The Venezuelan government announced plans to nationalize 11 oil rigs owned by American company, Helmerich & Payne, in an effort to save $300 million annually in oil production costs and to lessen the country’s dependence on foreign oil.
The 11 oil rigs are currently unused as the government’s oil production arm, Venezuelan Petroleum (PDVSA) and Helmerich negotiated for better working terms and a potential sale of the rigs. Amidst these negotiations the Oil Minister of Venezuela announced it would simply ask its National Assembly for approval on the seizure. Its justification for its action is based on promoting Venezuela’s oil drilling policy of less dependence and more national production.
Helmerich wants to be compensated millions owed to them for doing business in the country, and expects to be paid for the oil rigs. Helmerich has been doing business in Venezuela for the last 50 years.
Update: The US Governement said Monday that Venezuela must compensate the US driller Helmerich & Payne if the wish to nationalize their 11 oil rigs.Pres and CEO Hans Helmerich was quoted as saying “We are surprised by (Wednesday’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.”