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CARACAS, Venezuela - Ensco International Inc. said Wednesday that it suspended oil drilling operations off Venezuela's Caribbean coast because the South American nation owes the U.S.-based company over $35 million for its services.
Dan Rabun, president and CEO of Ensco, said the company is eager to settle the disagreement that led Venezuela's state oil company, PDVSA, to take control of one of its oil rigs and accuse the Dallas, Texas-based oil services firm of abandoning operations.
Petrosucre, a joint venture between PDVSA and Italy's Eni, is now operating the rig known as Ensco 69.
"We remain committed to providing the same standard of safe and reliable services to PDVSA as we have in the past, and we are hopeful that the situation involving ENSCO 69 soon can be resolved to the mutual satisfaction of Petrosucre and Ensco," Rabun said in a statement.
Of Ensco's 46-rig fleet, Ensco 69 is the only one operating in Venezuela. Ensco said in Wednesday's statement that Petrosucre has informed the company that PDVSA is "temporarily" taking over the rig's operations.
On Tuesday, PDVSA said Ensco had refused to accept certain methods of payment for services that began in December 2008. Petrosucre assumed control on the base of "public use and social interest" to guarantee the rig's continued activity, PDVSA said.
PDVSA is becoming increasingly short of cash due to depressed world oil prices, leading to complaints of unpaid bills from some contractors and service providers.
Prices for light, sweet crude have fallen more than 70 percent since July's record high of over $147.
Eduardo Garmendia, president of the Venezuelan Association of Metal Industries and Mining, told The Associated Press on Wednesday that PDVSA has accumulated multimillion dollar debts with Venezuelan companies that supply the state-run company with valves, pipes and tanks.
PDVSA's debts with local suppliers has reached $69.7 million, Garmendia said.
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Associated Press Writer Fabiola Sanchez contributed to this report.
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