KBTX | Bryan & College Station, TX | Aggieland News

Venezuela Seizes 11 U.S. Oil Rigs

By: AP
By: AP

CARACAS, Venezuela – Venezuela's government has seized control of 11 oil rigs owned by U.S. driller Helmerich & Payne, which shut them down because the state oil company was behind on payments.

Oil Minister Rafael Ramirez announced that Venezuela would nationalize the Tulsa, Oklahoma-based company's rigs. He said in a statement Wednesday that Helmerich & Payne had rejected government demands to resume drilling operations for more than a year.

Helmerich & Payne announced in January 2009 that it was stopping operations on two of its drilling rigs, because Venezuela's state-run oil company, PDVSA, owed the company close to $100 million. It said it would shut down the rest of its rigs by the end of July as contracts expired unless PDVSA began to make good on its debts.
The company said Thursday that PDVSA's debt was $43 million as of June 14.

Referring to Helmerich & Payne, Ramirez said: "There's a group of drill owners who have refused to discuss service prices and have preferred to have this equipment put away for a year."
President and CEO Hans Helmerich said in a statement on Thursday the company's position has remained clear: "We simply wanted to be paid for work already performed."

"We stated repeatedly we wanted to return to work, just not for free," he said. "We are surprised by yesterday's announcement only because we have been in ongoing efforts in a good faith attempt to accommodate a win-win resolution, including a willingness to sell rigs."
The company has worked in Venezuela for 52 years, Helmerich added.
U.S. State Department spokesman Mark Toner said he hopes Helmerich & Payne is compensated and suggested the takeover and other recent nationalizations 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," Toner said. "This is the latest in such an instance where international investors, their investments are being nationalized by the government of Venezuela. It doesn't speak or bode well for the investment climate there."

Helmerich & Payne is not the only oil services company to have complained about a delay in payments. Dallas-based Ensco International Inc. said last year that it had suspended oil drilling operations off Venezuela's Caribbean coast because Venezuela owed it $35 million — prompting PDVSA to take over the company's operations.

The government of President Hugo Chavez has nationalized dozens of privately owned companies in recent years as the socialist leader seeks to expand the state's role in the economy. Government critics and many business owners argue the takeovers violate private property rights.

Helmerich & Payne Inc. is primarily a contract drilling company. As of June 8, the company's existing fleet included 214 U.S. land rigs, 39 international land rigs and nine offshore platform rigs.


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