Venezuelan Know-How Fuels Rise Of Colombian Oil

Sep 16, 2011

Nearly a decade ago, Venezuela's President Hugo Chavez fired 20,000 striking oil workers, many in highly specialized areas who had years of experience.

Venezuelan oil production has since fallen, and those banished oil workers are helping boost oil production in other countries, including one new oil frontier, Colombia.

On a recent day on Colombia's southern plains, the oil fields run by Pacific Rubiales, the country's biggest private oil producer, were a hive of activity.

Oil rigs noisily drilled, while nearby, thousands of workers paved roads, installed pipelines and built huge oil tanks. Across 700 sun-baked square miles, they are fixated on one objective: producing more oil to add to the quarter-million barrels pumped each day.

It's a far different place than it was a few years ago, when Marxist guerrillas targeted oil installations and oil production in Colombia barely topped 14,000 barrels daily. Then, the Venezuelans came. One of them was Ronald Pantin, now chief executive of Pacific Rubiales.

"We knew that that oil was here because we understand very well all the geology here in South America," he said. "We bought the Rubiales field, and now you see what has happened."

In 2002, Venezuela's oil workers were on the front lines of huge protests against Chavez, that country's fiery leftist leader.

Chavez got the upper hand and purged dissident workers from the state oil company. Pantin, a former executive at the company, was among those who had previously quit. But his colleagues — many with a quarter-century of experience — were among those fired.

"[Chavez] fired knowledge. And then you had this diaspora of Venezuelans going everywhere — to Canada, Colombia, the Arab countries, everywhere, people with pretty good experience in the oil sector," Pantin says.

Similar Geology

Hundreds landed in Colombia. The fact that the country was largely unexplored was attractive to Venezuelan oilmen like Humberto Calderon, who founded Vetra Energy with other Venezuelans.

Calderon knew Colombia shared some of the same geological formations as his homeland. He says two other factors helped attract wildcatters: security policies that weakened the rebels and favorable financial terms that lured investors.

"The conditions were here, the opportunities to grow here were present, and at the same time we feel very well-protected, that any political interference wouldn't come here to affect us," he says.

Colombia's gain has been Venezuela's loss: That country had once been the world's fifth-largest exporter; now, it's down to 11th place. And in Colombia, production rose from just over 500,000 barrels a day in 2005 to nearly 1 million barrels today. Most of the oil is exported, and the biggest recipient is the United States.

A quarter of the production is in the southern plains, where helicopters ferry oil workers from one end of the Rubiales field to the other. There's a school, a hotel and streets of prefabricated housing for workers. German Hernandez, a Colombian who oversees oil operations in the area, remembers a far different place a decade back when he first arrived.

There were fewer than 20 workers, he says, and they lived in tents.

Today, Hernandez says, it's the country's biggest oil field.

The goal for this company, he says proudly, is to double its production to half a million barrels a day in five years.

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