Venezuela says take a loss or leave

May 12, 10:15 AMDallas Oil and Gas ExaminerAlisa Martin

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Venezuela's President Hugo Chavez. AP/Miraflores
Press Office

The government of Venezuela is seizing the assets of 60 local and foreign-owned oil and gas field service companies.

Companies affected include Oklahoma-based Williams Companies, with at least $324 million in assets including two large high pressure gas injection plants. The government has seized 300 boats, docks and other installations. Eight thousand employees working for contractors will be absorbed into PDVSA, the state-owned oil and gas company.

Oil service heavyweights Halliburton and Schlumberger will not be affected, according to comments attributed to Venezuelan Oil Minister Rafael Ramirez.

Now Venezuela has control of transport companies and a water reinjection facility in the Lake Maracaibo area, and gas compression projects in the eastern part of the country that increase the output of the country's most valuable crude.

Many operators say PDVSA stopped paying contractors as far back as last August, when crude prices declined. Reports cite a total of $14 billion owed.

A law passed Thursday helped pave the way for further nationalization, allowing the government to pay contractors with government-debt instruments. The message to debt holders seems to be, take a loss or leave and file suit.

Earlier this year, Venezuela sought international partners to invest for 40 percent interest in three mult-billion dollar heavy oil projects in the Orinoco belt.