takeover

Last week, the Deputy Chief of Staff for Policy and Homeland Security offered a sharply different account of Venezuela’s 1976 oil nationalization. It is provocative, but it does not hold up to the record.

President Carlos Andrés Pérez (1974-1979) proclaimed the takeover of the petroleum industry on January 1, 1976. The announcement occurred at the Mene Grande oilfield in Zulia. Crucially, the transfer from private control to a state-run model went smoothly. The major multinationals were compensated, invited to work with the new state-owned company, Petróleos de Venezuela (PDVSA), as service and technology providers, and the process triggered no diplomatic incident with the United States. A brief look at the facts does not support claims of “theft of American wealth and property,” since “the tyrannical expropriation” was precisely engineered to avoid the kind of rupture Miller describes.

The nationalization of the Venezuelan petroleum industry responded to global events unfolding in the Middle East around 1970. To be sure, Venezuelan politicians had long dreamed of granting the state full control over the most important sector of the country’s economy. However, plans for an eventual state takeover of the oil fields remained nebulous, a goal set for a distant future. Muammar Qaddafi (1969-2011) in Libya, of all figures, provided Venezuelan lawmakers with a concrete horizon for materializing full control over the hydrocarbon sector. The Libyan strongman unilaterally increased royalties and taxes on multinationals, with Iran pursuing a similar approach. OPEC then formalized this push for higher prices at its December meeting that year. What followed in 1971 sent shock waves across the world: Libya nationalized its oil industry, followed by Algeria and Iraq. This process quickly expanded to the rest of the Middle East, setting the backdrop for the fuel shortages of that decade and the energy crisis of 1973. 

This global context greeted President Rafael Caldera (1969-1974), a Christian Democrat of COPEI, who was intent on capitalizing on these favorable winds. Soon, every political faction in Congress sought to outdo the other in displaying their anti-corporate credentials. Caldera stood at the top as the most nationalist of the pack, passing an unprecedented package of bills and decrees destined to expand government control over the industry significantly. By the time he handed power to Carlos Andrés Pérez from Acción Democrática (AD), de facto state control over the entire industry was already in place. Nationalization became the only politically safe position when the electoral campaign of 1973 started. Once elected, Carlos Andrés Pérez authorized the creation of a Presidential Commission in charge of studying the state takeover and proposing a bill to that effect, to be approved by Congress in 1975. Ordinary Venezuelans shared this renewed fervor for ownership over the national riches of the country, though in a conflicted way.

Polls by the weekly political magazine Resumen showed broad support for nationalization. Yet respondents also rated working conditions at the foreign oil companies very favorably and many wanted foreign capital to remain involved after the takeover because they trusted the firms’ experienced managers. At the same time, they doubted the state’s capacity to run complex industries, while still believing it could improve over time and that a state-run oil sector was in the nation’s interest. That nuance rarely appeared in Congress.

The nationalization became a fait accompli without antagonism with the U.S. government or the multinationals

COPEI and a constellation of center-left and leftist organizations pushed for an immediate, total takeover without any foreign role. Some opposed compensation altogether and even welcomed a showdown if necessary, seeing local employees working for these multinationals as threats to a “genuine” nationalization of the industry. Venezuelan managers soon came under attack from politicians accused of having “their minds colonized” by the American and British firms. They were also viewed as “centers of anti-Venezuelan activity.” Insults in the press and public spaces galvanized domestic employees to take action. Led by Venezuelan mid-level managers such as Gustavo Coronel from Royal Dutch Shell, the managerial class came together to form Agrupación de Orientación Petrolera (AGROPET). The nonprofit aimed to help the country prepare to take full responsibility for the hydrocarbon sector.

From March 1974 through 1975, AGROPET ran a public campaign for an orderly, compensatory nationalization built on continuity, not a politicized break. Their activities included appearing on radio programs, giving TV interviews, publishing in newspapers, and participating in public forums, including congressional meetings, and talks with members of the  Presidential Commission mandated by President Pérez. The irony of this body is that it gathered representatives from prominent sectors of society. And yet the Commission excluded the people who actually ran the industry.

