Venezuela’s loss of thousands of oil workers has been other countries’ gain
Jul 19th 2014 | BOGOTÁ, CALGARY AND CARACAS | From the print edition
IN
2003 Venezuela’s then president, Hugo Chávez, fired more than 18,000
employees, almost half the workforce, of the state-run oil corporation,
Petróleos de Venezuela (PDVSA). Their offence was to have taken part in a
strike (pictured) called in protest at the politicisation of the
company. Their punishment was to be barred from jobs not only in PDVSA
itself but also in any company doing business with the oil firm. The axe
fell heavily on managers and technicians: around 80% of the staff at
Intevep, PDVSA’s research arm, are thought to have joined the strike. At
the stroke of a pen, Venezuela lost its oil intelligentsia.
It
was a blow from which PDVSA has never recovered. The firm’s oil
production has since stagnated (see chart), despite a big run-up in
prices. The financial crisis bears some of the blame for that, as does
the economic mismanagement of Chávez and, since last year, Nicolás
Maduro. But the loss of skilled personnel was a huge handicap, hurting
exploration and management. The Centre for Energy Orientation, a
Venezuelan NGO, says the number of incapacitating injuries due to
accidents at PDVSA rose from 1.8 per million man-hours in 2002 to 6.2 in
2012. At Pemex, Mexico’s state oil firm, the rate was 0.6 in 2012.
Venezuela’s
loss was others’ gain. Not all of the former PDVSA employees stayed in
the oil business; a minority chose to remain in Venezuela. But thousands
went abroad—to the United States, Mexico and the Persian Gulf, and to
farther-flung places like Malaysia and Kazakhstan.
Many headed to Alberta, in Canada, where
the tar sands yield a residue that is similar to the heavy oil from the
Orinoco belt, which Venezuela is struggling to develop. There were 465
Venezuelans in Alberta in 2001; by 2011 there were 3,860.
Pedro Pereira, who once headed PDVSA’s
research into the processing of extra-heavy crude oil, came to Canada in
order to set up a similar research team at the University of Calgary in
Alberta. His work focuses on inventing and patenting new technologies
to process Alberta’s crude. Three dozen Venezuelans have passed through
the Calgary centre since its inception, around two-thirds of them as a
direct result of the purge of 2003. All have gone on to work in the
Canadian oil industry.
No country has benefited more from the
Venezuelan exodus, however, than one next door. Colombia’s oil output
was declining at the time of the purge, falling from 687,000 barrels a
day (b/d) in 2000 to 526,000 five years later. Today, average daily
production stands at around 1m b/d. Much of this renaissance is thanks
to the Venezuelans.
Former PDVSA executives had been heading to
Colombia even before the purge. (Luis Giusti, a former chairman who
quit as soon as Chávez came to power in 1999, helped the Colombian
government redesign its energy policies.) But it was the post-2003
influx that revolutionised the industry. All of a sudden, says Alejandro
Martínez of the Colombian Petroleum Association, “Colombia was filled
with real oilmen.” The Venezuelans had years of experience, lots of it
spent abroad. They had an excellent technical heritage: PDVSA was
created in the mid-1970s when the local subsidiaries of sophisticated
firms like Exxon and Royal Dutch Shell were nationalised. They were also
used to thinking big. “They did not shy away from projects that needed
$2 billion in investments when for Ecopetrol [Colombia’s state oil firm]
$50m was a big deal,” says Mr Martínez.
In 2007 Ronald Pantín, a former chairman of
PDVSA Services, bought Colombia’s Meta Petroleum along with several
partners. Meta operated the Campo Rubiales field in central Colombia,
from which operators were then barely squeezing 14,000 b/d. Now it is
the country’s largest producing oilfield, and Pacific Rubiales Energy,
Meta’s owner, is the largest independent oil producer in Colombia.
Humberto Calderón, a former Venezuelan oil minister, founded Vetra in
2003. Today the two firms account for more than a quarter of the
country’s production.
Without the input of the Venezuelans “there
is no way Colombia could have doubled its production in such a short
time,” says Carlos Alberto López, an energy analyst. It was an
“extraordinary coincidence” that Colombia carried out its reforms just
as PDVSA’s managers were thrown out, oil prices soared and areas once
under guerrilla control were made safer. “The timing couldn’t have been
better,” says Mr López.
The prospects for enticing the diaspora
back to Venezuela are poor. The expatriates have put down deep roots
abroad, and the situation at home remains chaotic. PDVSA’s goal is for
the Orinoco belt to be producing 4.6m b/d by 2019. But the oil is
difficult to refine, and the huge investment required is hampered by the
government’s insistence on overvaluing the bolívar. So far PDVSA has
missed all its intermediate targets for Orinoco: by the end of 2013 it
had reached 1.2m b/d, compared with a planned figure of 1.5m.
Welders,
electricians and machine workers reportedly make three times as much
helping with the expansion of Ecopetrol’s refinery in Cartagena as they
can in Venezuela, according to El Nacional,
a Venezuelan daily. A ranking published by Hays Oil and Gas, a
recruitment agency, put the average annual salary for oil-industry
professionals in Colombia at $100,300. In Venezuela it is $50,000. From
Calgary Mr Pereira says he is seeing a “second wave” of emigration that
began a couple of years ago, of young professionals with five or six
years’ experience. “As soon as they get some significant knowledge,
they’re leaving,” he says. “The company, and the country, is heading for
a disaster.”
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