Pride International Inc and other US oil-drillers are idling rigs in Venezuela and sending workers home as a 19-day strike aimed at toppling President Hugo Chavez cripples the nation's crude-oil production.
Pride, the biggest US-based contract driller in Venezuela, has shut all but one offshore rig and a few others on land, Chief Financial Officer Earl McNiel said. About half of Pride's 50 rigs in the country were working before the strike began, he said.
"Things are just kind of grinding to a halt," McNiel said in an interview. "A number of the rigs were shut down early on by our customers fearing unrest. Most of the rest were shut down as they ran out of fuel."
A nationwide strike has cut crude production in Venezuela, the world's fifth-largest oil producer, from 3 million barrels a day to 200,000 and left as many as 70 percent of the nation's gasoline stations dry. Shortages have also left drillers without diesel to power rigs, which earn US$25,000 to US$40,000 a day.
The world's largest offshore oil and natural-gas driller, Houston-based Transocean Inc, shut two rigs working for state-owned Petroleos de Venezuela SA, or PDVSA, because the company couldn't get drilling fluids used to lubricate the drill bit and control pressure in the well. Helmerich & Payne Inc idled one of its five working rigs for the same reason.
Dallas-based Ensco International Inc shut its only working rig in Venezuela because of a lack of fuel, a spokesman said. The barge rig was drilling a well for Royal Dutch/Shell Group.
The disruption comes at the end of a year in which revenue and earnings for drilling companies have fallen as the average number of rigs working worldwide fell 20 percent. The drop in North America, the world's biggest market, has been even more severe.
The strike will have little effect on fourth-quarter profit, executives and analysts said. Most companies are still receiving partial payments under ``force majeure'' provisions in contracts with producers, and operating costs drop when rigs are idle.
"It really shouldn't have a big impact," said Andreas Vietor, an analyst at Stifel Nicolaus & Co. "The Venezuelan market has been generally weak for the better part of a year."
Some drillers, including Houston-based Transocean, have sent home US employees who were working in Venezuela. The company still has two rigs running, spokesman Guy Cantwell said.
While most of the 100 or so American citizens working for Pride in Venezuela remain in the country, some of their families have returned to the US, McNiel said.
Shares of Pride rose US$0.43 to US$15.55 at 4:01pm in New York Stock Exchange composite trading. They have risen 3 percent this year. Transocean shares rose US$0.31 to US$24.80. Helmerich & Payne rose US$0.92 to US$29.70.
Drilling activity in Venezuela has fallen in 2002 because of OPEC production cuts and reduced exploration by PDVSA, analysts said. There was an average of 43 rigs working in November compared with 61 in the same month a year earlier.
Even the 2001 figures pale to those before Chavez was elected president in 1998 and adopted policies that discouraged foreign investment, analysts said. The average number of rigs in the country exceeded 100 throughout 1996 and 1997.
"There's been a dearth of activity down there for a long time," said Lehman Bros. analyst Angie Sedita. "In the early '90s, Venezuela was seen as a growing region. Everybody was talking about Venezuela, and very quickly that changed."
More than 90 percent of Tulsa, Oklahoma-based Helmerich & Payne's rigs in Venezuela were in use from fiscal 1996 through 1998, Chief Financial Officer Doug Fears said. Utilization has fallen to 50 percent since Chavez was elected. The company had six rigs working in eastern Venezuela before the strike began.
"He made it less attractive for some of the majors to do business there and he didn't want to be as aggressive in exploring the oilfields," Fears said.
Venezuela's Supreme Court yesterday ordered striking PDVSA employees to return to work and yesterday the country again began loading oil tankers as the government tries to break the walkout.
US drilling company executives didn't speculate on how long the strike will last.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last