AGROPET quickly steered the nationalization debate back toward a technocratic solution. The organization’s pivotal moment came in January 1975, when its leaders met with President Pérez and laid out what became the blueprint for the 1976 nationalization. They argued for an industry built on administrative efficiency, technological progress, apoliticism, and sound management not a politicized rupture. Their model envisioned a holding company with four affiliates that would absorb concessionaire operations. The new organizational culture would blend practices inherited from the Creole Petroleum Corporation and Shell, and the nationalized industry would retain ties to its foreign predecessors. Under this proposal, Petróleos de Venezuela (PDVSA) became, in effect, the direct descendant of the multinationals that built Venezuela’s modern oil industry. It perpetuated the business philosophy of the multinationals. Persuaded by Venezuelan managers, Pérez sided with the technocrats and sent an amended nationalization bill to Congress, crucially allowing foreign capital to return under Article 5. The AD-dominated legislature defended the bill and enacted it in August 1975. Two months later, Creole and the other firms accepted a compensation package of about $1 billion for their expropriated assets.

The nationalization became a fait accompli without antagonism with the U.S. government or the multinationals. It constituted less a watershed than a continuation of relationships the Venezuelan state and foreign oil companies had built across the twentieth century on new terms. PDVSA quickly signed service and technology agreements with the very companies it had expropriated. What’s more striking is that this smooth outcome became, in part, an unintended consequence of Venezolanization: the deliberate integration of Venezuelans at every level of the corporate ladder, a policy initiated by Creole and Shell in the 1940s. Unusual in the industry at the time, it stood out as a strand within a broader set of corporate social responsibility practices these companies implemented in Venezuela. Locals trained through that system helped make the transition to state control orderly and broadly beneficial.

For much of the political opposition, however, the outcome felt bittersweet. They denounced its chucuta nature (a “half-baked” nationalization) and framed Article 5 as outright betrayal. Many wanted the kind of dramatic showdown associated with Cárdenas in Mexico, Mossadegh in Iran, or Velasco Alvarado in Peru, cases where claims of expropriation and “theft” of U.S. property could at least be mounted. Venezuela in 1976 stood far away from that drama, and once the transfer was complete, business continued as usual despite the lamentations of certain congressmen. Venezuela’s 1976 oil nationalization was engineered to preclude confrontation. Getting the history right matters. If the current U.S. administration wants to cite this episode to justify pressure, escalation, or exceptional measures, it has chosen a poor example, precisely because the process avoided the kind of rupture Mr. Miller invokes. So, por este camino no es.

UN refugee agency says women and children arriving ‘exhausted and severely traumatised’ after fleeing eastern DRC.

More than 84,000 people have fled to Burundi from the eastern Democratic Republic of the Congo (DRC) amid a Rwanda-backed rebel offensive near the countries’ shared border, according to the latest United Nations figures.

The UN refugee agency (UNHCR) said on Friday that Burundi had reached a “critical point” amid the influx of refugees and asylum seekers fleeing a surge in violence in the DRC’s South Kivu province.

“Thousands of people crossing the border on foot and by boats each day have overwhelmed local resources, creating a major humanitarian emergency that requires immediate global support,” UNHCR said, noting that more than 200,000 people had now sought refuge in Burundi.

“Women and children are particularly affected, arriving exhausted and severely traumatised, bearing the physical and psychological marks of terrifying violence. Our teams met pregnant women, who shared that they had not eaten in days.”

The exodus began in early December when the M23 rebel group launched an assault that culminated in the capture of Uvira, a strategic city in the eastern DRC that is home to hundreds of thousands of people.

Refugees started crossing into Burundi on December 5, with numbers surging after M23 seized control of Uvira on December 10. On Wednesday, M23 said it was withdrawing after international condemnation of its attack on the city.

In Burundi, displaced families face difficult conditions at transit points and makeshift camps with minimal infrastructure, the UN said.

Many have sheltered under trees without adequate protection from the elements, and a lack of clean water and proper sanitation.

About half of those displaced are children less than the age of 18, along with numerous women, including some who are pregnant.

Ezechiel Nibigira, the Burundian president of the Economic Community of Central African States (ECCAS), reported 25,000 refugees in Gatumba in western Burundi, and nearly 40,000 in Buganda in the northwest, most of them “completely destitute”.

Augustin Minani, the administrator in Rumonge, told the AFP news agency that the situation was “catastrophic” and said “the vast majority are dying of hunger.”

Refugees recounted witnessing bombings and artillery fire, with some seeing relatives killed and others forced to abandon elderly family members who could not continue the journey.

M23 withdrawal

M23 announced earlier this week it would begin withdrawing from Uvira, with the group’s leadership calling the move a “trust-building measure” to support United States- and Qatari-led peace efforts.

However, the Congolese Communications Minister Patrick Muyaya dismissed the announcement as a “diversion”, alleging it was meant to relieve pressure on Rwanda.

