Chavez nationalizing US oil rigs

[AZRedhawk44]

http://news.yahoo.com/s/nm/20100624/ts_nm/us_venezuela_nationalizations

CARACAS (Reuters) – Venezuela will nationalize a fleet of oil rigs belonging to U.S. company Helmerich and Payne, the latest takeover in a push to socialism as President Hugo Chavez  struggles with lower oil output and a recession.

A former soldier inspired by Cuba's Fidel Castro, Chavez has made energy nationalization the linchpin in his 'revolution'. He has also taken over assets in telecommunications, power, steel and banking.

The 11 drilling rigs have been idled for months following a dispute over pending payments by the OPEC member's state oil company PDVSA. Oil Minister Rafael Ramirez said on Wednesday the rigs, the Oklahoma-based company's entire Venezuelan fleet, were being nationalized to bring them back into production.

Ramirez said companies that refused to put their rigs into production were part of a plan to weaken Chavez's 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," Ramirez told reporters in the oil producing state of Zulia. "That is the specific case with U.S. multinational Helmerich and Payne."

The company was not immediately available for comment.

Chavez, who faces legislative elections in September, often pushes ahead with radical plans during election campaigns.

The 55-year-old leader is having a hard time in his 11th year in power. Venezuela's economy is the worst performing in Latin America this year, a problem exacerbated by a drop in oil output since 2008, power outages and soaring inflation.

NO SURPRISE

The takeover of Helmerich and Payne's rigs was not a surprise, considering Chavez penchant for nationalizations and the company's refusal to work before being paid the $49 million it has invoiced PDVSA.

Helmerich and Payne is a small player in the drilling industry, but global giants like Halliburton, Schlumberger and Baker Hughes also have a presence in Venezuela.

Halliburton and Schlumberger have avoided public spats with the government.

Chavez has kept pressure up on the private sector in recent months, blaming a "parasitic bourgeoisie" for Venezuela's recession and 30 percent annualized inflation,

He has threatened to nationalize Polar, the top brewer and food processor in the country of 30 million. The government has also seized a bank belonging to an owner of the leading opposition TV station and put an arrest warrant out for his partner, who is now on the run.

Chavez in 2007 nationalized multi-billion dollar projects in Venezuela's vast Orinoco oil region, persuading companies such as BP Plc, to accept minority stakes in facilities they had built.

Last year he ordered the takeover of dozens of smaller oil service companies as PDVSA, reeling from a sharp plunge in oil prices, struggled to pay contractors.

When he was flush with oil cash during a boom in oil prices that ended in 2008, Chavez often compensated nationalized companies fairly, although the 2007 takeovers led to lawsuits from ConocoPhillips and Exxon Mobil.

More recently Venezuela has been slower in paying compensation.

I hope the company scuttles its rigs.  The US Navy is unlikely to intervene in this issue, with Obama as CinC.

[Cromlech]

They can really do that? 

[dogmush]

I'm with Redhawk, Blow 'em in place.

[Monkeyleg]

They can really do that?

Unless my history is rusty, Castro nationalized a number of US-owned businesses when he took over.

[HankB]

All Chavez ought to get is a hole in the water.

[Jamisjockey]

They can really do that? 

Can, and will.  Don't expect BHO to stand in his way.

[RevDisk]

I hope the company scuttles its rigs.  The US Navy is unlikely to intervene in this issue, with Obama as CinC.

I hope the companies can at least remove critical equipment prior to the nationalization if they're too short sighted to scuttle.  It'd be in their best interests to destroy the rigs rather than let them be stolen.  If I was designing a rig, I'd have some system in place to disable them in event of say, damage, terrorist takeover, etc.  Send a coded frequency, rig will not function whatsoever until it receives the "unlock" codes.

[Boomhauer]

Of course Obama's not going to do anything about it. No way he'd move against a role model, especially a role model doing something he really, really wants to do himself

[AJ Dual]

At least Chavez is a patriotic Socialist.

Look what happens when you get one in office that does not even particularly like his country. 

[longeyes]

Not to worry.  Means good union jobs.  In Venezuela.

[kgbsquirrel]

Does anyone know if those rigs are located in Venezuela's territorial waters (within 12 nautical miles from shore) or are they in international waters?

[Balog]

At least Chavez is a patriotic Socialist.

Look what happens when you get one in office that does not even particularly like his country. 

I lol'ed.  Good one AJ.

[sanman]

http://money.cnn.com/2010/06/25/news/economy/shallow_drilling_ban/index.htm?hpt=T2

Stealth ban on gulf drilling? Why don't we just give them to Hugo...he needs them to prop up his crumbling economy. Let our companies, individuals and families foot the bill.

NEW YORK (CNNMoney.com) -- The offshore drilling ban imposed after the BP disaster is only supposed to hit operations in deep water -- 500 feet or more.

But drillers in shallow water say they haven't been issued permits since the April 20 explosion. The delay has already forced hundreds of layoffs, and many more could be on the way.

[KD5NRH]

They can really do that? 

Sure; little-bitty bang in the right place to let the water in, and it heads straight for the bottom.

Oh...I thought you were asking about scuttling.

[Viking]

I'm with Redhawk, Blow 'em in place.

Yeah. Hope they pull an Ellis Wyatt on his communist ass. Blow em up. Leave nothing but worthless scrap metal.
"I am leaving it as I found it. Take over. It's yours."

[lupinus]

I prefer the "park a destroyer next to each rig and dare him to come get them" option.

But then, I'm not in head cheese.

[AZRedhawk44]

I prefer the "park a destroyer next to each rig and dare him to come get them" option.

But then, I'm not in head cheese.

Why not?  It's the hip thing.