Changes

== Geography ==

== Geography ==

[[File:Amazonas Venezuela.jpg|thumb|Orinoco river, Estado Amazonas.]]

[[File:Amazonas Venezuela.jpg|thumb|Orinoco river, Estado Amazonas.]]

*Area: 912,050 sq. km. (352,143 sq. mi.); slightly more than twice the size of California.

*Area: 912,050 km². (352,143 sq. mi.); slightly more than twice the size of California.

*Cities: Capital—Caracas (metro. area pop. 3.2 million). Other major cities—Maracaibo, Valencia, Barquisimeto, Maracay, Merida, Ciudad Bolivar.

*Cities: Capital—Caracas (metro. area pop. 3.2 million). Other major cities—Maracaibo, Valencia, Barquisimeto, Maracay, Mérida, Ciudad Bolivar.

*Terrain: Andes Mountains and Maracaibo Lowlands in northwest; central plains; Guiana Highlands in southeast.

*Terrain: Andes Mountains and Maracaibo Lowlands in northwest; central plains; Guiana Highlands in southeast.

*Climate: Varies from tropical to temperate, depending on elevation.

*Climate: Varies from tropical to temperate, depending on elevation.

The Consumer Price Index increase was approximately 17% at the end of 2006, following increases of 14.4% in 2006 and 19.2% in 2004.  

The Consumer Price Index increase was approximately 17% at the end of 2006, following increases of 14.4% in 2006 and 19.2% in 2004.  

As of January 23, 2003, all foreign exchange requests must be approved by the National Exchange Control Administration (CADIVI) and the Central Bank (BCV) completes all legal purchase and sale of foreign currency. The current exchange control regime rates for U.S. dollar exchange rate are: Bs. 2,144.60=U.S. $1.00 for purchase operations, and Bs. 2,150=U.S. $1.00 for sale operations. The national budget for 2007 assumes that the government will not devalue this year. Nontheless, some local economists expect devaluation in late 2007 due to the increasing disparity between official and parallel market rates.  

As of January 23, 2003, all foreign exchange requests must be approved by the National Exchange Control Administration (CADIVI) and the Central Bank (BCV) completes all legal purchase and sale of foreign currency. The current exchange control regime rates for U.S. dollar exchange rate are: Bs. 2,144.60=U.S. $1.00 for purchase operations, and Bs. 2,150=U.S. $1.00 for sale operations. The national budget for 2007 assumes that the government will not devalue this year. Nonetheless, some local economists expect devaluation in late 2007 due to the increasing disparity between official and parallel market rates.  

Central Bank-held international reserves increased to over U.S. $36 billion at the end of 2006. The reserves would have been higher, but the BCV transferred $6 billion to the National Development Fund (FONDEN) during the last quarter 2005, as directed by the Central Bank Law (July 2005) and an additional $4.3 billion in 2006. The level of international reserves is expected to decrease during 2007 after additional transfers of foreign reserves to FONDEN and because the Central Bank Law established that state-owned oil company PDVSA will only transfer the foreign exchange earnings needed for its domestic expenses, taxes, royalties, and dividends to the BCV, and would transfer the rest to FONDEN.  

Central Bank-held international reserves increased to over U.S. $36 billion at the end of 2006. The reserves would have been higher, but the BCV transferred $6 billion to the National Development Fund (FONDEN) during the last quarter 2005, as directed by the Central Bank Law (July 2005) and an additional $4.3 billion in 2006. The level of international reserves is expected to decrease during 2007 after additional transfers of foreign reserves to FONDEN and because the Central Bank Law established that state-owned oil company PDVSA will only transfer the foreign exchange earnings needed for its domestic expenses, taxes, royalties, and dividends to the BCV, and would transfer the rest to FONDEN.  