Local sources reported that M23 police and intelligence personnel remained deployed in the city on Thursday.

The offensive extended M23’s territorial gains this year after the group captured the major cities of Goma in January and Bukavu in February.

The rebel advance has given M23 control over substantial territory in the mineral-rich eastern DRC and severed a critical supply route for Congolese forces along the border with Burundi.

M23 launched the Uvira offensive less than a week after the presidents of the DRC and Rwanda met with US President Donald Trump in Washington, DC, to reaffirm their commitment to a peace agreement.

The rebels’ takeover of the city drew sharp criticism from Washington, with officials warning of consequences for what they described as Rwanda’s violation of the accord. Rwanda denies backing M23.

The fighting has killed more than 400 civilians in the DRC and displaced more than 200,000 since early December, according to regional officials and humanitarian organisations.

The broader conflict across the eastern part of the country, where more than 100 armed groups operate, has displaced more than seven million people, the UN refugee agency says.

The United States has fully commited to its enforcement of sanctions on Venezuela by seizing a large oil tanker off its coast. President Donald Trump publicly announced the operation on December 10^th and authorities said a joint FBI/Homeland Security/Coast Guard team executed a court-ordered seizure of the vessel, which was transporting Iranian and Venezuelan crude in violation of U.S imposed sanctions.

This is reportedly the first U.S. seizure of a Venezuelan oil shipment since sanctions began way back in 2019. “We’ve just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized, actually,” says Donald Trump.

Trying to maintain the credibility of U.S. sanctions at a time when their enforcement have increasingly been challenged by other international actors such as Russia or Iran. Now, The U.S. is willing to take direct action beyond economic wars, even at the risk of diplomatic and military escalation.

Reactions from Caracas

Venezuela publicly denounced the action and accused Washington of blatant theft describing the seizure as “an act of international piracy”. Venezuelan President Nicolás Maduro has long cast himself as the victim of a U.S. led campaign to oust him from the country in order to seize the vast oil wealth on the country’s shores. He reiterated that the U.S. military buildup, which started this summer, including carrier strike groups and bases is directly aimed at overthrowing him.

Maduro’s supporters rallied in the streets against foreign aggression even as officials prepared diplomatic protests to international bodies. For the time being, he faces limited other practical options for retaliation as Venezuela’s navy is in no position to challenge U.S. maritime dominance, and legal recourse through international courts would likely take years.

Russia’s Offers Full Support

Moscow reaffirmed its backing for Maduro, emphasising the legitimacy of Venezuela’s government and condemning what it described as unilateral U.S. actions. An ally in South America provides Russia opportunities for energy investment, and a way to challenge U.S. influence.

The tanker seizure allows Moscow to frame Washington as overreaching and destabilising, a narrative it also applies to recent U.S. actions in Eastern Europe and the Middle East. While Russia is unlikely to escalate militarily, its political backing is significant.

China’s Strategic Role, A Potential Mediator?

Avoiding direct confrontation with Washington over the seizure, Beijing has reiterated its general opposition to unilateral sanctions and calling for international dialogue. However, China remains Venezuela’s most important economic partner and oil consumer, giving it substantial influence over any talks in the region.

Chinese companies have adapted to sanctions by purchasing Venezuelan crude oil at discounted prices, often through intermediaries. For Beijing, Venezuela is also part of a broader strategy to diversify energy supplies and expand its economic reach to the Americas.

Impact on Oil Markets

The announcement caused a modest spike in oil prices around the globe; for example: Brent crude briefly rose about 0.4% to around $62 a barrel, before returning to normal levels in the following few days.

The incident also highlighted Venezuela’s export challenges: under sanctions, its oil trades at a deep discount for its main trade partners, China and Russia. American oil companies with Venezuelan ties reported no immediate trouble. Chevron the U.S. firm that co-owns Venezuela’s largest oil project said its operations there continue normally, and U.S. imports of Venezuelan crude have even ticked up slightly in recent months.

Broader Consequences

Neighbouring countries such as Cuba and other Caribbean states depend on Venezuelan oil and could feel its effects. Sanctioning Venezuela was intended to pressure the regime into political concessions, yet Maduro remains firmly in power.

Enforcement actions like this tanker seizure may increase short-term pressure, but they also come with great risk for the stability of the Caribbean. Venezuela’s experience mirrors that of Iran and Russia, suggesting that sanctions alone may be insufficient to produce regime change, particularly when the targeted government is provided external backing.

