Venezuela seizes US-owned oil rigs

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**Seaward**

Our socialist brothers continue to show those gringo capitalist pig-dogs what for!

Venezuela has quietly seized control of two oil rigs owned by a unit of Houston-based Superior Energy Services after the company shut them down because the state oil monopoly was months behind on payments.

The seizure took place Thursday after a judge in the state of Anzoategui, accompanied by four members of the local police and national guard, entered a Superior depot and ordered it to hand over control of two specialized rigs to an affiliate of PDVSA, the state-owned oil producer.

PDVSA justified the equipment’s expropriation, calling it essential to the South American nation’s development and welfare, according to a court order obtained by The Associated Press. Company workers were instructed to load the rigs, known as snubbing units and used to repair damaged casing, onto trucks to be deployed at “critical wells” elsewhere, according to the document.

“It was like a thief breaking into your house, asking for the keys to the safe and then expecting you to help carry it away,” Jesus Centeno, local operations manager for Superior in the city of Anaco, said by phone. “Their argument was that we were practically sabotaging national production.”

While the late President Hugo Chavez liked to grandstand on national television, ordering troops to seize everything from supermarkets to foreign-owned oil companies, his hand-picked successor, Nicolas Maduro, has avoided any additional expropriations six months into his rule.

Instead, even while attacking the country’s business elite for allegedly hoarding toilet paper and other basic goods as part of an “economic war,” he’s insisted Venezuela is open for investment and is seeking to boost production of oil that accounts for 95 percent of exports.

Neither Maduro nor any government official has publicly commented on the seizure of the U.S.-owned rigs. A spokesman for PDVSA in Caracas declined to comment, saying he was unaware of the case.

Oil companies are weary of working with PDVSA, which has accumulated huge debts to service contractors on whom it depends to develop the world’s largest proven oil reserves.

Full article here.

**Ahtman**

The title seems a bit misleading, the rigs weren't owned by the US, but a US based company. I'd be pissed if I were Superior Energy Services too, but saying they seized US rigs and they seized Superior Energy Services rigs isn't the same statement.

**Seaward**

Ahtman wrote:
The title seems a bit misleading, the rigs weren't owned by the US, but a US based company. I'd be pissed if I were Superior Energy Services too, but saying they seized US rigs and they seized Superior Energy Services rigs isn't the same statement.

The Washington Post's title is "Venezuela seizes US-owned oil rigs in dispute over unpaid bills".

It's a bit like claiming something is American-made; the government didn't make it, an American company did.

**Ahtman**

Seaward wrote:
Ahtman wrote:
The title seems a bit misleading, the rigs weren't owned by the US, but a US based company. I'd be pissed if I were Superior Energy Services too, but saying they seized US rigs and they seized Superior Energy Services rigs isn't the same statement.

The Washington Post's title is "Venezuela seizes US-owned oil rigs in dispute over unpaid bills".

It's a bit like claiming something is American-made; the government didn't make it, an American company did.

Except they don't say "American-made", they say "Made in America", which just tells country of origin. The Washington Post's title is a lot more accurate, and seems less designed to mislead.

**Seaward**

Ahtman wrote:
Except they don't say "American-made", they say "Made in America", which just tells country of origin. The Washington Post's title is a lot more accurate, and seems less designed to mislead.

You don't think the WP's title makes it sound as though the US owns the oil rigs? Very well. Title changed.

Though humor me and do a Google search for "American-made," if you don't believe that phrase is ever used in reference to products.

**Ahtman**

Seaward wrote:
You don't think the WP's title makes it sound as though the US owns the oil rigs? Very well. Title changed.

No, the WP title specifically says they are US owned, yours is the one that is muddled, not theirs. This isn't really a shock though. And you haven't changed the title as of this writing.

Theirs: Venezuela seizes US-owned oil rigs in dispute over unpaid bills

Yours: Venezuela seizes US oil rigs.

Both are somewhat problematic as it seems like the rigs are own by the country and not a company within, but theirs was less misleading. It probably should have said "Venezuela seizes US owned companies oil rigs".

Seaward wrote:
Though humor me and do a Google search for "American-made," if you don't believe that phrase is ever used in reference to products.

If you Google 'American Made' 90% of the results are for 'Made in America', as it is by far the more common way of saying something was produced in the United States.

**Seaward**

Ahtman wrote:
No, the WP title specifically says they are US owned, yours is the one that is muddled, not theirs. This isn't really a shock though. And you haven't changed the title as of this writing.

