Venezuela seizes ENSCO rig

Venezuela seized an oil rig run ENSCO in a dispute over payment for services today, a sign that tumbling oil prices have worsened the cash crunch at state-run PDVSA.

The company said ENSCO had broken its contract by halting drilling at the offshore Petrosucre oil project that includes investment from Italy’s ENI in a dispute over ENSCO’s past work. PDVSA said Dallas-based ENSCO had earned $110 million from its work at the project, but did not say how much money ENSCO was owed or whether negotiations continue. ENSCO was not immediately available to comment on the issue, but a company spokesman had previously confirmed it was struggling to receive payment from PDVSA. PDVSA has built close to $8 billion in debts with providers and sources said in recent months it has skipped payments to partners and services companies as falling crude prices and heavy social spending have pinched its finances. But the company has faced growing complaints from a broad array of providers about unpaid bills.

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