Venezuela Seizes Helmerich & Payne Rigs

Instant Max AI

(TulsaWorld, Rod Walton, 2.Jul.2010) – The action comes amid a payment dispute in which the company left the equipment idle.

Helmerich & Payne’s 52-year business relationship with Venezuela came to at least a temporary end Thursday as President Hugo Chavez’s government seized 11 rigs owned by the Tulsa contract drilling company.

The conventional drilling rigs have been idle since last year because Petroleos de Venezuela SA, the national oil company, has not paid Helmerich & Payne Inc. for work, H&P has said.

The company says PDVSA owes it about $43 million. The amount owed once exceeded $100 million.

Venezuela had threatened to seize the rigs since last week, saying that “forced acquisition” was necessary because Helmerich & Payne would not put the equipment back to work.

H&P’s “long-lived” assets in Venezuela are valued at about $67 million, the company’s spokesman Mike Drickamer said in an e-mailed response to the Tulsa World.

The seized rigs make up all of H&P’s equipment in Venezuela.

CEO Hans Helmerich and other company executives initially downplayed the impasse, saying they simply wanted to be paid for past work. Venezuela’s National Assembly and Chavez followed through with the threat by issuing an official decree earlier this week.

Venezuela has been a financial thorn in the side of several companies in recent years.

Williams Cos. Inc. of Tulsa, a natural gas producer, lost two joint-venture compression plants to seizure last year and also was forced to take a $241 million write-down on its books because of nonpayment.

ConocoPhillips, the integrated oil giant with significant offices in Bartlesville, lost multibillion-dollar joint venture projects to seizure by PDVSA. The Houston company later sought international arbitration over the compensation offered by Venezuela.

Citgo, a Houston marketing and retail company once based in Tulsa, is the U.S. wing of the Venezuelan state oil industry.

Helmerich & Payne had no further comment.

***

Previous post Paraguaná Wind Farm In Venezuela Operational In 2011
Next post Galp Energia Inks E&P Deal In Uruguay

Leave a Reply

Your email address will not be published.