UPDATE 2-Venezuela to nationalize U.S. firm’s oil rigs

* Rigs were idled for months in PDVSA payments dispute

* Minister said idled rigs opposition ploy against Chavez

* Socialist government has nationalized many industries

* Giants Halliburton and Schlumberger also in Venezuela
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By Frank Jack Daniel

CARACAS, June 23 (BestGrowthStock) – Venezuela will nationalize a
fleet of oil rigs belonging to U.S. company Helmerich and Payne
(HP.N: ), the latest takeover in a push to socialism as President
Hugo Chavez struggles with lower oil output and a recession.

A former soldier inspired by Cuba’s Fidel Castro, Chavez
has made energy nationalization the linchpin in his
‘revolution’. He has also taken over assets in
telecommunications, power, steel and banking.

The 11 drilling rigs have been idled for months following a
dispute over pending payments by the OPEC member’s state oil
company PDVSA. Oil Minister Rafael Ramirez said on Wednesday
the rigs, the Oklahoma-based company’s entire Venezuelan fleet,
were being nationalized to bring them back into production.

Ramirez said companies that refused to put their rigs into
production were part of a plan to weaken Chavez’s government,

“There is a group of drill owners that has refused to
discuss tariffs and services with PDVSA and have preferred to
keep this equipment stored for a year,” Ramirez told reporters
in the oil producing state of Zulia. “That is the specific case
with U.S. multinational Helmerich and Payne.”

The company was not immediately available for comment.

Chavez, who faces legislative elections in September, often
pushes ahead with radical plans during election campaigns.

The 55-year-old leader is having a hard time in his 11th
year in power. Venezuela’s economy is the worst performing in
Latin America this year, a problem exacerbated by a drop in oil
output since 2008, power outages and soaring inflation.

NO SURPRISE

The takeover of Helmerich and Payne’s rigs was not a
surprise, considering Chavez penchant for nationalizations and
the company’s refusal to work before being paid the $49 million
it has invoiced PDVSA.

Helmerich and Payne is a small player in the drilling
industry, but global giants like Halliburton (HAL.N: ),
Schlumberger (SLB.N: ) and Baker Hughes (BHI.N: ) also have a
presence in Venezuela.

Halliburton and Schlumberger have avoided public spats with
the government.

Chavez has kept pressure up on the private sector in recent
months, blaming a “parasitic bourgeoisie” for Venezuela’s
recession and 30 percent annualized inflation,

He has threatened to nationalize Polar, the top brewer and
food processor in the country of 30 million. The government has
also seized a bank belonging to an owner of the leading
opposition TV station and put an arrest warrant out for his
partner, who is now on the run.

Chavez in 2007 nationalized multi-billion dollar projects
in Venezuela’s vast Orinoco oil region, persuading companies
such as BP Plc (BP.L: ), to accept minority stakes in facilities
they had built.

Last year he ordered the takeover of dozens of smaller oil
service companies as PDVSA, reeling from a sharp plunge in oil
prices, struggled to pay contractors.

When he was flush with oil cash during a boom in oil prices
that ended in 2008, Chavez often compensated nationalized
companies fairly, although the 2007 takeovers led to lawsuits
from ConocoPhillips (COP.N: ) and Exxon Mobil (XOM.N: ).

More recently Venezuela has been slower in paying
compensation.

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(Reporting by Patricia Rondon, editing by Jackie Frank)

UPDATE 2-Venezuela to nationalize U.S. firm’s oil rigs