MercoPress. South Atlantic News Agency

Venezuela plans to nationalize a fleet of oil rigs from US corporation

President Chavez faces crucial legislative elections next September

Venezuela will nationalize a fleet of oil rigs belonging to US Company Helmerich and Payne, the latest takeover in a push to XXI century Socialism announced President Hugo Chávez as he struggles with lower oil output and a recession.

President Chavez has made energy nationalization the linchpin in his 'Bolivarian revolution' and has also taken over assets in telecommunications, power, steel and banking. He has also advanced in land reform by taking over large farms and rich agricultural land, allegedly belonging to absentee landlords or owners lacking the ‘correct property documents’.

The 11 drilling rigs have been idle for months following a dispute over pending payments by Venezuela’s oil company PDVSA. Oil Minister Rafael Ramirez said the rigs, the Oklahoma-based company's entire Venezuelan fleet, were being nationalized to bring them back into production.

Ramirez said companies that refused to put their rigs into production were part of a plan to weaken Chávez's government,

“There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and have preferred to keep this equipment stored for a year,” Ramirez told reporters in the oil producing state of Zulia. “That is the specific case with US multinational Helmerich and Payne.”

Chávez faces legislative elections in September and for the first time in years have a chance of good showing given the country’s recession and inflation. In such cases Chavez often appeals to the announcement of radical plans during election campaigns.

Venezuela's economy is the worst performing in Latin America this year, a problem exacerbated by a drop in oil output since 2008, power outages, soaring inflation and shortages of food staples.