Venezuela to Keep Up Demands on Oil Rig Companies

CARACAS Sep 5, 2007 (Dow Jones Newswires)

Venezuela has no plans to relax its demands on oil service companies seeking business in Venezuela, even if the country faces a severe oil rig shortage, a PdVSA board member said Tuesday.

"We won't relax absolutely anything in the (oil rig) tenders. We will look for oil rigs everywhere," Luis Vierma, a PdVSA board member and head of exploration and production, told Dow Jones Newswires.

PdVSA will continue to insist on a number of terms from these oil companies, he said, "particularly the clause that demands they devote money to social investments."

The administration of President Hugo Chavez is conducting a 53-rig tender right now and continues to require that service companies operating in Venezuela donate money for social investments, among others requirements.

PdVSA's stiff terms led rig suppliers to desert a recent tender. Vierma and Oil Minister Rafael Ramirez claim foreign companies have orchestrated a "boycott," to make life harder for Chavez's revolution.

PdVSA should have results from the 53-rig tender in a month. These new rigs, according to the director, will allow the company to "maintain and even increase production."

Some foreign service companies already have made some offers, Vierma said, but he offered no details.

PdVSA suffers from an oil rig shortage that recently forced authorities to declare an "operational emergency." The company now expects to have 135 rigs by the end of the year, according to Vierma, but that would fall short of its original 191-rig plan set early in the year.

Copyright (c) 2007 Dow Jones & Company, Inc.


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