Chávez Seeks to Reassure Investors on Venezuela

Venezuelan President Hugo Chávez, gearing up for a long-anticipated auction of oil rights later this week, on Tuesday sought to allay concerns of private investors, as hundreds of students protested in Caracas, accusing the president of silencing a private television channel.

Speaking at a ceremony for the launch of a joint venture between Petróleos de Venezuela SA, Venezuela's state oil monopoly, and Italian energy company Eni SpA, Mr. Chávez said foreign investors have nothing to fear from his government. The left-leaning, populist president has nationalized dozens of private companies over the years, including assets of Eni and other foreign oil producers. Eni CEO Paolo Scaroni called the agreement 'historic" and said the company had moved on from the "many disputes" it had with the Venezuelan government.

Opponents of Venezuelan President Hugo Chávez demonstrate in Caracas on Tuesday in support of TV station RCTV.

Mr. Chávez said at the ceremony that "investment and experience from foreign oil firms is necessary in Venezuela.

"We need it," confessed the president, in a rare concession to critics who charge that his rough tactics with foreign producers, combined with a lack of investment in PdVSA, have undermined the country's ability to further develop its vast reserves and allowed rivals to eat away at its share of the global demand for oil. The auction set for Thursday, for instance, is the first new contest for oil rights in Venezuela since Mr. Chávez came to power in 1999.

Despite the political and economic turbulence in Venezuela, which is grappling with a recession and high inflation, the auction is expected to draw interest from numerous energy companies from around the world. It remains unclear whether foreign producers will compete enthusiastically or make cursory bids for the rights on offer—seven oil blocks in the eastern Orinoco region.

Mr. Chávez's comments on Tuesday were seen by some as an effort to ensure that the auction goes well. "It's important that it be successful because it's Chávez's first," said Luisa Palacios, managing director for Latin America at New York-based Medley Global Advisors.

Protests in Venezuela continued Tuesday as students rallied against Mr. Chávez's government, criticizing a new law that forced a TV station aligned with opposition political groups off cable and satellite platforms. Hundreds of demonstrators marched across Caracas, the capital, to the offices of a government-run TV network, accusing the state channel of bias, and demanding that the private channel, Radio Caracas Televisión Internacional, or RCTV, be allowed to broadcast as before.

Government officials say the channel disobeyed new regulations requiring cable and satellite broadcasters to televise certain government programming, including speeches by Mr. Chávez. Two students were killed during protests on Monday, after gunfire and explosives went off during conflicts between police and demonstrators.