PDVSA to Manufacture Drilling Rigs in mid-2008

Venezuela's state oil company PDVSA will begin manufacturing drilling rigs in mid-2008 through its new subsidy PDVSA Industrial, PDVSA president and energy and oil minister Rafael Ramirez said in a statement.

"We're going to make our own rigs," Ramirez said, adding 41 rigs were still being operated by private companies in the country at a cost of 50mn bolivares (US$23,300 at the official rate) per rig a day.

"By taking over the rigs, PDVSA will have control of its own reserves and also will cut the cost of rig operations 50% to 25mn bolivares per rig a day," Ramirez said.

China's state oil company CNPC also will start supplying Venezuela with rights at the beginning of October.

A total of 13 rigs, one every two months, will be delivered under a deal signed with CNPC, according to the statement.

PDVSA this year nationalized drilling rigs and admitted difficulties in absorbing the former employees of private rig operators.

PDVSA wants to have 202 rigs operating in the country to reach its 2012 Plan Siembra Petrolera goal of producing 5.8Mb/d.

There are 112 rigs operating in Venezuela.

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