* Venezuela seizes big oil project from U.S. company
* Sends troops to take boatyards in oil heartland
* Opens door to takeovers of major oil contractors
(Recasts, adds Williams response, details on Wood Group
contract, protesters wounded)
By Daniela Garcia
CIUDAD OJEDA, Venezuela, May 8 Venezuelan
President Hugo Chavez sent troops to seize oil service
companies on Friday, tightening his grip on the oil industry as
low crude prices pinch the OPEC nation's finances.
Chavez is a socialist and former soldier who has already
nationalized large chunks of the OPEC nation's economy,
including most of the energy sector and telecommunications
Williams Companies (WMB.N) said the government seized two
natural gas facilities in eastern Venezuela after building up
millions of dollars in debts for services, adding it could
demand payment through international arbitration.
Military vehicles rolled through the streets of Ciudad
Ojeda, on the shores of oil heartland Lake Maracaibo, where the
government seized hundreds of boats and shipyards after Chavez
signed a law to nationalize a group of oil service companies.
"We have started to nationalize all these activities
connected to oil exploitation," Chavez said from a confiscated
boat sailing across the lake. "This is a revolutionary
Williams said the government took over the El Furrial and
PIGAP II gas compression facilities, which are crucial for
boosting the production of fields that produce Venezuela's most
Flush with cash amid an oil boom, the president in 2007
nationalized oil projects worth billions of dollars, leading
oil giants Exxon Mobil (XOM.N) and ConocoPhillips (COP.N) to
quit the nation and sue for compensation.
Crude revenues have fallen in recent months and Chavez is
now moving against smaller service companies the government has
struggled to pay. The new law gives the government the option
to pay compensation in bonds rather than cash.
The move could lead to further declines in oil production
by risking slowdowns in key services following years of
underinvestment by state-owned oil company PDVSA, which
bankrolls the social programs that keep Chavez popular after a
decade in office.
The law makes it easier for the government to later seize
assets owned by service giants such as Halliburton (HAL.N) and
Schlumberger (SLB.N) as PDVSA builds up billions of dollars in
debts with contractors.
It appears to be targeted at specific service companies
that have been hampered by severe cash flow problems due to
lack of payment by PDVSA, which as of last year owed at least
$8 billion to contractors and providers.
Chavez told hundreds of oil workers dressed in the red
shirts that identify his supporters that the takeovers included
a water injection project part-owned by British company John
Wood Group (WG.L).
Six people demonstrating near Maracaibo, across the lake
from Chavez's rally, suffered gunshot wounds when an
unidentified gunmen fired on them, the investigative police in
Wood Group (WG.L) said on Friday it was in a strong
position to extract compensation for the loss of its 49.5
percent interest in a 16-year, $800 million contract in Lake
According to Williams' filings with the U.S. Securities and
Exchange Commission, it has three gas compressor facilities in
Venezuela with a net book value of $324 million.
Oil Minister Rafael Ramirez said the facilities help PDVSA
pump 500,000 barrels of crude per day from Venezuela's best
quality fields in the eastern state of Monagas.
Other oil service companies in Venezuela include Baker
Hughes (BHI.N) and BJ Services BJS.N.
(For a factbox on Chavez nationalizations, please click on
(For a factbox on service companies in Venezuela, please
click on [ID:nN08483574])
(Additional reporting by Ana Isabel Martinez and Brian
Ellsworth in Caracas, Manuel Hernandez in Maracaibo and Anna
Driver in Houston; Writing by Frank Jack Daniel; Editing by