Venezuela's oil minister said Thursday that drilling operations are running smoothly as Petroleos de Venezuela SA (PVZ.YY) takes control of a group of rigs it had previously farmed out to private contractors.

"All operations, all of our rigs are operating normally," said Rafael Ramirez, who is also the president of PdVSA, in a television interview.

Ramirez denied media reports that rig operators are resisting the change in management as PdVSA starts operating 46 of its rigs that it had put under private management. PdVSA says that the staffers working on these rigs will become part of its payroll.

Venezuela's overall oil production has suffered a steady decline in recent years as the company has diverted funds to social programs and invested less on exploration and production. PdVSA claims to be producing over 3 million barrels a day, while most independent estimates put the figure at around 2.4 million barrels a day.

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