THE attractions of investing in the North Sea appeared to be underlined when the actions of Venezuelan ministers and Nigerian rebels highlighted the potential pitfalls of operating overseas.

In a sign that it was ready to play tough with oil giants that did not play by its new rules, the Venezuelan government took control of fields operated by Total of France and Italian giant Eni.

Oil minister Rafael Ramirez announced that the state oil company Petroleos de Venezuela had taken control of Total's Jusepin field and Eni's Dacion development, which jointly produce 150,000 barrels daily.

The move came after the firms failed to turn them over to state-controlled joint ventures, under a new system devised by the government to increase the state's share of booming oil and gas revenues.

This has resulted in the production sharing contracts of many companies being replaced by "mixed companies" under which they have to pay much higher royalties and taxes, and in which PDVSA has majority control.

Exxon, the US super-major was so affronted by the notion that it recently sold a stake in one 15,000 barrels-a-day field rather than comply with it, possibly emboldening Total and Eni to take a tough line.

However, warning that Venezuela would not be "trampled on", Ramirez indicated Venezuela was ready to call the majors' bluff, saying those that would not adjust to new laws would not be welcome.

This might appear to be a high-risk game for Venezuela, which is keen to harness foreign capital and expertise to help maximise production from its vast reserves.

Much of these are in the kind of heavy crudes which are hard to get out of the ground and costlier to refine than lighter sweet oils.

However, the fact that Chevron and Royal Dutch Shell have agreed joint ventures may indicate the odds are stacked in the government's favour in an age when companies are desperate to boost production, but running out of new places to explore.

Majors which are investing heavily offshore west Africa received a worrying reminder of the challenges that operating in an area of widespread political instability entailed from events in Nigeria, where rebels have knocked out 27per cent of the country's output.

Militants have pledged more attacks to get a bigger cut for southern Nigerians of the oil revenues held by the federal government of a country which usually produces 2.4 million barrels daily.

Against that background, while chancellor Gordon Brown's decision to increase North Sea taxes in December outraged industry players, ministers may feel producers are unlikely to find better riskadjusted uses for money invested in the province in a hurry.