hugo Chávez, who is actively pursuing a policy of nationalizing companies he deems to be of "strategic importance" to the economy.
Chávez made his statement to reporters at the end of a press conference that ended at the unconventional hour of midnight on Tuesday. He was not reported to have gone into details, and much less any indication of likely compensation terms.
A 60% interest in Sidor was purchased in 1997 by an Argentine group led by the engineering company, Techint. The deal was worth $1.2 million, and unconfirmed reports suggest that Sidor's current owners are looking for as much as four times that much.
Negotiations on compensating shareholders for the takeover began after Chávez abruptly announced earlier this year that Sidor was to be taken into state ownership. This was well before the world financial crisis broke, clouding the outlook for large companies in primary industries such as Sidor.
The president is said to have mentioned a sum of $800 million as his final and highest offer. Sidor's reaction wasn't made public but has been described by one observer as "a big fat negative."
Chávez has also spoken of the present owners staying on with a small stake of "perhaps 10 percent." Again, while there's been no reaction in public, it's said the shareholders aren't interested and want a clean break with Venezuela "providing they get their money."
The takeover is also said to have posed difficulties for Argentine President Cristina Fernández de Kirchner, after she was asked to intervene on the company's behalf earlier this year, and duly spoke with Chávez. What was said between the two leaders hasn't been disclosed.
In the meantime, Sidor has come to be plagued by a series of labor disputes which have prompted protests and outbreaks of disorder involving employees and the security forces.
Unconfirmed reports say that at least one worker was killed in clashes with the National Guard (GN), who claim they were fired upon by a gunman among the demonstrators. The possession of firearms is as commonplace in Venezuela as the tendency to use them.
Apart from Sidor, Chávez intends to nationalize the three largest cement producers in Venezuela, all of them, like Sidor, majority owned by foreign interests. Last year, he demanded, and largely got, a majority state interest of 60% or more in oil field operations.
These included four heavy oil field projects in the Orinoco Basin, known in Venezuela as the Faja. Terms have been reached with most of the private oil companies, principally European, and compensation is said to have been agreed with them, although no sums have been released so far.
But Chávez and the state oil corporation, Petróleos de Venezuela (PDVSA) have run into serious obstacles in dealings with two United States oil majors, ConocoPhillips and ExxonMobil.
Energy and Oil Minister Rafael Ramírez has stated several times that talks with ConocoPhillips continue and that some sort of deal is in sight. In private, industry sources say the talks are "going round and round in circles" with ConocoPhillips playing a long waiting game.
There's no pretence that the two sides are working towards an agreement as far as ExxonMobil is concerned. Instead, ExxonMobil is in a protracted stand-off with the government over surrendering its Cerro Negro field in the Orinoco.
ExxonMobil is the biggest oil outfit on the planet and has resorted to law. It has launched court cases in Britain, The Netherlands and the United States.
After temporarily freezing Venezuelan assets, a judge in London ruled some months ago that the case was outside British jurisdiction. This decision was greeted by Ramírez as an outright victory for Venezuela.
The case in The Hague is said to be moving at snail's pace, with only an opening hearing so far. Much the same is said about the third case, which has been placed before a court in New York.
Proceedings there have yet to begin, according to reports reaching Caracas. Legal observers say this case is likely to prove the hardest one for PDVSA, not least because of New York State law and the fact that ExxonMobil will be on its home turf.
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