Venezuela Starts New Licensing Round For Rigs, But Having Problems Keeping Them - Rigzone

[hatrack]

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.

EDIT

Venezuela's oil rig fleet peaked at 76 in mid-2006, the highest number in operation since 1998, according to data by Baker Hughes, an oil services firm. Since last July, 13 oil have gone out of service, two last month. Active natural gas rigs also fell to 10 from 12 over the period. Baker Hughes figures only include active drilling rigs, not those doing workover and completion work. PdVSA claims it has over 100 rigs in operation. Of the 49 Venezuela rigs tracked by Rigzone, an industry web site, only 29 are active, with another five ready for work. The remaining 15 require restart investments.

EDIT

http://www.rigzone.com/news/article.asp?a_id=41115

[JohnWxy]

1. Ahhh, The best laid plans ...run into complications.