Venezuela Moves Forward With Oil Nationalizations

RACHEL JONES

CARACAS, Venezuela (AP) — Venezuela's state oil company said Tuesday that it has taken control of 90 percent of oil contractors on western Lake Maracaibo as it aims to reduce costs due to falling crude prices.

President Hugo Chavez announced last week that Venezuela is nationalizing 60 oil contractors as his government moves to assert control over the industry under a new law approved by the pro-Chavez National Assembly.

Many of the contractors run boats, docks and other facilities on Lake Maracaibo in oil-rich Zulia state, while others process natural gas or inject water into oil fields to help extract crude.

State-run Petroleos de Venezuela SA, or PDVSA, has recently clashed with domestic and foreign service providers, falling behind on billions of dollars in payments as it aims to cut costs by 40 percent. Venezuela's Energy Ministry says PDVSA's unpaid invoices jumped 145 percent last year over 2007, to reach $13.9 billion in December.

The U.S. government is "monitoring the situation" and has been in close contact with companies that could be affected through its embassy in Caracas, U.S. State Department spokesman Noel Clay said Tuesday.