Try hitting refresh.

Theirs: Venezuela seizes US-owned oil rigs in dispute over unpaid bills

Yours: Venezuela seizes US oil rigs.

If you genuinely believe there's a significant difference between "US" and "US-owned," you're going to have some issues on the verbal portion of the SATs.

Regardless, you got the title changed. Well done.

**djones520**

The things that are nit-picked here are just ridiculous sometimes. Lets ignore the fact that another nation is seizing assets of US companies. We need to point out how the title is worded. That's what is important damnit!

**Ahtman**

So you can't understand the difference between one country seizing another country's assets and a country seizing a private company's assets, or why that difference may be important?

**djones520**

Ahtman wrote:
So you can't understand the difference between one country seizing another country's assets and a country seizing a private company's assets, or why that difference may be important?

I think anyone who had bothered to read the story would have had no difficulty understanding it, considering it makes it very clear in the 1st sentence.

**Ahtman**

djones520 wrote:
Lets ignore the fact that another nation is seizing assets of US companies.

Apparently what we are ignoring is what people say. I already said the company should be pissed, I just think the story is being presented as something that it isn't, even if the difference is slight.

**Seaward**

Ahtman wrote:
So you can't understand the difference between one country seizing another country's assets and a country seizing a private company's assets, or why that difference may be important?

I can.

My point is that "US" and "US-owned" mean the exact same thing, unless you'd care to point out the difference.

Either way, I take it you have no opinion on Venezuela seizing US-owned assets.

**azazel the cat**

djones520 wrote:
Ahtman wrote:
So you can't understand the difference between one country seizing another country's assets and a country seizing a private company's assets, or why that difference may be important?

I think anyone who had bothered to read the story would have had no difficulty understanding it, considering it makes it very clear in the 1st sentence.

I think that I would not have bothered reading the story at all, had the title been accurate.

And that is exactly the point of the misleading title.

**feeder**

So? Pay your debts, or the repo man shows up. That's what happens with your TV, now your oil rigs, too.

**djones520**

feeder wrote:
So? Pay your debts, or the repo man shows up. That's what happens with your TV, now your oil rigs, too.

That's not how I read this. Venezuala stopped paying the company, so the company shut the rigs down, and Venezuala "repo'd" the rigs. It's a case where the guy who stopped paying the bill did the repo'ing.

**feeder**

Oh, I thought 'state oil' was referring to the US company.

Well then, this is just silly.

**Kovnik Obama**

djones520 wrote:
feeder wrote:
So? Pay your debts, or the repo man shows up. That's what happens with your TV, now your oil rigs, too.

That's not how I read this. Venezuala stopped paying the company, so the company shut the rigs down, and Venezuala "repo'd" the rigs. It's a case where the guy who stopped paying the bill did the repo'ing.

It's a case where the possession and explotation of mineral and oil ressources are constitutionally reserved to the State. The company accepted this 'seizure' when it left, or else was the only one at fault for not figuring out this was going to happen.

**Ouze**

edit: got ninja'd

**Jihadin**

A Falkland Conspiracy type notion to push the US into war.....

**Seaward**

Kovnik Obama wrote:
It's a case where the possession and explotation of mineral and oil ressources are constitutionally reserved to the State. The company accepted this 'seizure' when it left, or else was the only one at fault for not figuring out this was going to happen.

Just like a mugging victim 'accepts' the transfer of wealth when he or she hands over her wallet and vacates the scene at gunpoint.

**Do_I_Not_Like_That**

Jihadin wrote:
A Falkland Conspiracy type notion to push the US into war.....

There was no conspiracy about the Falklands - Argentina wanted it so they invaded!

**Tibbsy**

Do_I_Not_Like_That wrote:
Jihadin wrote:
A Falkland Conspiracy type notion to push the US into war.....

There was no conspiracy about the Falklands - Argentina wanted it so they invaded!

And got their arses whooped all the way back to the mainland!

**kronk**

Let's fething bomb them and gak.

**Grey Templar**

kronk wrote:
Let's fething bomb them and gak.

Aren't you a little too busy repopulating the Earth?

**SilverMK2**

I am kind of surprised the US hasn't already invaded. I mean they have oil!

Do they actually have WMD's or something?

**kronk**

Yes. Bomb them now. By the time I'm done in the Far East and Europe, I'll help their numbers back up.

I'm only one man, after all.

