PDVSA Takes Control of Williams Companies' Gas Assets

Researched by Industrial Info Resources (Sugar Land, Texas)--On May 21 , 2009, the Venezuelan government took control of natural gas injection and transmission assets owned by transnational energy company Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma). The seized assets include the gas compression and injection complex Pigap II (Santa Barbara, Venezuela), the El Furrial gas injection plant and the Jusepin compression plant, all located in the Venezuelan state of Monegas and possessing a combined capacity of 2 billion cubic feet per day of natural gas injection and compression.

This measure is the result of the Organic Law, approved by the Venezuelan National Assembly on May 7, 2009, which states that all goods and services resulting from the main hydrocarbon activities taking place in the country must be part of the state reserves. Beginning on May 8,Venezuelan president Hugo Chavez led the operation, which was part of the country's transfer of its oil industry to state control.

In other areas of the country such as Maracaibo, the same measure will be implemented, and other facilities will be nationalized. From the United States, Williams Companies confirmed that the Venezuelan government has taken over the plants and at the same time reported that state-owned energy company PDVSA (Caracas, Venezuela) had failed to pay for the services offered by the American company for a long period of time. This conflict could be taken to international courts for resolution. On the other hand, Venezuelan Energy and Oil Minister Rafael Ramirez stated, "We are exercising our economic sovereignty to build socialism. With this act, we replace the private property for the social one."

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