Venezuela's Chavez seizes oil service companies

NEW TAKEOVERS

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 Maracaibo said.

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 Maracaibo.

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).

(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 Christian Wiessner)