Oil Minister Rafael Ramirez said a fleet of oil rigs belonging to the Oklahoma-based company would be seized by the state and hinted that other companies seen not to be operating at full capacity could be targeted for nationalization.
A state takeover of the company's assets was anticipated amid an ongoing dispute over payments between Helmerich and Payne and the state-run Petroleos de Venezuela, S.A. Sources said the U.S. company was owed amounts by PDVSA and would only resume operations after its account had been settled.
Details of the dispute are mired in controversy, with PDVSA saying very little about the financial details.
Venezuela's oil production has been declining in recent years partly because of a slow government follow-up to nationalizations that entailed wholesale removal of key personnel. However, details of the production, too, remain vague. The decline in oil production was monitored by independent industry analysts as well as the Energy Information Administration of the U.S. Department of Energy.
Similar disruptions were reported in other nationalized industries including power generation, telecommunications, steel and banking.
Ramirez told reporters companies that refused to put their rigs into production were part of a plan to weaken the government of President Hugo Chavez.
"There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and has preferred to keep this equipment stored for a year," Ramirez told reporters. "That is the specific case with U.S. multinational Helmerich and Payne."
The nationalizations come before congressional elections in September and are seen by analysts as part of the government's plan to divert attention away from the recession. Venezuela recorded negative growth at the beginning of the year, and economic forecasts said the economy could further shrink during the year.
The economic slowdown has hit food supplies after several months of power stoppages caused by drought. Earlier Chavez announced plans to take over distribution companies after he accused them of encouraging hoarding and black markets.
The government is under increasing pressure after the opposition shifted strategy and announced it would take part in the September polls. An opposition boycott of previous elections gave Chavez a comfortable majority in Congress.
This time Chavez is putting forward his trusted aides for the election. Seven of his key ministers resigned so they could take part in the congressional elections.
In the latest reshuffle, carried out mainly to deal with the election challenge, Chavez eliminated the Ministry of Public Works and Housing, created less than six years ago, in favor of two new departments. The new Transport and Communications will be headed by Francisco Garces and Housing and Habitat will be handed by Ricardo Antonio Molina.
Public Works and Housing Minister Diosdado Cabello, a confident of Chavez, will be running for a congressional seat representing the eastern state of Monagas.
Maria Isabella Godoy takes over as presidential chief of staff in place of Luis Reyes Reyes, who tops the ruling PSUV party's electoral list in the western state of Lara.
Communication and Information Minister Tania Diaz stepped down to run for Congress from Caracas and was succeeded by Mauricio Eduardo Rodriguez Gelfenstein.
Jennifer Josefina Gil Laya replaces Hector Navarro, the ruling party's congressional candidate in the central state of Miranda, as minister of education. Also leaving their offices to run for the National Assembly are the ministers of sport and social protection and the head of the Office of Women and Gender Equality.