Venezuela seizes 60 firms
Venezuela has seized the assets of 60 oil service companies, paving the way for their nationalisation under a new law passed last week. The facilities seized on Friday included gas injection facilities owned by the US energy group Williams Companies, which are considered crucial for boosting oil output from the fields that produce Venezuela's most valuable crude. Hugo Chavez, the president of Venezuela, also sent troops to Ciudad Ojeda, an oil town on the shores of Lake Maracaibo, to seize oilfield service facilities including shipyards and hundreds of boats.
"We have started to nationalise all these activities connected to oil exploitation. This is a revolutionary offensive," Mr Chavez said from a confiscated boat sailing across the lake, according to Reuters. The move signals the president's willingness to expand government control over the industry, which produces 93 per cent of Venezuela's state revenues, as a short-term solution to the country's money woes. The nationalisation law, passed on Thursday, allows Caracas to pay for seized assets with government bonds.
The national oil company, Petroleos de Venezuela (PDVSA), hurt by falling crude prices, stopped paying contractors for their services late last year and has been trying to negotiate much lower rates for drilling and well services, with the aim of cutting costs by 40 per cent. At the end of last year, PDVSA owed US$13.9 billion (Dh48.07bn) to suppliers, most of which remains unpaid. A number of contractors have responded by idling their rigs.
They seized the oil rigs and equipment..............Weren't good at production............and oil production plunged............
They couldn't pay their bills............and didn't pay for the equipment stolen.............