ERHC Energy Inc (ERHE)

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More trouble for XOM and CVX et al

Chavez has requested special powers twice before.

In 1999, shortly after he was first elected, he was only able to push through two new taxes and a revision of the income tax law after facing fierce opposition in congress. In 2001, by invoking an "enabling law" for the second time, he decreed 49 laws including controversial agrarian reform measures and a law that sharply raised taxes on foreign oil companies operating in Venezuela.

This time, the law will give Chavez a free hand to bring under state control some oil and natural gas projects that are still run by private companies - the latest in a series of nationalist energy policies in Venezuela, a top oil supplier to the United States and home to South America's largest gas reserves.

Chavez has said oil companies upgrading heavy oil in the Orinoco River basin - British Petroleum PLC, Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), ConocoPhillips (COP) Co., Total SA (TOT) and Statoil ASA (STO) - must submit to state-controlled joint ventures, as companies have already done elsewhere in the country.

The law gives Chavez the authority to intervene and "regulate" the transition to joint ventures if companies do not adapt to the new framework within an unspecified "peremptory period."