Possible Future Scenarios and Implications

One scenario is a continuation of this low-level rise in tensions, with the U.S. stepping up enforcement and Venezuela responding through diplomatic protests while relying on Russian support.

Another is a negotiated de-escalation, potentially linked to limited sanctions relief in exchange for political concessions, though past efforts suggest this would be difficult to achieve with the current White House administration.

A more destabilising scenario would involve a potential confrontation at sea and broader disruption to energy markets. However, this scenario remains unlikely for the time being.

With information from Reuters and BBC News.

A cautious calm has settled over the eastern Democratic Republic of the Congo (DRC) city of Uvira in South Kivu province, as residents begin emerging from their homes following its capture by M23 rebels.

The capture earlier this week threatens to derail a United States-brokered peace agreement, signed with much fanfare and overseen by President Donald Trump a week ago, between Congolese and Rwandan leaders, with Washington accusing Rwanda on Friday of igniting the offensive.

Regional authorities say at least 400 civilians, including women and children, have been killed in the violence between the cities of Bukavu and Uvira, both now under M23 control.

Al Jazeera is the only international broadcaster in Uvira, where correspondent Alain Uaykani on Saturday described an uneasy calm in the port city on the northern tip of Lake Tanganyika, which sits directly across from Burundi’s largest city, Bujumbura.

Uaykani said government and allied militias, known as “Wazalendo”, which had been using the city as a headquarters, began fleeing even before M23 fighters entered.

Residents who fled as the Rwanda-backed group advanced have begun returning to their homes, though most shops and businesses remain shuttered.

“People are coming out, they feel the fear is behind them,” Uaykani said, though he noted the situation remains fragile with signs of intense combat visible throughout the city.

Bienvenue Mwatumabire, a resident of Uvira, told Al Jazeera he was at work when fighting between rebels and government forces broke out, and he heard gunshots from a neighbouring village and decided to stop, but said that “today we have noticed things are getting back to normal.”

Baoleze Beinfait, another Uvira resident, said people in the city were not being harassed by the rebels, but added, “We will see how things are in the coming days.”

M23’s spokesperson defended the offensive, claiming the group had “liberated” Uvira from what he called “terrorist forces”. The rebels say they are protecting ethnic Tutsi communities in eastern DRC, a region that has seen fighting intensify since earlier this year.

The offensive, which began on December 2, has displaced more than 200,000 people across South Kivu province, according to local United Nations partners.

Rwanda accused of backing rebels

South Kivu officials said Rwandan special forces and foreign mercenaries were operating in Uvira “in clear violation” of both the recent Washington accords and earlier ceasefire agreements reached in Doha, Qatar.

At the UN Security Council on Friday, US ambassador Mike Waltz accused Rwanda of leading the region “towards increased instability and war,” warning that Washington would hold spoilers to peace accountable.

Waltz said Rwanda has maintained strategic control of M23 since the group re-emerged in 2021, with between 5,000 and 7,000 Rwandan troops fighting alongside the rebels in Congo as of early December.

“Kigali has been intimately involved in planning and executing the war in eastern DRC,” Waltz told the UNSC, referring to Rwanda’s capital.

Rwanda’s UN ambassador denied the allegations, accusing the DRC of violating the ceasefire. Rwanda acknowledges having troops in eastern DRC but says they are there to safeguard its security, particularly against Hutu militia groups that fled across the border to Congo after Rwanda’s 1994 genocide.

The fall of Uvira has raised the alarm in neighbouring Burundi, which has deployed forces to the region. Burundi’s UN ambassador warned that “restraint has its limits,” saying continued attacks would make it difficult to avoid direct confrontation between the two countries.

More than 30,000 refugees have fled into Burundi in recent days.

The DRC’s foreign minister urged the UNSC to hold Rwanda accountable, saying “impunity has gone on for far too long”.

A report by the American Enterprise Institute’s Critical Threats project said Rwanda provided significant support to M23’s Uvira offensive, calling it the group’s most consequential operation since March.

Al Jazeera’s UN correspondent Kristen Saloomey said UNSC members were briefed by experts who noted that civilians in DRC are not benefitting from the recent agreements negotiated between Kinshasa and Kigali.

More than 100 armed groups are fighting for control of mineral-rich eastern DRC near the Rwandan border. The conflict has created one of the world’s largest humanitarian crises, with more than seven million people displaced across the region.

The M23 group is not party to the Washington-mediated negotiations between DRC and Rwanda, participating instead in separate talks with the Congolese government hosted by Qatar.