PUERTO GAITAN, Colombia — “I don’t have any problems firing everyone I need to fire,” Venezuelan President Hugo Chavez thundered in 2002, as he began purging state oil company executives who had mounted protests against him.
Months later, nearly 20,000 oil workers, from petroleum engineers to geologists and managers, had been fired. But with the company under the president’s tight control, production has swiftly fallen and Venezuela has slipped from the world’s fifth-largest oil exporter to the 11th.
The oilmen who were banished have taken their experience drilling for Venezuela’s tar-like oil to countries as varied as Iraq, Nigeria and Canada. But the presence of Venezuelan petro-scientists has been most vital here in Colombia, where they have helped oil companies sharply increase the production of crude, much of which is exported to the United States.
“Chavez has been a huge help for the petroleum industry in Colombia,” said Humberto Calderon, a former Venezuelan mining minister who now runs Vetra Energy in southern Colombia.
Colombia is now on the verge of achieving what just a few years ago was unthinkable: pumping 1 million barrels of oil a day, up from 540,000 barrels daily in 2005.
“This is practically doubling production during the last four or five years,” said Javier Gutierrez, president of Colombia’s state oil company, Ecopetrol. “It’s a spectacular development.”
The new El Dorado is here in Colombia’s stark eastern plains, a wild land known for its horsemen and harp-based folkloric ballads.
Across 700 square miles, Pacific Rubiales Energy, which is listed on the Toronto stock exchange, jacked up production from 14,000 barrels a day as recently as 2007 to 224,000 last week. Although 12,000 Colombians work here, the company’s top directors and those overseeing exploration and production cut their teeth at the Venezuelan state oil company, Petroleos de Venezuela, known worldwide as Pdvsa.
“The top management of Pdvsa is now the top management of Pacific Rubiales,” said Ronald Pantin, the chief executive and founder of the company, himself a former high executive at Pdvsa (pronounced peh-deh-veh-sah). “All the people we brought from Venezuela have more than 25 years of experience, so people with a huge knowledge of all this geology.”
A new reality
That experienced oilmen are now considering Colombia as a destination is a testament to a new reality on the ground in this once-chaotic country and what oil analysts call Venezuela’s mismanagement of its oil sector.
Once terrorized by leftist rebel groups that often bombed oil pipelines, much of rural Colombia has been pacified after a long army offensive supported by U.S. aid. Colombia’s previous government, led by President Alvaro Uribe, also introduced financial incentives that lured scores of oil companies, said Ramon Espinasa, senior oil and gas specialist at the Inter-American Development Bank.
Gutierrez of Ecopetrol said 65 percent of the basins that may hold oil have now been awarded to oil companies; eight years ago only 13 percent of the potential oil fields were being developed.
If you enjoy the content at iBankCoin, please follow us on Twitter
I worked in Colombia back in 2002 or so for a short time. Our rig site got attacked by rebels and I saw 2 roughnecks get killed. Despite that, I actually liked working in Colombia and would go back if the opportunity presented itself.
hot chicks?
Hell yes, but Venezuela has more hotter.
Pacific Rubiales used to have 3 former Miss Colombia’s on staff…
The stock is ridiculously cheap trading under 4x ev/ebitda
FARC risk embedded in the price.
________