President Hugo Chavez announced last week that Venezuela is nationalising 60 oil contractors as his government moves to assert control over the industry under a new law approved by the pro-Chavez National Assembly.

Many of the contractors run boats, docks and other facilities on Lake Maracaibo in oil-rich Zulia state, while others process natural gas or inject water into oil fields to help extract crude.

State-run Petroleos de Venezuela SA, or PDVSA, has recently clashed with domestic and foreign service providers, falling behind on billions of dollars in payments as it aims to cut costs by 40 per cent.

Oil Minister Rafael Ramirez said some contracts negotiated at last year's soaring crude prices are now overvalued. "We're not going to pay abusive rates to anybody," he said Tuesday.

Venezuela relies on oil for 93 per cent of exports, but has seen world oil prices fall 60 per cent since their July peak.

A barrel of light, sweet crude was trading at US$58.73 on the New York Mercantile Exchange on Tuesday.

Under a resolution published in Venezuela's Official Gazette on Monday, 39 companies currently providing services to PDVSA will be brought under government control _ including New Orleans-based Tidewater Inc and Gulmar Offshore Middle East LLC, based in Sharjah, United Arab Emirates.