Venezuelan troops seize oil firms' property

President Hugo Chávez has sent troops to seize boats and facilities owned by oil service companies as part of a "revolutionary offensive" in Venezuela. The socialist leader said the move would liberate the country's oil industry from capitalism and return its natural wealth to the people. On Friday the state took control of more than 300 vessels and 39 ports and docks in Lake Maracaibo, one of South America's biggest oil reserves. Two US-owned gas facilities have also been taken over. The expropriations, the latest move in a two-year campaign against foreign and domestic companies, placed 8,000 oil workers under the umbrella of the state oil company, PDVSA. One company affected by the takeover is Aberdeen-based energy firm John Wood plc, which said that PDVSA had taken control of one of its contracts. "This is a revolutionary offensive," Chávez told them in a televised address. "These spaces are now for the people, we have freed them from capitalism, they are for the creation of a new country." The timing seemed driven more by financial considerations than ideology. PDVSA, the government's cash cow, has recently clashed with oil contractors over fees for extracting Venezuela's heavy crude. The state company wants to cut costs by 40% because tumbling oil prices have slashed revenue and, it says, the value of contracts. Chávez said the move would save the country $700m and lead to greater development. Earlier in the week the national assembly paved the way with a draft law allowing the seizure of some service businesses without further legal measures. The speed of the takeovers reflected alarm over dwindling government coffers, an unfamiliar constraint for a socialist revolution built on an oil boom. PDVSA owes billions of dollars to contractors, several of whom have halted production. The state company is in dispute with its workers over a pay freeze, an unpopular measure given 30% inflation. Labour disputes across the economy are increasing, prompting the government to try to sideline trades unions with "workers' ­councils". Chávez, a former tank commander, remains popular for spending oil revenues on social programmes for the poor. Austerity measures will test that support. Analysts said a recent crackdown on opposition mayors and governors showed the government was hunkering down for tough times ahead. The move came amid warnings that Venezuela's oil output may fall below two million barrels per day for the first time in 20 years.