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PDVSA to Seek Seizure of 11 Helmerich Oil Rigs Involved in Pay Dispute
Petroleos de Venezuela SA, the state oil company, is seeking nationalization of 11 oil rigs owned by Helmerich & Payne Inc., which it accuses of trying to slow crude production in the South American country.
The government-owned oil company will seek National Assembly approval to seize the rigs in Anzoategui state after a payment battle with Tulsa, Oklahoma-based Helmerich & Payne, Rafael Ramirez, oil minister and president of Petroleos de Venezuela, said yesterday in an e-mailed statement.
“There are rig owners that have refused to discuss payment rates for services and preferred to hide the rigs for a year,” Ramirez said. “It’s the specific case of Helmerich & Payne. We won’t allow them to sabotage our operations.”
Helmerich & Payne idled its drilling rigs last year after PDVSA, as the state oil company is known, fell behind on payments to service providers amid a drop in oil output and revenue. Ramirez, who said in January that debts to suppliers had “vanished,” oversaw nationalization of oil ventures with Exxon Mobil Corp. and ConocoPhillips and seizures of assets from more than 60 service companies.
Helmerich & Payne said in a statement that it hadn’t received notice as of this morning from PDVSA or government officials regarding nationalization of its rigs. The company said it has offered to sell rig assets to PDVSA, which has expressed interest in buying the equipment.
Driller ‘Surprised’
“We are surprised by yesterday’s announcement only because we have been in ongoing efforts in a good faith attempt to accommodate a win-win resolution, including a willingness to sell rigs,” Chief Executive Officer Hans Helmerich said in the statement.
Helmerich & Payne fell $1.38, or 3.4 percent, to $39.03 as of the 4 p.m. close of New York Stock Exchange composite trading. The shares have 12 buy ratings from analysts, 11 holds and 1 sell.
A takeover of assets without providing compensation would further discourage foreign investment in Venezuela, said Mark Toner, acting deputy spokesman at the U.S. State Department.
“This is the latest in such an instance where international investors, their companies, are being nationalized by the government of Venezuela,” Toner said. “It doesn’t speak well or bode well for the investment climate.”
Unpaid Bills
Helmerich & Payne, which has operated in Venezuela for 52 years, said it’s owed about $43 million. It had assets with a book value of about $72 million in the country as of March 31.
The driller planned to keep the rigs idle until debts were paid and accumulated bolivars were converted into U.S. dollars, Executive Vice President John Lindsay told investors on an April 29 conference call.
Venezuela is the largest oil producer in South America and a founding member of the Organization of Petroleum Exporting Countries.
To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; David Wethe in Houston at dwethe@bloomberg.net.
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