Venezuela seizes oil rigs owned by US company

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.”

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