Chavez to nationalize 'strategic' sectors

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CARACAS, Venezuela -- President Hugo Chavez announced plans yesterday to nationalize Venezuela's electrical and telecommunications companies, pledging to create a socialist state in a bold move with echoes of Fidel Castro's Cuban revolution.

"We're moving toward a socialist republic of Venezuela, and that requires a deep reform of our national constitution," Mr. Chavez said in a televised address after swearing in his new Cabinet. "We are in an existential moment of Venezuelan life. We're heading toward socialism, and nothing and no one can prevent it."

Mr. Chavez, who will be sworn in tomorrow to a third term that runs through 2013, also said he wanted a constitutional amendment to eliminate the autonomy of the Central Bank and would soon ask the National Assembly, solidly controlled by his allies, to give him greater powers to legislate by presidential decree.

The nationalization appeared likely to affect Electricidad de Caracas, owned by Arlington-based AES Corp., and C.A. Nacional Telefonos de Venezuela, known as CANTV, the country's largest publicly traded company.

"All of that which was privatized, let it be nationalized," Mr. Chavez said, referring to "all of those sectors in an area so important and strategic for all of us as is electricity."

"The nation should recover its ownership of strategic sectors," he said.

Before Mr. Chavez was re-elected by a wide margin last month, he promised to take a more radical turn toward socialism.

Mr. Chavez said lucrative oil projects in the Orinoco River basin involving foreign oil companies should be under national ownership. He didn't spell out whether that meant a complete nationalization, but said any vestiges of private control over the energy sector should be undone.

"I'm referring to how international companies have control and power over all those processes of improving the heavy crudes of the Orinoco belt -- no -- that should become the property of the nation," Mr. Chavez said.

In the oil sector, it didn't appear Mr. Chavez was ruling out all private investment. Since last year, his government has sought to form state-controlled "mixed companies" with British Petroleum PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Total SA and Statoil ASA to upgrade heavy crude in the Orinoco. Such joint ventures already have been formed in other parts of the country.