The downturn in energy prices is putting a cash flow squeeze on all producers, including the national oil companies.
Many of them made long-term commitments to use equipment at dayrates reflective of $140 oil. Now, with oil at $40/bbl, those commitments made a mere 6 months ago seem short-sighted.
Petrosucre, a joint venture of Venezuela's state-owned oil company PdVSA and Italian giant ENI, entered in to such a contract with Houston-based ENSCO, a drilling contractor, just last August. Petrosucre contracted to use the ENSCO 69, a mobile drilling rig, for a two year term at $180,000 per day.
A mobile drilling rig, as its name suggests, is a vessel that can move from place to place. It is used to drill wells and prepare them for production. When that operation is finished, it moves to a different location to drill another well.
Fast forward to January 2009. Petrosucre owes ENSCO $35.5 million, an amount that increases by $180,000 a day. As the rig is fully staffed by ENSCO supervision and rig workers, costs continue for ENSCO even if their invoices are not being paid.
This week, in what is being characterized as a contract dispute, Petrosucre assumed operations of the rig. ENSCO supervisory personnel have remained on the rig, but operations will be conducted by PdVSA personnel.
In a dispute between private companies, ENSCO could take its rig and go home. In this case, PdVSA's interest will be looked after, one would assume, by the Venezuelan navy.