Venezuela to Nationalize 11 US Oil Rigs

(Dow Jones Newswires) - Venezuela's government said Wednesday it plans to seize control and nationalize 11 oil drilling rigs operated by U.S. firm Helmerich & Payne, which it says were purposely not being utilized as part of a plot against President Hugo Chavez.

State oil company Petroleos de Venezuela, or PDVSA, said in a statement that once the drills were nationalized by the government, PDVSA will be using the them to "impulse" oil production and strengthen the country's sovereignty over the oil sector.

The announcement was made by PDVSA President Rafael Ramirez, who is also Venezuela's energy minister, during a press conference in the oil-rich state of Zulia, according to the statement.

Ramirez said the idled drills were going to be used by the U.S. firm as a "launching pad" for a broader plan by elements in the private sector to "boycott" oil production in order to destabilize the economy and cause problems for the Chavez government.

"There is a sector of drill owners that have rejected discussing rates and service plans with PDVSA and have preferred to store their equipment for one year in Anaco, in the state of Anzoategui," Ramirez said. "The case is specifically about Helmerich & Payne."

As such, the PDVSA chief said the government has requested approval from legislators to declare the company's drilling rigs public property.

"We aren't going to allow them (the opposition) to sabotage our operations like they did in late 2002," Ramirez said.

The Chavez government, in power since 1999, was hit by a crippling oil strike in late 2002 and early 2003 in which PDVSA, then largely controlled by the opposition, completely halted production in an effort to push out Chavez.

Many workers eventually returned to their posts, while thousands of others were fired. PDVSA is now fully controlled by the Chavez government, and its workers take an oath of commitment to "Commander Chavez" and his socialist movement.

In recent years, Chavez has stepped up the nationalization of major parts of the oil industry, which is Venezuela's lifeline. Venezuela is one of the world's largest oil exporters and oil accounts for 96 percent of all its exports.

Officials at Helmerich & Payne were not immediately available for comment.

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