the best bargaining chip for crystallex is having kept the ready to go equipment out of the reach of Chavez "taking over " fingers as done with ENSCO although they are owed lot of money.

Petrosucre assumes control of ENSCO 69

Offshore staff

DALLAS -- Petrosucre, a subsidiary of the Venezuelan national oil company PDVSA, has assumed control of drilling operations on the jackup ENSCO 69 in Venezuela in an ongoing dispute over Petrosucre's non-payment of past due invoices under a drilling contract for the rig.

When Petrosucre failed to honor commitments to pay past due amounts, Ensco suspended drilling operations upon completion of the well in progress pending payment of past due amounts. Petrosucre resumed drilling operations under observation by Ensco supervisory rig personnel, with Petrosucre employees and some of the Venezuelan rig crews that were used by Ensco.

Petrosucre has advised Ensco that it temporarily is taking over operations on the rig and that Ensco is free to terminate the contract and remove the rig. Senior representatives of Ensco and Petrosucre currently are engaged in discussions and exchanging correspondence regarding their respective contractual rights and obligations.

ENSCO 69 began its current contract with Petrosucre in August 2008. The contract calls for a two-year term at a day rate in the mid-$180,000 range. Currently, the total receivable balance is approximately $35.5 million. The rig is insured for $65 million.

01/28/2009

Ensco says Venezuela owes $35 million for drilling

CARACAS, Venezuela (AP) - Ensco International Inc. said Wednesday that it suspended oil drilling operations off Venezuela's Caribbean coast because the South American nation owes the U.S.-based company over $35 million for its services.

Dan Rabun, president and CEO of Ensco, said the company is eager to settle the disagreement that led Venezuela's state oil company, PDVSA, to take control of one of its oil rigs and accuse the Dallas, Texas-based oil services firm of abandoning operations.

Petrosucre, a joint venture between PDVSA and Italy's Eni, is now operating the rig known as Ensco 69.

"We remain committed to providing the same standard of safe and reliable services to PDVSA as we have in the past, and we are hopeful that the situation involving ENSCO 69 soon can be resolved to the mutual satisfaction of Petrosucre and Ensco," Rabun said in a statement.

Of Ensco's 46-rig fleet, Ensco 69 is the only one operating in Venezuela. Ensco said in Wednesday's statement that Petrosucre has informed the company that PDVSA is "temporarily" taking over the rig's operations.

On Tuesday, PDVSA said Ensco had refused to accept certain methods of payment for services that began in December 2008. Petrosucre assumed control on the base of "public use and social interest" to guarantee the rig's continued activity, PDVSA said.

PDVSA is becoming increasingly short of cash due to depressed world oil prices, leading to complaints of unpaid bills from some contractors and service providers.

Prices for light, sweet crude have fallen more than 70 percent since July's record high of over $147.

Eduardo Garmendia, president of the Venezuelan Association of Metal Industries and Mining, told The Associated Press on Wednesday that PDVSA has accumulated multimillion dollar debts with Venezuelan companies that supply the state-run company with valves, pipes and tanks.

PDVSA's debts with local suppliers has reached $69.7 million, Garmendia said.