Venezuelan soldiers have taken control of boatyards and other assets belonging to oil service companies in the latest step by socialist President Hugo Chavez to tighten his grip on the industry.
Earlier yesterday, Venezuela's legislature approved a law allowing the nationalisation of a group of oil service companies. Mr Chavez said the takeovers would quickly start in the Lake Maracaibo oil heartland in the western state of Zulia.
"Tomorrow, we will start to recuperate assets and goods that will now belong to the state, as social property, as they should always have been," he said, adding that thousands of workers would be taken on by state oil company PDVSA.
But members of a Zulia business group that represents local oil firms told Reuters soldiers seized the installations of 20 companies on the eastern side of the lake late last night.
The law makes it easier for the government to later seize assets owned by service giants such as Halliburton and Schlumberger; as state oil company PDVSA builds up billions of dollars in debts with contractors amid low oil prices.
The socialist president nationalised oil projects worth billions of dollars two years ago and is now moving against smaller service companies that the government has struggled to pay as crude revenues fell in recent months.
The move could lead to further declines in the Opec nation's oil production by risking slowdowns in key services following years of underinvestment by PDVSA, which bankrolls the social programs that keep Mr Chavez popular.
The law puts the state in charge of companies providing a range of services including gas and water reinjection and marine transport in Lake Maracaibo and gives PDVSA the right to take over companies involved in those operations.
The law will let the government expropriate companies and compensate firms with bonds instead of cash, order preliminary takeovers of service company assets while courts settle disputes and possibly annul existing contracts.
Reuters