Lake Maracaibo: Venezuela
Two projects seized from Williams
Venezuela has seized a large oil project from US-based Williams Companies along with assets belonging to other companies, in the latest step by President Hugo Chavez to tighten his grip on the industry.
Williams confirmed today that two high-pressure compression projects - El Furrial and PIGAP II - were seized by the Venezuelan government.
A third asset, Accroven, a natural gas liquid extraction and processing project, is still under Williams' control.
"We are going to pursue all available options, including continuing to negotiate with PDVSA," said Julie Gentz, spokeswoman with Williams.
Scotland-based John Wood Group, which is a 49.5% partner in a consortium carrying out water injection support activities for PDVSA in Lake Maracaibo, said the contract had been taken over by the Venezuelan oil company.
PDVSA started taking control of Williams' gas injection operations in the west of the country late yesterday, said an official at the company who asked not to be named.
"PDVSA started taking operative control last night," said the official. Williams' US headquarters said they did not have an immediate response.
Oil Minister Rafael Ramirez said yesterday that PDVSA was preparing to take control of a gas injection project run by a North American company, said a Reuters report.
Venezuelan soldiers also seized control of boat yards and other key assets in Lake Maracaibo, including the port’s leading tug operators.
Ramirez said the move would see 8000 workers incorporated into the ranks of PDVSA and save the company $700 million per year.
“There are sectors that are indispensable to guarantee oil production in our country, that have been identified by the law, for example in Lake Maracaibo, if we do not have control of the launches and the crew boats there is no way that we can produce oil in the lake,” he said.
PDVSA is beginning the process of taking control of assets and operations from 60 oilfield services companies.
The government could seize up to 300 supply boats and launches, 30 tugs, 30 barges, 61 diving boats, five floating drydocks, 13 workshops and 39 terminals and docks used by the oil industry on Lake Maracaibo, lawyers warned.
Venezuela’s largest towage operators, Zulia Towing, Terminales Maracaibo Maritime Services and Marine Services — owed millions in unpaid services by PDVSA — are likely to the first affected by the measures, said Jose Sabatino, partner at Venezuelan law company Sabatino Pizzolante.
Oil contractors including Halliburton, Schlumberger, Baker Hughes, John Wood Group, Helmerich & Payne are also likely to be hit by the latest measures, said a Lloyd’s List report.
They are all owed millions of dollars in unpaid debts since the oil price collapsed in September last year.
It will directly affect natural gas producer Williams Companies, which runs a key facility that boosts output of some of Venezuela's most valuable crude and which last month took a $241 million charge for PDVSA nonpayment, said a Reuters report.
PDVSA cut its investment plan for this year to $14 billion from a previously planned $24 billion at the end of April, and in February, Ramirez said the company had asked service providers to cut their fees by 40% after the price of oil plunged.