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Venezuela to Nationalize US-Owned Oil Rigs

Venezuela has said that it will nationalize 11 oil rigs owned by a US company.

The takeover of the rigs, owned by the Helmerich and Payne oil firm, is the most recent move in a program of nationalization as part of the socialist 'Bolivarian revolution' of Hugo Chavez, the president.

Chavez's socialist revolution has led to banking and power assets being nationalised. Rafael Ramirez, the Venezuelan oil minister, said on Thursday that the facilities were being taken over to bring them back into production. (AFP) The rigs have been out of use for months due to a dispute over payments by PDVSA, the state oil company.

Helmerich and Payne, which owns other rigs in the country, had said that it would not work at the sites until they were paid the $49 million it was owed. It did not immediately comment on the planned nationalization.

Rafael Ramirez, the Venezuelan oil minister, said on Thursday that the facilities were being taken over to bring them back into production.

'Weakening government'

Ramirez said that firms like Helmerich and Payne who had refused to put their rigs into production were aiming to weaken the government.

"There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and have preferred to keep this equipment stored for a year," he said.

"That is the specific case with US multinational Helmerich and Payne."

Venezuela has suffered a reduction in oil output since 2008.

Despite having significant oil reserves the country is undergoing economic struggles, with power shortages and low food resources affecting Chavez's promises to pull people out of poverty.

His government has nationalized telecommunications, power and steel firms during the last three years.

The government also nationalized Banco Federal, a mid-sized bank, last week giving the state control of 25 per cent of the banking sector.

Legislative elections are to be held in September and Chavez needs to reverse popularity losses due to Venezuela's recession before then

Oil-giants such as Halliburton, Schlumberger and Baker Hughes also work in Venezuela, although the former pair have avoided public disputes with the government.

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