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Venezuela seizes 11 Tidewater vessels

Tidewater Inc., a water transportation company that serves the petroleum industry, said Thursday that Venezuela's state oil company has seized 11 of its vessels and an operations base.
/ Source: The Associated Press

Tidewater Inc., a water transportation company that serves the petroleum industry, said Thursday that Venezuela's state oil company has seized 11 of its vessels and an operations base.

Venezuela is nationalizing 60 oil contractors as President Hugo Chavez moves to assert control over the industry. The state oil company, Petroleos de Venezuela SA, or PDVSA, 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.

During a conference call with investment analysts, Tidewater's chief financial officer, Quinn Fanning said that in addition to losing the ships and operations base on Lake Maracaibo to PDVSA, Tidewater is owed $40 million in unpaid bills for its pre-seize services to the company.

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.

Tidewater has a fleet of over 400 vessels the transport personnel, equipment and supplies to offshore petroleum projects. Western Lake Maracaibo is an oil-rich region.

The new Venezuelan law authorizing the takeover calls for companies that had assets seized to be compensated, Tidewater officials said. In addition to the value of the vessels, Tidewater also has the unpaid bill, along with the loss of contracted business, Fanning said.

"We will strive to protect shareholder interests with all legal tools available," said Tidewater chief executive Dean Taylor.

Tidewater officials said it was too early to tell how the seizure might affect the company's bottom line. Fanning said the seized ships accounted for about 3 percent of Tidewater's vessel revenue in March.

Company officials said the seizure was executed without violence and some of the Tidewater employees have gone to work for PDVSA.

Taylor said Tidewater, which has performed business in Venezuela for 50 years, has not decided whether to pull out of the country entirely. He said that decision would be made if the company is assured of no additional confiscations — and if the working environment was safe for Tidewater employees.

"The safety of our people" is foremost, Taylor said. "That is a line we will not cross."