Venezuela Steals Property Owned by US Firms

Hugo Chavez apparently has a thing for oil rigs owned by US firms.

“Venezuela's legislature has voted to nationalize 11 oil rigs owned by the US firm Helmerich & Payne. The rigs, located in Monagas, Anzoategui and Zulia states, will be taken over by state oil giant Petroleos de Venezuela (PDVSA), the official news agency AVN said.

PDVSA had asked the legislature controlled by supporters of leftist President Hugo Chavez to take over the rigs after the US firm declined to negotiate a new service contract, unlike 32 other foreign firms. The oil giant is South America's top oil producer.

Since 2007 Caracas has nationalized companies in industries from oil to utilities, to telecoms, cement, steel and banking.”

The US government is duty-bound to protect the property interests of this US company. No, President Obama, the response should NOT be to invade or otherwise bomb Venezuela into submission.

Nonetheless, the US response should be firm and decisive. Fittingly enough, it turns out that PDVSA actually owns 100% of the CITGO service stations located in the US.

Unless the Venezuelan government backs down, the US response should be turning over to Helmerich & Payne sufficient ownership interest in the US-based CITGO service stations in order to compensate them for this loss. However, since as a drilling firm Helmerich & Payne is likely not interested in operating gas stations, they should be free to sell them to another firm that already has this line of business, in exchange for cash.