Venezuela Government To Take Over Oklahoma-Owned Oil Rigs

Thursday, June 24th 2010, 8:39 pm
By: News On 6

By Lori Fullbright, The News On 6

TULSA, OK -- Tulsa-based company Helmerich and Payne says it was shocked to learn in the media, the government of Venezuela plans to take over the company's 11 oil rigs in that country.

Helmerich and Payne shut down those 11 rigs, when the Venezuelan government fell behind on its payments. The company says it wants to drill oil there, but doesn't want to do it for free and right now, is owed about $43 million.

The company even offered to sell the rigs to the government.  So to learn the government plans to just take them is a surprise.

Helmerich and Payne has oil rigs both in the U.S. and abroad, including 11 rigs on land in Venezuela. When their contract was up there in 2009, the company shut down the rigs and stopped pumping oil because of the payment issue.

Not only does the PDVSA, which is the Venezuelan national oil company, owe Helmerich and Payne the 43 million, but also began paying in local currency rather than U.S. dollars for some work. Helmerich and Payne wants that money converted, which is another $14 to $30 million.

The Venezuelan government accuses Helmerich and Payne of refusing to discuss the payment issues and said the company wants to keep the rigs idle.

Some believe President Hugo Chavez sees those idle wells as a plan to weaken his government at a time when he's running for re-election in just a few months. So, he plans to take over the 11 rigs to put them back into production.

Helmerich's president and CEO said "Our dispute with PDVSA has never been very complicated and our position has remained clear: We simply wanted to be paid for work already performed."

The company said if the dispute over money can be settled, they'll get the rigs operating and even offered to sell the rigs and was in the process of negotiations to do just that. They said even now, they've not been officially notified the Venezuelan government plans to take over the rigs.

Helmerich and Payne has worked in Venezuela for 52 years and said it wanted to continue under reasonable conditions, but at the same time, had cut its number of rigs in Venezuela in half in the past 12 years.

The U.S. State Department is urging Venezuela, if it does take over the rigs, to reimburse the company for them.