Seizure: at Maracaibo
Wood Group eyes Venezuela pay-out
UK-based oil services company John Wood Group said it was in a strong position to demand compensation after the Venezuelan government seized control of its operations in the country.
Venezuelan soldiers yesterday took control of boatyards and other assets belonging to oil service companies in the latest step by socialist President Hugo Chavez to tighten his grip on the industry.
Wood Group has a 49.5% interest in Simco, which has a 16-year, $800 million contract to manage water injection at state oil company PDVSA's oilfields at Lake Marcaibo.
Like other oil services companies, Simco has not recently been paid for its work, after the collapse in oil prices slashed PDVSA's revenues.
"The contract has been taken over by PDVSA following the consortium submitting a notice of default due to non-payment and other contractual disputes," a spokeswoman for Wood Group told Reuters.
"We should be in a strong contractual position to recover money which is due," she added.
The contract is not material to the company and will not affect 2009 trading, the spokeswoman said.