Venezuela May Create Private Oil Drilling Company, Envoy Says

Venezuela May Create Private Oil Drilling Company, Envoy Says

Venezuela, which this week announced plans to nationalize 18 oil rigs operated by international companies, wants to establish a Latin American oil and gas drilling corporation.

Such a company would give Petroleos de Venezuela and other Central and South American oil companies an alternative to North American rig operators, seismic providers and service firms, Bernardo Alvarez, Venezuela’s ambassador to the U.S., said today in Chicago.

The driller probably would be privately held rather than government owned, Alvarez said. No other details were provided. Venezuela needs 42 rigs during the next several years to proceed with planned exploration work, he said.

“Now there is a lack of engineering and you can’t find rigs,” Alvarez said after delivering a speech to a University of Chicago petroleum conference. “So we will create a Latin American company of oil services. It should be private. It doesn’t have to be public.”

Venezuela, the third-biggest foreign supplier of oil and gasoline to the U.S., has taken bigger stakes in oil fields formerly operated by companies including Chevron Corp. and Exxon Mobil Corp.

The seizures are part of President Hugo Chavez’s effort to increase government control of the country’s energy assets, said Alvarez, who was Venezuela’s vice minister of hydrocarbons from 2000 to 2003.

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