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

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors


Emerson Micro Motion Videos

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