Venezuela Tries to Attract More Oil Rigs, Halt Departures

Faced with a declining rig fleet in a tight global market for oil services, Venezuela is preparing a fresh licensing round to attract new drilling equipment and renew contracts for those on the ground, industry executives say.

But Petroleos de Venezuela S.A. (PVZ.YY) is increasingly slow about paying its contractors and insists on paying in a local currency that is difficult to convert into dollars, dampening interest in projects with the state oil firm.


PdVSA is still looking to hire a rig for the offshore Mariscal Sucre gas project, where the company first hoped to start drilling in mid-2006. Meantime, foreign operators are neck-deep in a contract overhaul, delaying some work at privately run fields until at least the second half of the year.

Contrary to PdVSA’s intentions, industry watchers expect drilling activity to slow down this year, denting the country’s production capacity at a time of rising costs at the state firm.

Dow Jones Newswires