(BN) “Venezuela Owes $12 Billion for Seized Assets, Chamber Says”

In Uncategorized on March 3, 2010 by German Rivero-Zerpa

Venezuela owes $12 billion to more than 20 companies that belong to the Venezuela-U.S. Chamber of Commerce for assets the government seized over the past three years, chamber president Carlos Henrique Blohm said.

    The assets of 28 members of the chamber, including nine companies that provided oil service work for state oil producer Petroleos de Venezuela SA, have been nationalized Blohm said today. Of the nationalized companies, 22 have gotten no response from the government to their requests for compensation, he said.

Four companies have been paid, and two have received partial compensation, Blohm said.

     “PDVSA is very behind in paying off debts to some of our members,” Blohm said, declining to name any of the companies that are owed money for compensation.

     Venezuelan President Hugo Chavez has nationalized parts of the country’s oil, cement, metals and utilities industries as he extends the role of the state in the economy to create what he calls “21st century socialism.” U.S. oil companies Exxon Mobil Corp. and ConocoPhillips, whose assets were taken in 2007, are involved in arbitration proceedings against the South American country.

     Venezuela Oil Minister Rafael Ramirez wasn’t available for comment when his office was contacted by Bloomberg News.

     The chamber of commerce, known as Venamcham, has more than 1,100 members including Cargill Inc., Kraft Foods Inc., Nestle SA, Ford Motor Co. and General Motors Co.

     Bilateral trade between Venezuela and the U.S. was $37.4 billion last year, according to the U.S. State Department.

                          Dollar Sales

     Members of the chamber of commerce are also owed about $7 billion in delayed dollar sales at the official exchange rates, Blohm said. The Foreign Exchange Administration Commission, known as Cadivi, which approves dollars for importers as part of currency controls established in 2003, has recently been assigning dollars approved as long as a year ago, Blohm said.

     The dollars at the official rate would be used to repatriate as much as $1 billion of dividends, he said.

     Phone calls to the communications office of Cadivi seeking comment weren’t answered after regular business hours.

     Cadivi has been adapting its system to process requests at two different exchange rates after Chavez devalued the currency on Jan. 8 and created a multi-tiered exchange system where imports considered essential are given 2.6 per dollar and non- essential goods receive 4.3 per dollar.

     Companies that don’t get government approval to buy dollars at the official rates turn to the unregulated currency market, where traders said the bolivar traded at 6.78 per dollar today.

     Venezuela’s electricity rationing and rolling blackouts this year may shave 1 percentage point off gross domestic product, Blohm said. The economy shrank 3.3 percent in 2009.


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