New Law May Cost 22,000 Jobs in Venezuela

Venezuelan President Hugo Chavez
(Click to Enlarge)

According to a report from Dow Jones Newswires, Venezuelan oil unions are claiming the recent governmental seizure of oil service companies could result in a loss of 22,000 jobs in the country.

With the drop in oil prices, Venezuela has fallen behind in payments to international oil service companies working in the country, with some of the companies threatening to stop Venezuelan operations altogether. Then at the behest of President Hugo Chavez, the Venezuelan National Assembly passed a law on May 7 legalizing the state's seizure of oil service companies in the country.

On May 8, President Chavez began to commandeer foreign oil service companies performing water and gas injection to increase recovery from wells.

Approximately 8,000 workers are expected to become Pdvsa employees through this seizure.

"This law does not benefit us," the leader of the Union of Oil Workers in the Venezuelan state of Zulia, Bernardino Chirinios, told El Nacional newspaper. "There are 35,000 workers on the east coast (of the state of Zulia) and only 8,000 will be absorbed. There are 22,000 workers without guarantees."


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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
J.M. | May. 12, 2009
The world is surprised by these kind of announcements, but this is only one small part of things Chavez can and will do. He has more than 6 years doing what he wants to keep as the country's big boss, and any investor has to know it before take any decision to risk money in Venezuela.

Ramoutar Ramsaroop | May. 12, 2009
This is nothing short of terrorism, which the majority of the world abhors. Mr. Chavez should at least have granted the opportunity to the service companies to remove their equipment. He could keep the the money, which will be beneficial to the revolution that will eventually topple his regime.


C.J. | May. 12, 2009
OPEC will bail them out. Now we have to watch who in OPEC gets parts, as they will share with Ven...

He did not have squat until US started developing, how quick they all forget.

Good to shut him down in the rest of the world thru banking and investments.

Jeff | May. 12, 2009

So next time I rent a power washer from Home Depot and pay the rent to use it for the weekend, I can just tell Home Depot that they're not going to get their equipment back because its now in my garage. Huh?

This whole move's a disaster. There is no way that they can continue to produce the volumes that they do today w/o the tech experts from the US. Oh, and where do you think they'll get spare parts now for this equipment? Do you think the companies you just stole billions of dollars of equipment from are going to sell you spare parts?

Barring another large spike in oil prices, by 2011, severe social unrest will occur within Venezuela as this move will only result in lowering the country's revenue. This could be the beginning of Mr Cs downfall....

David Segobia | May. 12, 2009
Not unlike America these days. We also are taking over banks, auto companies, health care, and reneging on oil and gas leases. I see the same end for the U.S.: fewer jobs and less productivity.

Umair Ahmad | May. 12, 2009
I'm a petroleum engineer. I think it's a totally wrong decision. Engineers should protest against it. Otherwise petroleum engineers will lose their jobs.

Richard G. Wieder Sr. | May. 12, 2009
Bad as I hate to say it, Pres. Hugo Chavez has every right to keep the equipment. Now, is he allowed to keep the people who operate the equipment, an astounding NO. He's doing nothing more, not anything less than the Saudis in the late 40s. He's "Nationalizing The Field, And All Equipment," but he's picking a hell of a time for doing it.

I was looking forward to having a friendly diplomatic relationship with Mr. Chavez, but he's well on to ruins with that.

"There's some men ya just can't reach"




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