**Grey Templar**

SilverMK2 wrote:
I am kind of surprised the US hasn't already invaded. I mean they have oil!

Do they actually have WMD's or something?

Worse, they have Ponchos.

**sebster**

In terms of the US, this is pretty much no big deal. US companies have investments spread across the globe, and so this won't even register as a blip in its economic activity. I mean, it sucks for shareholders in Superior Energy services, obviously, but the risk of nationalisation is part of the cost of doing business in dodgy countries.

But in terms of Venezuala this is just terrible policy. They need overseas expertise and capital investment, and well, now the risk of nationalisation is that much higher, meaning many more companies will be unwilling to invest, and those that do will charge a much higher price to cover the risk.

**Dreadclaw69**

sebster wrote:
But in terms of Venezuala this is just terrible policy. They need overseas expertise and capital investment, and well, now the risk of nationalisation is that much higher, meaning many more companies will be unwilling to invest, and those that do will charge a much higher price to cover the risk.

I agree completely. Actions such as this while courting popular sentiment are extremely short term. It acts as a barrier to future investment from other sources. For any outside company operating in Latin America the actions of Venezuela should not be surprising given the often less than cordial relations between the two countries. Just look at Argentina's example from last year;
http://www.cnn.com/2012/04/17/world/americas/argentina-ypf-repsol/

Buenos Aires, Argentina (CNN) -- The Argentine government's decision to reclaim what was once its state-owned oil company through expropriation is straining diplomatic relations with Spain, where the news was met with objections.
The Spanish energy company Repsol purchased Argentina's oil and gas company, YPF, in 1999 during a period of privatization.
But Argentine President Cristina Fernandez de Kirchner announced this week a government plan to take YPF back through legislation that would expropriate a 51% share of the company. Through a decree, Fernandez immediately placed the leadership of YPF in the hands of Julio De Vido, the country's minister of planning and public investment.
The Senate began debating the proposed law Tuesday.
Fernandez argued that such a move is necessary for the sake of Argentina's sovereignty over its natural resources.
Spanish Foreign Minister Jose Manuel Garcia Margallo criticized the announcement.
"The government strenuously condemns the arbitrary decision by the Argentine government," he said, adding that it "breaks the climate of cordiality and friendship that traditionally have marked relations between Argentina and Spain."
Furthermore, the expropriation breaks a verbal agreement between the two governments from February about the future of YPF, he said.
During her announcement, Fernandez said Argentina had to act to reclaim a state oil company because it is the only country in Latin America "that does not manage its natural resources."
In 2011, for the first time in 17 years, Argentina became a net importer of natural gas and oil, she said.
"To continue with this policy of emptying and not investment, Argentina would become a non-viable country because of business policies and not because of lack of resources," Fernandez said.
The loss of YPF would be an important loss for Repsol. YPF accounts for about 25% of its profits and 60% of its production.
Repsol's president, Antonio Brufau, said his company is considering legal action against Argentina, seeking compensation of about $10 billion.
"I have to say that unfortunately, the president of Argentina yesterday carried out an absolutely illegitimate and unjustifiable act from a legal perspective," Brufau said.
Fernandez, who has recently stirred nationalistic sentiments by rekindling a feud with Britain over the Falklands, has found some support at home.
The government should use any tool at its disposal to be able to manage its natural resources, the Strategic Center for Argentine Growth and Development said in a statement.
The organization "recognizes that natural energy resources, especially the non-renewable ones, are indispensable to carry forward any plan for growth, development and industrialization of a country."
The group's president, Mauro Gonzalez, said, "The sovereignty of a country doesn't only involve the protection of its geographic limits but also its non-renewable natural resources."

**Frazzled**

sebster wrote:
In terms of the US, this is pretty much no big deal. US companies have investments spread across the globe, and so this won't even register as a blip in its economic activity. I mean, it sucks for shareholders in Superior Energy services, obviously, but the risk of nationalisation is part of the cost of doing business in dodgy countries.

But in terms of Venezuala this is just terrible policy. They need overseas expertise and capital investment, and well, now the risk of nationalisation is that much higher, meaning many more companies will be unwilling to invest, and those that do will charge a much higher price to cover the risk.

Those wacky Venezuelans! Clearly if you want to do there business there not only should you get paid in good Chinese cash, but you should make them post a bond for 4x the value of any equipment you bring there. PDVSA can kiss their development efforts goodbye without OFS companies.