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Aban Offshore shares plummet after rig sinks off Venezuela coast

This article was posted on May 14, 2010 and is filed under Market News

Aban Offshore, India’s largest offshore drilling and oil field services provider, suffered a major setback on Thursday, when its gas platform Pearl sunk off the coast of Venezuela. This was one of Aban’s biggest money spinning rig earning $358,000 dollars or about a crore and a half rupees a day.

In an attempt to calm nerves after the explosion of an offshore drilling rig last month in the Gulf of Mexico, Venezuelan energy officials said the sunken natural gas rig posed no environment threat and that no workers had died. The cause of the sinking was unclear.

Mr. Chávez, who made the initial announcement about the sunken rig via his account on Twitter, the social networking site, also said that two Venezuelan Navy patrols were sent to the waters by the rig, which is owned by Aban Singapore, a wholly owned subsidiary of Aban Offshore, India’s largest oil rig company.

“You know this platform is semi-submergible,” Mr. Chávez told his followers on Twitter. “At midnight it listed, took on water, ceased operations and they evacuated,” he said.

The sinking of the rig, called Aban Pearl, is a setback to Venezuela’s efforts to upgrade its energy industry with the help of foreign oil companies. Just hours before the sinking, Mr. Chávez had celebrated on Wednesday the signing of major new oil contracts with companies including the Chevron Corporation of the United States, calling them “vital for our socialist project.”

Senior officials in Venezuela had recently been celebrating the Aban Pearl rig in particular. Planning Minister Jorge Giordani last week called the rig “a motive for pride of national engineering.” The rig was drilling for gas in the Mariscal Sucre gas-exploration project off the coast of Sucre, a state in northeastern Venezuela in waters near Trinidad and Tobago.

An official at Aban told the BBC that the Pearl was on contract to a Venezuelan state-owned firm and was being used to drill for natural gas. The rig could be used to drill up to 1,250 feet, according to the company’s Web site, and is one of 20 ships and rigs Aban owns.

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