...and Chavez is getting more trouble on his plate.

It does not feel much now because of production cuts but it will be noticeable in the long run specially if these companies pull the rigs out.

Helmerich & Payne shutting down rigs on PDVSA debts
from: Business News Americas
Wednesday, February 04, 2009

Helmerich & Payne (NYSE: HP) is ceasing operations on rigs it operates in Venezuela as drilling contracts expire, the company said in a statement.

All 11 of the company's rigs in Venezuela had been active, but payments from Venezuela's state oil company PDVSA have slowed over the last few months, the company said, adding the receivable balance from PDVSA is approaching US$100mn.

Two Helmerich & Payne rigs have now ceased operations and another five rigs should be idle by the end of February.

Without any improvement in receivable collections, the remaining rigs could become idle by the end of July, the company said.

"We're hopeful we can get the operations back to normal," a company executive said in a conference call with analysts. "We are going to do our best to continue or relationship with PDVSA."

"We expect to get paid and resolve this situation. These rigs are well suited for Venezuela. They represent about 6% of the company's revenue. I don't want to minimize it, but we've already reduced our exposure in Venezuela," the official continued when asked if the company may move the rigs out of Venezuela.

The official said PDVSA has not indicated it would try and take over the rigs.

PDVSA earlier in the week seized a drilling rig belonging to Texas-based drilling service company Ensco International (NYSE: ESV) after the latter company suspended operations because of back PDVSA payments.

The Ensco-69 rig had been working in the Gulf of Paria for the PDVSA-controlled JV Petrosucre.

Ensco confirmed that PDVSA owed it US$35.5mn.

Local press in Venezuela has suggested state firms including PDVSA could owe more than US$7bn to service companies that operate in the country. The country has seen its oil export revenues plummet after oil fell to around US$40/b after hitting highs around US$140/b last yeart of Venezuela.