Helmerich & Payne halts operations over delayed PDVSA payments
International Herald Tribune: US oil driller Helmerich & Payne said it is continuing to halt operations in Venezuela due to delayed payments from Venezuela's state oil company. Two of the company's 11 rigs active during the first fiscal quarter have stopped work since January because state oil company Petroleos de Venezuela (PDVSA) has paid less than 1% of its outstanding debts, Juan Pablo Tardio, Director of Investor Relations for the Tulsa, Oklahoma-based company, confirmed to the Associated Press by telephone. Two other rigs halted operations in January for the same reason. There has been "little progress in terms of receivable collections from PDVSA," the company said in a statement.
Helmerich & Payne announced in January that it was halting operations on two of its drilling rigs, because PDVSA owed the company close to US$100 million. It said it would halt the rest of its rigs by the end of July as contracts expired unless PDVSA began to make good on its debts.
Helmerich & Payne is not the only oil services company to have complained about a backlog in payments. Ensco International Inc., based in Dallas, Texas, said January that it had suspended oil drilling operations off Venezuela's Caribbean coast because Venezuela owed it $35 million -- prompting PDVSA to take over the company's operations.
Venezuela Oil Minister Rafael Ramirez said earlier this month that the government was slashing by 50% the amount it spends on oil industry contractors because of low crude prices. Venezuela relies on oil for 93% of exports and nearly half the government's budget, but prices for Venezuela's heavy oil basket have plummeted more 66% from last July's average price of $129.54 a barrel -- to an average $43.51 last week. Ramirez also warned contractors against trying to halt work to demand payment, saying if they do, "we're going to take over those rigs like we already did with Ensco."
Ramirez said that PDVSA has recently paid off debts to 94% of its more than 5,700 service contractors, but is still in negotiations with 56 service companies -- to which it owes a yet-to-be negotiated amount in backlogged payments. "There's a group of transnational companies with whom we're discussing problems," Ramirez said without mentioning names.
Read more: http://www.iht.com/articles/ap/2009/
03/26/business/LT-Venezuela-Oil-Rigs.php
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