Now that he has won reelection to a third term, Venezuelan President Hugo Chavez will have to pivot to the country’s enormous economic challenges. Perhaps the biggest is that its economic engine—the oil industry—has been atrophying since 2002, when he fired 20,000 striking executives and workers from PDVSA, the state oil company, over a strike.
Technically speaking, Venezuela has the largest proved oil reserves on the planet, and among the 10-largest reserves of natural gas. It produces three million barrels of oil a day, and wants to boost that to five million barrels a day. But there are serious doubts about whether or how fast that will happen. One impediment is Chavez’s own erratic behavior with oil contracts, in which he has repeatedly demanded material changes in ownership stakes. But the other is more structural—the exodus of many of those 20,000 workers to other countries.
One of the main beneficiaries of Chavez’s loss has been neighboring Colombia, which is experiencing an oil renaissance (paywall). Since 2007, Colombia’s oil production has risen to 750,000 barrels a day from 400,000 barrels a day. How has this happened? To a large degree through companies managed by former PDVSA employees.
Eight of the top 11 executives of Colombia’s second-largest oil company, Pacific Rubiales Energy, are former senior leaders at PDVSA, including CEO Ronald Pantin. Vetra Energia, another big Colombian oil company, is run by Humberto Calderon, PDVSA’s former president, and its senior ranks, too, have at least six former top executives from the Venezuelan state oil company.
We’ve removed additional data from this post that we couldn’t immediately verify.