Leslie Moore Mira
fall of PDVSA, but how it helped a neighbor
Seen for two decades as an autonomous company shielded from political winds, Venezuelan state-owned oil company PDVSA's institutional DNA began to mutate after Hugo Chavez became president in 1999. According to technocrats' telling, Chavez's administration began to flex muscles and aimed to convert PDVSA into a populist voice box and social agent for change. Chavez was seen as taking aim at veteran petroleum engineers and oil executives whose politics didn't sit well with his. Vilification and persecution of PDVSA workers followed.
After what some describe as a messy combination of both a management lockout and a strike by upper and middle management in December 2002, as many as 20,000 PDVSA employees either left voluntarily or were pushed out.
PDVSA emigres have since dispersed hither and yon, with some said to have landed at Saudi Aramco, Mexico's state-owned oil monopoly Pemex, and others leaving the sector altogether. Ironically, Chavez nemesis and next-door neighbor Colombia has soaked up a considerable portion of PDVSA's brain drain, with former PDVSA talent now helping fuel that country's oil boomlet. Colombia's crude oil production from January to May averaged 884,000 b/d, according to the country's National Hydrocarbons Agency, while Venezuela's production is seen in the 2.3 million b/d range.
"Colombia is a welcoming country," said Luis Pacheco, a former director of strategic planning at PDVSA who is now a vice president of planning and information technology at E&P upstart Pacific Rubiales Energy. "We are building a new home; we have to be thankful for Colombia," said Pacheco, now a Colombian citizen.
Former PDVSA executives form the management core at expanding Pacific Rubiales, which in March announced it had formed a strategic alliance with Maurel et Prom of France for the acquisition of half of the interests held by the Paris-based company in five oil and natural gas fields in Colombia. Management at Vectra, another E&P in Colombia with a smaller profile, is also staffed by PDVSA veterans.
The transition from a heavyweight oil producing environment such as Venezuela to bantamweight producer Colombia can take on surreal aspects. In Colombia, "you have to work every day to keep up the reserves," Pacheco said in a phone interview. Pacheco said scratching out possible new finds in Colombia brings to mind an Alice in Wonderland verse: "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" But "in Venezuela the reserves are so huge they [workers] don't give the impression of being in a hurry," Pacheco said.
The PDVSA emigre praises Colombia's fiscal regime compared to Venezuela's more austere terms and said he detects no anti-Venezuelan bias from Colombians. "It's not a chauvinistic country," he said. The former executives and managers are, of course, unanimous in their displeasure with the current state of PDVSA--as they are with that country's presidency, which has won loyal following and votes from millions of poor Venezuelans who see Chavez as a virtual savior.
"The focus of the company is not aligned...focus has been lost," said Maria Lizardo, a former president of PDVSA affiliate, Bariven, which oversees engineering, procurement and project development on both upstream and downstream. The company has "devoted itself to a lot of other issues that are not their responsibility, such as food and housing programs," Lizardo said in a phone interview last week. "I think Venezuela had a lot of opportunity to develop the industry--especially when you see Ecopetrol and Petrobras today," said Lizardo, who worked at PDVSA for 27 years. Lizardo, now working for a US consulting company whose clients include Ecopetrol, Pemex and Repsol, thinks PDVSA is "losing our position in the world with our industry."
As are their compatriots at home, Venezuelan expatriates are following the state of Hugo Chavez's uncertain health (Chavez, absent from Venezuela for much of last month, is still recovering from surgery in Cuba) and political developments ahead of next year's presidential election.
Some former PDVSA workers are itching to return to Venezuela--but only after a regime change. "I would return immediately," said Horacio Medina, a former PDVSA manager who negotiated contract agreements between PDVSA and private companies. Medina belongs to a new fledgling group called Venezuela and its Oil, which he said is made up of engineers, lawyers, and economists who dream of creating a new state-owned oil company to replace PDVSA, an institution so "destroyed" that "you can't rebuild it," Medina said in a phone interview from his home in Florida.
Lizardo said she is open to a return to Venezuela and her profession there if leadership were to change. "I would return to the country, yes," Lizardo said, adding later in an email that she would want to share "experience to new generations that need it." Asked if he would return to PDVSA, Pacheco of Pacific Rubiales said in an email: "I will always be willing to be of help to Venezuela. PDVSA as I knew it does no longer exist as a viable entity."
-- Leslie Moore Mira in New York
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Leslie Moore Mira is a reporter for Platts News Service. Petroleumworld does not necessarily share these views.
This commentary was originally published in Platts Oilgram News "New Frontiers", The Barrel, Platts Oil's blog,
on July 4, 2011 . Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 08/04/2011
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