President Hugo Chávez's government took over Venezuela's last privately run oil fields Tuesday, intensifying a power struggle with...

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BARCELONA, Venezuela — President Hugo Chávez’s government took over Venezuela’s last privately run oil fields Tuesday, intensifying a power struggle with international companies over the world’s largest known single petroleum deposit.

Newly bought Russian-made fighter jets streaked through the sky as Chávez shouted “Down with the U.S. empire!” to thousands of red-clad oil workers, calling the state takeover a historic victory for Venezuela after years of U.S.-backed corporate exploitation.

“The nationalization of Venezuela’s oil is now for real,” said Chávez, who added that for Venezuela to be a socialist state, it must have control over its natural resources.

He accused foreign oil companies of bad drilling practices due to their hunger for quick profits and said Venezuela could sue them for causing lasting damage to oil fields.

Oil Minister Rafael Ramirez said the fields had reverted to state control just after midnight. State television showed cheering workers in hard hats raising the flags of Venezuela and the national oil company over a refinery and four drilling fields in the Orinoco River basin.

While the state takeover had been planned for some time, BP, ConocoPhillips, Exxon Mobil, Chevron, France’s Total and Norway’s Statoil remain locked in a struggle with the Chávez government over the terms and conditions under which they will be allowed to stay on as minority partners.

All but ConocoPhillips signed agreements last week agreeing in principle to state control, and ConocoPhillips said Tuesday that it too was cooperating.

Analysts say the companies have leverage because Venezuela’s state oil company, Petroleos de Venezuela, cannot transform the Orinoco’s tarlike crude into marketable oil without their investment and experience.

“They’re hoping … that as time passes Chávez will realize he needs them more than they need him,” said Michael Lynch, an analyst at Winchester, Mass.-based Strategic Energy and Economic Research.

He predicted most oil companies — with the possible exception of Exxon Mobil — would stay.

Multinationals pumping oil elsewhere in Venezuela, one of the leading suppliers of oil to the United States, submitted to state-controlled joint ventures last year because they were reluctant to abandon the profitable operations.

Chávez said the state is taking a minimum 60 percent stake in the Orinoco operations, but he is urging foreign companies to stay and help develop the fields. They have until June 26 to negotiate the terms.

The stakes are high for both sides. The Orinoco River basin is recognized as the world’s largest known oil deposit, potentially holding 1.2 trillion barrels of extra-heavy crude.

If Venezuela is able to recover much of that, it would surpass Saudi Arabia as the nation with the most reserves. If the big oil companies were to leave, Chávez said state firms from China, India and elsewhere could step in, but industry experts doubt they are qualified.

Chávez “is going to discover that nationalism is one thing, but money talks,” Lynch said. “And I don’t think he’s going to be able to get more money out of the Orinoco or the foreign oil companies without being a lot nicer to them.”

The companies have invested more than $17 billion in the projects, estimated to be worth $30 billion.

The oil companies may need convincing that Venezuela will be a good place to continue to do business.

Chevron’s future in Venezuela “will very much be dependent on how we’re treated in the current negotiation,” said David O’Reilly, chief executive of the San Ramon, Calif.-based company.

Venezuela may still prove enticing because three-quarters of the world’s proven reserves are controlled by state monopolies.

Nationalization of the oil industry has been tried in Venezuela before.

Venezuela shut companies out of the oil sector between 1976 and 1992 before beginning a series of partial privatizations, which Chávez is rolling back.

He is also nationalizing electricity companies and the country’s biggest telecommunications company, and has threatened to take over private hospitals if they continue raising prices for care.

Late Monday, meanwhile, Chávez took a step toward severing his ties with the world multilateral financial system by announcing that Venezuela would quit the World Bank and the International Monetary Fund (IMF).

The practical impact of the move is unclear. But withdrawing from the world’s two premier financial institutions, which have been associated since World War II with U.S. economic policies, would send a powerful political statement

It was unclear how much money the World Bank and the IMF would have to hand over to Caracas. Venezuela’s share of the IMF is worth $3.9 billion, though it wasn’t known whether the IMF would be expected to pay Venezuela that much when its membership is terminated.

There was no reaction from either organization Tuesday.

Material from McClatchy Newspapers is included in this report.