Venezuela says will pay for nationalized H&P rigs

CARACAS (Reuters) - Venezuela will pay Helmerich and Payne for a fleet of oil rigs it seized from the U.S. company, the oil minister said on Saturday, warning that five drills at a Chevron venture were also at risk of nationalization.

Oil Minister Rafael Ramirez announced this week that OPEC member Venezuela was nationalizing 11 rigs belonging to Helmerich and Payne following a year-long dispute over pending payments by state oil company PDVSA.

"Here we pay book value," Ramirez said. "A process begins by which we establish fair price between the two parties."

Socialist President Hugo Chavez has nationalized most of Venezuela's oil industry, starting with major heavy-crude projects worth billions of dollars in 2007, then taking over dozens of smaller service companies last year.

Ramirez said the government would not allow the private sector to idle equipment in pay disputes with state-run oil company PDVSA and did not rule out further nationalizations.

"We are not going to let the private companies stop work or boycott in any way our oil operations," Ramirez said. He mentioned five Wilson drills operating for Petroboscan as one company in trouble with PDVSA.

On PDVSA's website, Petroboscan is listed as a 115,000 barrel per day joint venture formed in 2006 with U.S. firm Chevron. Chevron says the project produced 90,000 bpd of liquids in 2009 and drilled six development wells.

Venezuela generally has good relations with Chevron, which is a partner in the multi-billion dollar development of the vast Carabobo field in the tar-like Orinoco oil belt.

PDVSA on Friday said it had reached agreements with 32 other companies over tariffs after the state firm fell behind in payments when oil prices collapsed in 2008.

(Reporting by Alexandra Valencia; writing by Frank Jack Daniel, editing by Anthony Boadle)