Venezuela pulls control from Big Oil

President Hugo Chavez's government took over Venezuela's last remaining privately run oil fields Tuesday, intensifying a decisive struggle with Big Oil over one of the world's most lucrative deposits.

Oil Minister Rafael Ramirez declared that the oil fields had reverted to state control just after midnight. Television footage showed workers in hard hats raising the flags of Venezuela and the national oil company at a refinery and four drilling fields in the oil-rich Orinoco River basin. Chavez planned a more elaborate celebration Tuesday afternoon with red-clad oil workers, soldiers and a fly over by Russian-made fighter jets.

The companies ceding control include BP Plc (Charts), ConocoPhillips (Charts, Fortune 500), Exxon Mobil (Charts, Fortune 500)., Chevron (Charts, Fortune 500), France's Total SA (Charts) and Norway's Statoil ASA (Charts). All but ConocoPhillips have agreed in principle to state control, and Venezuela has warned it may expropriate that company's assets if it doesn't follow suit.

Despite the fanfare, these companies remain locked in a behind-the-scenes struggle with the Chavez government, and appear to be taking a decisive stand, demanding conditions - and presumably compensation - to convince them that Venezuela will continue to be good business.

Chevron's future in Venezuela "will very much be dependent on how we're treated in the current negotiation," said David O'Reilly, chief executive of the San Ramon, Calif.-based company. "That process is going to have a direct impact on our appetite going forward."

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