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Venezuela seizes US oil rigs
Government nationalises fleet of US-owned rigs shut down in a dispute over payments.
Last Modified: 25 Jun 2010 01:55 GMT
Hugo Chavez, the Venezuelan president, has been pushing a policy of energy nationalisation [Reuters]

Venezuela has nationalised a fleet of oil rigs owned by a US-based company which had been shut down in a dispute over payments.

In a statement the Venezuelan government said that seizing control of the 11 rigs was the only way to get them restarted after a year of idleness.

The move comes as Hugo Chavez, Venezuela's socialist president, pushes ahead with a policy of energy nationalisation as he seeks to expand the state's role in the economy.

He has also taken over assets in telecommunications, power, steel and banking.

The fleet of oil rigs belonging to Oklahoma-based energy firm Helmerich and
Payne have been idled for months following a dispute over payments by the Venezuelan state oil company, PDVSA.

Announcing the takeover of the rigs Rafael Ramirez, the Venezuelan oil minister, said companies that refused to put their rigs into production were part of a plan to weaken Chavez's government,

"There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and have preferred to keep this equipment stored for a year," Ramirez told reporters in the oil producing state of Zulia.

"That is the specific case with US multinational Helmerich and Payne."

Payments dispute

Helmerich and Payne announced in January 2009 that it would begin shutting down its drilling operations because PDVSA owed the company close to $100m.

The US firm is not first oil services company to have complained about a delay in payments.

Last year Dallas-based Ensco International Inc. said that it had suspended oil drilling operations off Venezuela's Caribbean coast because Venezuela owed it $35m - prompting PDVSA to take over the company's operations.

Government critics and many business owners have argued against the spate of nationalisations under Chavez saying the seizures violate private property rights.

Commenting on the latest move a spokesman for the US State Department said he hoped that Helmerich and Payne would be compensated and suggested the takeover and other recent nationalisations are scaring off private investment in Venezuela.

"We would just call on them, if they did make such a move, to compensate the owners of those wells," Mark Toner told reporters in Washington.

"This is the latest in such an instance where international investors, their investments are being nationalised by the government of Venezuela. It doesn't speak or bode well for the investment climate there."

Source:
Agencies
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