Chavez Seizes Control of US Owned Oil Rigs

Venezuela continues its aggressive nationalization of foreign owned businesses.

The government of Hugo Chavez has taken control of dozens of privately owned companies as the government continues to expand the state's role over the Venezuelan economy.

Venezuela seizes 11 oil rigs owned by Helmerich and Payne, a Tulsa, Oklahoma based company, because it refused to start up drilling operations for not being paid $100 million owed them by PSVSA, the state run oil operator.

Oil Minister Rafael Ramirez said Venezuela would nationalize the company's rigs because Helmerich & Payne had rejected government demands to resume drilling operations for more than a year.

The US driller announced in January, 2010 that it was shutting down operations on two of its rigs, because PDVSA owed the company close to $100 million. It said it would halt the rest of its rigs by the end of July as contracts expired unless PDVSA began to make good on its debts.

The Venezuelan oil minister said production has been stopped for more than one year and it has the right to take possession of the oil operations.

Meanwhile, US operator ENSCO, based in Dallas, Texas has also made claims against PDVSA for non-payment of $35 million and shut down its drilling operations off Venezuela's Caribbean coast. PDVSA took over its operations as well.