"Right now, Pdvsa is not a mercantile entity," said Antonio Szabó, a former executive at Pdvsa who left long before Mr. Chávez came to power and who is now chief executive of Stone Bond Technologies, a Houston software and energy consulting firm. "Right now, it's an instrument of the Venezuelan government."

"Even at companies like Total that are moving toward a deal, executives describe tough negotiations that leave them wondering how committed Pdvsa really is to expanding the role of private companies.

"We are proposing to invest in a $4 billion project immediately, and we agree to work in terms of the new law," said Jean-Marie Guillermou of Total's Venezuela operations. "Normally, a country would want to jump on this. They don't do it. Why?"

"The company that has emerged from the ashes of the strike that ended in February 2003 is nothing like the button-down, corporate-style company that in the 1990's was often the No. 1 provider of foreign oil to the United States.

Gone is the by-the-book giant, which had $42 billion in sales, according to filings with the Securities and Exchange Commission last October. Gone is the multinational whose managers once proudly compared Pdvsa to Exxon Mobil. Gone, too, are 18,000 experienced executives and managers who were fired for their role in the strike.

So is the autonomy the company once wielded, replaced by a highly centralized management controlled by the Ministry of Energy and Mines…"

"But while Pdvsa's talk of foreign investment and ramped-up production is welcome in the boardrooms of the world's biggest oil companies, in recent months much of the new earnings have been siphoned from exploration and production projects that some energy analysts say Pdvsa needs to recover fully from the strike. Instead, the windfall is financing a social revolution long promised by President Hugo Chávez's 5-year-old government to extricate the country from its malaise and ease life for the poor, an effort that had been hobbled by the strike and a 2002 coup that temporarily ousted the firebrand leader."

"The government recently announced that $2 billion in Pdvsa revenue would bypass the central bank and form a special development fund to pay for public projects like a hydroelectric plant and a new state airline. Another $1.7 billion - taken from Pdvsa's $5 billion capitalization budget - is going to social programs, Rafael Ramírez, the minister of energy and mines, announced.

And with the Aug. 15 recall referendum that could end Mr. Chávez's presidency drawing ever nearer, the spending spree - on everything from housing to railroads, health clinics and literacy programs - is an increasingly important, and successful, tool for solidifying support for Mr. Chávez. Recent polls show he could squeak to victory."