Venezuela's unstable legal system is an obstacle to future investments by European Union states in the world's No 5 oil exporter, a senior European Commission official said. "In Venezuela, today, the development of investment faces an important problem. There is an unstable legal framework," Herve Jouanjean, the commission's deputy director-general for external affairs, told reporters late Thursday. "It's a serious obstacle for future investments," said Jouanjean, who is responsible for Latin America and paid a brief visit to Venezuela this week. He said he had raised the issue of legal security for EU investments in talks with officials of President Hugo Chavez's government.
As a group, the 25-nation European Union is the single biggest foreign investor in Venezuela, where European oil companies like Spain's Repsol-YPF, France's Total and Britain's BP have operations in the country's strategic oil and gas sector.
Left-winger Chavez, a firebrand nationalist first elected in 1998, this month ordered tax hikes and changes of terms for foreign oil field operating contracts in a move that alarmed investors and analysts. Chavez had complained the contracts were "robbing" Venezuela.
The government has also been reviewing investment contracts in the mining and aluminium industries in a campaign to obtain greater financial and technical benefits for the nation.
Foreign land ownership titles are also being checked, and the government has announced the take-over of a large chunk of a British-owned cattle ranch as part of an agrarian reform plan.