CARACAS, (Reuters) – Venezuela yesterday approved legislation allowing the nationalization of a group of oil service companies, opening the door for future takeovers as President Hugo Chavez extends control over the oil industry.
The law will make it easier for the government to 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.
It will directly affect natural gas producer Williams Companies Inc, which runs a key facility that boosts output of some of Venezuela’s most valuable crude and which last month took a $241 million charge for PDVSA nonpayment.
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 Chavez popular.
