Venezuela's President Hugo Chávez sent troops to seize companies that service the oil industry May 8. "This is a revolutionary offensive," he told workers near Lake Maracaibo, Venezuela's main oil area. Military vehicles were used as the state oil company PDVSA seized supply boats and two US-owned facilities. The move, taken a day after a measure was approved by Venezuela's Congress, places hundreds of boats, several ports and an estimated 8,000 workers under state control.

The service companies are owed billions of dollars by PDVSA, which has recently clashed with foreign and local service providers over the prices they charge. One of the targeted companies is the SIMCO consortium, which has worked injecting water into oil fields in the Maracaibo area for the past 10 years.

"SIMCO consortium disappears today," Chávez said in a televised speech from a harbor in Lake Maracaibo, where he oversaw the seizure of 300 boats, docks and other assets belonging to oil contractors. "Now, it belongs to PDVSA."

Wood Group, which is a 49.5% partner in the consortium, said in an e-mailed statement from its Houston offices that PDVSA took over its operations earlier this year "following the consortium submitting a notice of default due to nonpayment and other contractual disputes."

Oil Minister Rafael Ramírez said the law could also affect U.S. natural gas processor and distributor Williams Companies Inc., based in Tulsa, Okla. Williams Cos. said in a statement that the Venezuelan government has seized two of its gas compression facilities in eastern Venezuela. In April, the company said it would write off $241 million related to unpaid fees from PDVSA. But company spokeswoman Julie Gentz told the Associated Press: "We pursue all of our available options, including negotiating with PDVSA." (BBC News, BBC World Service, May 9; AP, May 8)

See our last post on Venezuela.

Please leave a tip or answer the Exit Poll.