Venezuela seizes gas compression plants, faces union unrest

LOS ANGELES, June 5 -- Venezuela’s President Hugo Chavez said state-owned Petroleos de Venezuela SA (PDVSA) is continuing to nationalize oil field service companies in the country, with Houston-based Exterran confirming its facilities as the latest seizure.

“We continue advancing, recovering the control, property and management of all these plants and compression units. Nobody will stop us in this," said Chavez, adding, "We have a timetable to take control of the production plants in the Orinoco belt."

PDVSA Chief Executive Pedro Coronil added to Chavez’s words, saying, "With the takeover of five more plants in the eastern region that produce about 224 MMcfd of gas and 35,000 b/d of oil, we are continuing the plan to renationalize activities connected with compression of gas."

In May, the Venezuelan government enacted a law that reserves to Venezuela certain assets and services related to hydrocarbon primary activities. Under the law, reserved activities are to be performed by PDVSA or its affiliates, or through mixed companies under the control of PDVSA or its affiliates.

Exterran confirmed the seizure of its facilities, saying that “on June 2, 2009, Petroleos de Venezuela SA, or PDVSA, commenced taking possession of our assets and operations in a number of our locations in Venezuela.”

Enterran said, “We cannot predict whether the Ministry of People's Power for Energy and Petroleum will name us in a resolution within the reserved activities, nor can we predict the amount of our assets and operations that PDVSA or its affiliates will seize.”

For the year ended Dec. 31, 2008, Exterran said its operations in Venezuela accounted for $159.7 million, or 5%, of the firm’s revenue and $84.2 million, or 8%, of its gross margin. The seizure included Exterran offices and five compression plants in Monagas state, Eastern Venezuela.

According to PDVSA, the seizure will significantly reduce its costs with Exterran, which were estimated at $210,000/month for rent, operations and maintenance.

So far, PDVSA said that 45% of all private oilfield service companies—about 76 firms—have been taken over since nationalization began 2 weeks ago.

Meanwhile, Venezuela’s national assembly is reading a proposed law to put all petrochemical activity under state control, which could affect Japanese and US companies and add to the growing list of oil sector companies already in government hands.

Under the proposed petrochemical law, joint ventures with the private sector will be permitted only as long as the Venezuelan state has the controlling share.

It was not immediately clear which companies stand to be affected by the planned law, which is due to go to a second reading next week and is likely to be passed by the assembly, which is controlled by the Chavez government.

Japan's Matsui & Co has a 15% stake in the Propilven chemical complex in Zulia state, while US chemical maker FMC Corp. has a stake in the Tripoliven plant. US chemical company Koch Industries part-owns Fertinitro, a fertilizer plant in Venezuela.

Meanwhile, Chavez, responding to concerns of union officials and oil workers, said PDVSA will employ all 8,000 workers from the more than 70 oil service contractors that the government nationalized last month.

According to Chavez, 668 workers have been transferred to the PDVSA payroll since May 8 when the government took over 76 oil services companies working in the Lake Maracaibo region of the western state of Zulia.

"Between [June 8 and June 9], 600 more (workers) will be absorbed (into PDVSA) and, going forward, 1,000 workers (weekly), until reaching the 8,000 who had been outsourced, slaves," Chavez said on June 3 during a Cabinet meeting broadcast over national television.

The workers joining PDVSA will enjoy "social security and dignified jobs, so they can help build socialism," said the president in an effort to stave off union dissatisfaction.

Union official Rafael Zambrano stepped up the criticism, however, saying that his organization had information showing that "only 2,500 workers" from the nationalized firms in the Lake Maracaibo region would be added to the PDVSA payroll.

Since last week, oil workers have gathered on the Lake Maracaibo piers to protest the nationalization of the oil services firms operating in the region—a point that raised the ire of government officials.

Oil Minister Rafael Ramirez blamed fugitive opposition politician Manuel Rosales for attempts to cause "chaos” and vowed that the Venezuelan government “will not allow this region to become chaotic.”

Union leader German Cortez disputed the minister’s view, saying, "This is not a problem of political parties, this is an economic and labor problem.”

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Estill named chief executive officer of Madagascar Oil

01/23/2015

Madagascar Oil Ltd. has appointed Robert Estill as chief executive officer.

Pengrowth cuts capital spending due to declining oil prices

01/23/2015 The recent “rapid” decline in world oil prices is the main reason given by Pengrowth Energy Corp., Calgary, for setting its 2015 capital budget at ...

E&Y: Oil-price collapse to boost global M&A activity in 2015

01/22/2015 The oil-price collapse will facilitate increased global transaction activity in 2015 as companies revise and implement new strategies, according to...

Western Canada due output, spending cuts

01/22/2015 The Canadian Association of Petroleum Producers has cut its expectations for oil-production growth and said it expects sharply lower capital spendi...

Kinder Morgan to acquire Hiland Partners for $3 billion

01/22/2015 Kinder Morgan Inc. (KMI) has agreed to acquire Hiland Partners from founder Harold Hamm and certain Hamm family trusts for $3 billion, including th...

Treasury’s Lew lists oil, gas producers as prime tax-reform target

01/21/2015 US Sec. of the Treasury Jack Lew signaled the Obama administration’s fresh intention to seek repeal of federal tax provisions US oil and gas produc...

BHP to reduce US onshore rigs by 40% by July

01/21/2015

Australia’s BHP Billiton will reduce its US onshore rig presence from 26 to 16 by July in response to lower oil prices.

Gorgon LNG project signs LNG supply deal with SK Group

01/21/2015 The Chevron Australia-led Gorgon LNG project offshore Western Australia has signed a binding sales and purchase agreement to supply 4.15 million to...

Norway offers 54 licenses in APA 2014, announces licensing round

01/20/2015 Statoil ASA, Lundin Petroleum AB, and E.On E&P Norge AS headlined Norway’s Awards in Predefined Areas 2014 (APA 2014) licensing round for the N...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected