CARACAS, Venezuela — Venezuela’s state oil company said Tuesday that it has taken control of 90 percent of oil contractors on western Lake Maracaibo as it aims to reduce costs due to falling prices for crude oil.
President Hugo Chavez announced last week that Venezuela is nationalizing 60 oil contractors as his government moves to assert control over the industry under a law approved by the pro-Chavez National Assembly.
Many of the contractors run boats, docks and other facilities on Lake Maracaibo in oil-rich Zulia state, while others process natural gas or inject water into oil fields to help extract crude oil.
State-run Petroleos de Venezuela SA, or PDVSA, has recently clashed with domestic and foreign service providers, falling behind on billions of dollars in payments as it aims to cut costs by 40 percent.
Venezuela’s Energy Ministry says PDVSA’s unpaid invoices jumped 145 percent last year over 2007, to reach $13.9 billion in December.
What the U.S. is doing
The U.S. government is "monitoring the situation” and has been in close contact with companies that could be affected through its embassy in Caracas, U.S. State Department spokesman Noel Clay said Tuesday.
"In the event of expropriation, we expect the Venezuelan government to provide U.S. companies with prompt, adequate and effective compensation in accordance with international law,” Clay said in Washington.
Oil Minister Rafael Ramirez said some contracts negotiated at last year’s soaring crude prices are now overvalued. "We’re not going to pay abusive rates to anybody,” he said Tuesday. Venezuela relies on oil for 93 percent of exports, but has seen world oil prices fall 60 percent since their July peak.
A barrel of light, sweet crude was trading at $58.73 Tuesday.
by the associated press
President Hugo Chavez announced last week that Venezuela is nationalizing 60 oil contractors as his government moves to assert control over the industry under a law approved by the pro-Chavez National Assembly.
Many of the contractors run boats, docks and other facilities on Lake Maracaibo in oil-rich Zulia state, while others process natural gas or inject water into oil fields to help extract crude oil.
State-run Petroleos de Venezuela SA, or PDVSA, has recently clashed with domestic and foreign service providers, falling behind on billions of dollars in payments as it aims to cut costs by 40 percent.
Venezuela’s Energy Ministry says PDVSA’s unpaid invoices jumped 145 percent last year over 2007, to reach $13.9 billion in December.
What the U.S. is doing
The U.S. government is "monitoring the situation” and has been in close contact with companies that could be affected through its embassy in Caracas, U.S. State Department spokesman Noel Clay said Tuesday.
"In the event of expropriation, we expect the Venezuelan government to provide U.S. companies with prompt, adequate and effective compensation in accordance with international law,” Clay said in Washington.
Oil Minister Rafael Ramirez said some contracts negotiated at last year’s soaring crude prices are now overvalued. "We’re not going to pay abusive rates to anybody,” he said Tuesday. Venezuela relies on oil for 93 percent of exports, but has seen world oil prices fall 60 percent since their July peak.
A barrel of light, sweet crude was trading at $58.73 Tuesday.
by the associated press
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