Helmerich & Payne International Drilling Co. v. Bolivarian Republic of Venezuela
United States Court of Appeals for the District of Columbia Circuit
2018 WL 3901246 (2018)
- Written by Tanya Munson, JD
Facts
The Venezuelan company Helmerich & Payne de Venezuela, C.A. (H&P-V) (plaintiff) was a wholly owned subsidiary of Oklahoma-based Helmerich & Payne International Drilling Co. (H&P-IDC) (plaintiff). H&P-V acquired special drilling rigs and developed substantial infrastructure to drill in Venezuela’s difficult geological conditions. H&P-V provided exclusive oil and gas drilling services to Venezuelan state-owned state entities, including Petróleos de Venezuela, S.A. and PDVSA Petróleo, S.A. (collectively PDVSA) (defendant), that owned and managed Venezuela’s oil reserves. PDVSA’s workforce went on strike from 2002 to 2003, and Venezuela’s president, Hugo Chávez, subsequently replaced much of PDVSA’s workforce. PDVSA refused to make payments on drilling contracts and refused to pay H&P-V. H&P-V warned it would not resume drilling operations unless PDVSA paid a portion of its debt. PDVSA stopped all payments in 2010 with nearly $32 million in debt remaining. In an attempt to force H&P-V to restart operations immediately and forgive PDVSA’s outstanding debt, PDVSA employees, at the command of the Venezuelan government (defendant) and with help from the Venezuelan National Guard, blockaded 11 of H&P-V’s drilling sites. The Venezuelan government declared that taking all H&P-V’s oil drilling rigs and the associated property was for the public good. President Chávez then issued an expropriation decree, which authorized the forcible taking of H&P-V’s assets and declared the property belonged to PDVSA, effectively nationalizing the drilling operations. H&P-V and H&P-IDC sued PDVSA and Venezuela in district court, claiming that the expropriation of H&P-V’s business and assets without compensation violated international law. PDVSA and Venezuela moved to dismiss. The district court dismissed H&P-V’s expropriation claim but denied the dismissal of H&P-IDC’s claim.
Rule of Law
Issue
Holding and Reasoning (Tatel, J.)
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