Venezuela to nationalise US firm's fleet of rigs

Caracas :  Venezuela will nationalise a fleet of oil rigs belonging to US 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 nationalisation 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 country's state oil company PDVSA. Oil Minister Rafael Ramirez said on Wednesday the rigs, the Oklahoma-based company's entire Venezuelan fleet, were being nationalised 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 US 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.

The takeover of Helmerich and Payne's rigs was not a surprise, considering Chavez penchant for nationalisations 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.

Keeping pressure

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

He has threatened to nationalise 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 nationalised 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 nationalised companies fairly, although the 2007 takeovers led to lawsuits from ConocoPhillips and ExxonMobil.