Chavez Stole Private Drilling Ops, Oil Co. Says

WASHINGTON (CN) - An American oil-drilling company claims Venezuelan President Hugo Chavez ordered armed and uniformed soldiers to seize the company's oil and gas drilling business in Venezuela after the country stiffed it to tune of $32 million in unpaid invoices.

Helmerich & Payne International Drilling and its Venezuelan subsidiary filed a federal complaint against the Bolivarian Republic of Venezuela and its state-sponsored energy companies, Petroleos de Venezuela and PDVSA Petroleo, alleging violations of international law and breach of contract.

"On or about June 13 and 14, 2010, employees of the PDVSA defendants and armed and uniformed soldiers of the Venezuelan National Guard surrounded and unlawfully blockaded the business premises of H&P-V's drilling operations in Anaco, in the eastern region of Venezuela, at that time H&P-V's headquarters in Venezuela," says Helmerich, a Tulsa, Okla.-based company. "On information and belief, in effectuating both blockades, the employees of the PDVSA defendants and the Venezuelan National Guard soldiers acted at the direction of defendant Venezuela and its anti-America and authoritarian President Hugo Chavez and/or his Minister of Energy and Petroleum Rafael Ramirez."

Helmerich says Chavez's solders seized its assets, "preventing H&P-V from relocating any assets from its yards, and intimidating H&P into forgiving long-outstanding debts of the PDVSA defendants." It was also forced into continuing providing PDVSA with drilling services without pay, according to the complaint.

After the seizure, Helmerich says Chavez handed over operations of its business to the PDVSA and at a political rally at the entrance to the facility, Minister Ramirez told PDVSA employees and soldiers that "at this moment ... the Venezuelan Government ... is taking control over this drill company which as been nationalized by the revolution."

Helmerich says the 2010 seizure was the culmination of years of unpaid invoices and oil and gas contract breaches.

"Beginning in late 2008 and 2009, despite the fact that H&P-V had fully performed all of its obligations under the relevant contracts, the PDVSA defendants began systematically to breach those contracts," Hemerich says. "Although contractually obligated to pay at clearly established rates, the PDVSA defendants - knowing that Venezuelan courts would not protect H&P's commercial rights - simply refused to pay as required under the contract."

"The PDVSA defendants' unexcused failure to pay for H&P's oil drilling services has resulted in over $32 million in unpaid invoices, and defendants have expressed no intention of fulfilling their contractual obligations," the complaint also states.

Chavez controls the Venezuelan courts, which have "ruled in favor of the government in 324 of the 325 cases brought by private citizens against the government," Helmerich says, adding that Chavez removes judges at will and without cause to keep the courts loyal to him.

"Upon information and belief, no U.S. company has ever prevailed in Venezuelan courts in a civil action for damages against the Chavez regime," it claims.

Helmerich says the unlawful taking of its commercial business gives jurisdiction over the case to U.S. federal courts under an exception to the Foreign Sovereign Immunities Act.

It wants Venezuela to pay compensatory damages for violating international law and committing breach of contract. Helmerich is represented by David Ogden of Wilmer Cutler.

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