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The Associated Press June 29, 2010, 6:59PM ET

Venezuela approves seizure of US-owned oil rigs

Lawmakers loyal to President Hugo Chavez authorized the nationalization of 11 oil rigs owned by U.S. driller Helmerich & Payne on Tuesday, saying the move was necessary to put the idled rigs back into operation.

The predominantly pro-Chavez National Assembly declared the rigs "of public utility," clearing the way for the government to seize permanent control of the rigs used to extract heavy crude from oil fields.

The Tulsa, Oklahoma-based company shut the rigs down last year because Venezuela's state oil company, PDVSA, was behind on payments. The company said last week that PDVSA's debt was $43 million as of June 14.

The shutdown angered PDVSA officials, spurring the announcement last week that Chavez's government would nationalize the rigs because Helmerich & Payne had rejected demands to resume drilling for more than a year.

Venezuela's oil production has dropped by 300,000 barrels a day in the oil-producing states of Monagas, Anzoategui and Zulia since Helmerich & Payne shut the rigs down, according to the state-run AVN news agency.

It reported that pro-Chavez lawmaker Jesus Graterol justified the takeover, saying: "This company has refused to discuss service contacts with PDVSA."

Chavez's government has nationalized dozens of privately owned companies in recent years as the socialist leader seeks to expand the state's role in the economy.

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