Venezuela's Oil Minister Threatens to Seize Oil Service Cos

Venezuela's Oil Minister, Rafael Ramirez, told PDVSA workers that foreign oil service companies run the risk of being seized if they fail to revise their service rates, reports Dow Jones, citing the transcript of Ramirez's videoconferenced speech last Friday.

Also the president of state-run heavyweight PDVSA, Ramirez said, "To those contractors who stopped work during the 2002 oil strike, we've told them it's time to settle accounts and rates, change our relationship or we will take over those companies."

The workers' strike in 2002 to which Ramirez refers took a toll on the oil industry for two months, collapsing oil production and shutting down operations for numerous contractor firms working in the country.

"We will not pay [the bills] of contractor companies that have pretended to speculate and don't care about our company," Ramirez continued without targeting specific contractors. "To those drill companies: you speculated [with rates] in 2007 and 2008, [and] now we have to reset those rates," he said.

According to Dow Jones, Ramirez is referencing PDVSA's struggle to secure affordable equipment amid lucrative oil prices. In June, however, PDVSA is set to begin construction on its own drilling equipment with China's guidance.

Dow Jones notes that based on industry analysts' estimates, PDVSA owes a lump sum of nearly $1.2 billion to oilfield service giants Halliburton and Schlumberger in unpaid bills.