Following the December 2002 to February 2003 oil strike, Chávez referred to regaining control of the industry as "re-nationalization". He aimed at improving the efficiency of PDVSA in the context of distributing a greater amount of its revenues to the government and also by certain changes in taxation. Certain tax reforms had already been implemented earlier in Chávez's first term. As of 2001, royalty payments were nearly doubled to 30 percent of the price at which every barrel is sold compared to before when it was 16.67 percent. Also in 2001, the government lowered the income tax levied on oil extraction from 67.6 percent to 50 percent.[12]
It is important to note the political environment during the time of the strike. In April 2002, the opposition took advantage of mass demonstrations in Caracas and attempted to overthrow Chavez. A few months after the failure of the coup and the return of Chavez, a combination of labor unions and business groups called for an "indefinite national strike" which, in many places, turned out to be a forced 'bosses lock out' where the employees were prevented from working.
In 2006, the government had a 40 percent share which was announced to be increased by 20 percent. Some believe this move could potentially burden PDVSA with investment costs, but Chavez created several new subsidiaries of PDVSA to try to prevent unwanted costs from happening. These subsidiaries include agriculture, shipbuilding, construction, and industry.
Different media and spokespersons have reported that Hugo Chávez nationalized oil when referring to these reforms. However, oil was nationalized in 1976.
