Not since the 1970s has the world seen anything like it. On the eve of his third term in office, Venezuela’s fiery president Hugo Chávez has announced a sweeping nationalisation of the economy, encompassing the telecommunications sector, electricity companies and heavy oil upgrading projects in the Orinoco river belt.

Mr Chávez has long clashed with domestic businessmen, who he has accused of supporting a failed coup against him in 2002. Now foreign companies are fearing that they could lose their shirts in Venezuela, as companies did during the last wave of nationalisations in Venezuela, Mexico and elsewhere.

Among the companies frantically working the phones today: BP, ExxonMobil, Chevron, Total, ConocoPhillips and Statoil - which have collectively ploughed more than $17 billion into the heavy oil projects. They are desperately trying to find out what Mr Chávez meant when he said the projects "should become state property". Was he referring to existing plans to give the government a majority stake in the project or are they facing outright expropriation?

Others on the phone to Caracas include AES, the US-based power company that owns Electricidad de Caracas; and Verizon Communications, which controls the telecommunications giant, CANTV.

On the broader financial front, there are fears that Mr Chávez’s drive to control every facet of the economy would end just as badly as it did the last time. His decision to strip the central bank of its independence raised fears of a return to hyperinflation. Venezuela’s bonds fell more than 1 per cent on the news.

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