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Petroleos de Venezuela SA, or PdVSA, has begun the gradual payment of outstanding bills to large oil contractors, some of which insist the oil company isn't doing enough.

PdVSA has paid a fraction of its debt to a group of 56 oil-service companies and rig operators struggling to get paid by President Hugo Chavez's cash-strapped government.

PdVSA has paid as much as much as 7% of total outstanding receivables to some of these companies, industry executives say, but many claim to have received even less.

"We've made very little progress with PdVSA. Under 1% of outstanding receivables have been collected," said Juan Pablo Tardio, a spokesman for U.S. driller Helmerich & Payne Inc.(HP). PdVSA's debt with Helmerich & Payne has now exceeded $100 million, according to company data.

Tardio said the company will continue to idle drills when contracts expire as long as the total bill remains unpaid. The company has idled four of its 11 land rigs in Venezuela, and the rest could become idle by July. "We're doing our best to normalize our receivables," Tardio said.

Oil service giants Halliburton Co. (HAL) and Schlumberger Ltd. (SLB), have received anywhere between 5% and 7% of their total pending bill which adds to roughly $1 billion combined, by some estimates. Officials at both companies couldn't be reached for comment.

Recent comments from top PdVSA and oil ministry officials suggest the fight will be a long one for contractors. Oil Minister Rafael Ramirez said early this month that the government will review the legality of these debts. He has declined to say how much of PdVSA's pending bills could be considered illegal.

Meanwhile PdVSA plans to continue seizing oil rigs that become idle because of lack of payment. "We won't allow these companies to paralyze the industry," said Eulogio Del Pino, a PdVSA director. Paralyzing equipment, he argues, violates the contracts these companies have signed with PdVSA.

Del Pino said that in those cases, PdVSA will take control and operate the equipment for as long as it takes until PdVSA can negotiate new rates and a payment schedule with the contractor.

-By Raul Gallegos; Dow Jones Newswires; +58-414-120-5738; raul.gallegos@dowjones.com