Economic prospects remain highly dependent on oil prices and the export of petroleum. In 2005, the oil sector accounted for roughly 15% of GDP, 90% of export earnings, and about half of the central government's ordinary revenues. Venezuela remains the fourth-leading supplier of imported crude and refined petroleum products to the United States. The Venezuelan government has sought more income from the petroleum sector. The first example was a unilateral decision in late 2004 to increase the royalty rate on production from the Orinoco heavy crude "strategic associations" with international oil companies from 1% to 16.67%.

Economic prospects remain highly dependent on oil prices and the export of petroleum. In 2005, the oil sector accounted for roughly 15% of GDP, 90% of export earnings, and about half of the central government's ordinary revenues. Venezuela remains the fourth-leading supplier of imported crude and refined petroleum products to the United States. The Venezuelan government has sought more income from the petroleum sector. The first example was a unilateral decision in late 2004 to increase the royalty rate on production from the Orinoco heavy crude "strategic associations" with international oil companies from 1% to 16.67%.

[[File:Plataforma gas venezuela oil.jpg|left]]

[[File:Plataforma gas venezuela oil.jpg|left]]

In the 1990s, the Government of Venezuela opened up much of the hydrocarbon sector to foreign investment, promoting multi-billion dollar investment in heavy oil production, reactivation of old fields, and investment in several petrochemical joint ventures. By the late 1990s, almost 60 foreign companies representing 14 different countries participated in one or more aspects of Venezuela's oil sector. On November 13, 2001, under an enabling law authorized by the National Assembly, President Chavez enacted a new Hydrocarbons Law, which came into effect in January 2002. This law replaced the Hydrocarbons Law of 1943 and the Nationalization Law of 1975. Among other things, the new law provided that all oil production and distribution activities would be the domain of the Venezuelan state, with the exception of the joint ventures targeting extra-heavy crude oil production. Under the new law, private investors cannot own 50% or more of the capital stock in joint ventures involved in upstream activities. The new law also provided that private investors could own up to 100% of the capital stock in downstream ventures. A Gaseous Hydrocarbons law promulgated earlier by the Chávez government also allowed substantial participation by private investors with respect to gas production ventures.  

In the 1990s, the Government of Venezuela opened up much of the hydrocarbon sector to foreign investment, promoting multibillion-dollar investment in heavy oil production, reactivation of old fields, and investment in several petrochemical joint ventures. By the late 1990s, almost 60 foreign companies representing 14 different countries participated in one or more aspects of Venezuela's oil sector. On November 13, 2001, under an enabling law authorized by the National Assembly, President Chavez enacted a new Hydrocarbons Law, which came into effect in January 2002. This law replaced the Hydrocarbons Law of 1943 and the Nationalization Law of 1975. Among other things, the new law provided that all oil production and distribution activities would be the domain of the Venezuelan state, with the exception of the joint ventures targeting extra-heavy crude oil production. Under the new law, private investors cannot own 50% or more of the capital stock in joint ventures involved in upstream activities. The new law also provided that private investors could own up to 100% of the capital stock in downstream ventures. A Gaseous Hydrocarbons law promulgated earlier by the Chávez government also allowed substantial participation by private investors with respect to gas production ventures.  

During the December 2002-February 2003 general strike, petroleum production and refining by PDVSA, the state-owned oil company, almost ceased. Despite the strike, these activities eventually were substantially restarted. Out of a total workforce of 45,000, over 20,000 PDVSA management and workers were subsequently dismissed because the government asserted they had abandoned their jobs during the strike. Current levels of production remain a subject of debate, with considerable difference between the levels cited by the Venezuelan government and those cited by private sector and international observers.  

During the December 2002-February 2003 general strike, petroleum production and refining by PDVSA, the state-owned oil company, almost ceased. Despite the strike, these activities eventually were substantially restarted. Out of a total workforce of 45,000, over 20,000 PDVSA management and workers were subsequently dismissed because the government asserted they had abandoned their jobs during the strike. Current levels of production remain a subject of debate, with considerable difference between the levels cited by the Venezuelan government and those cited by private sector and international observers.