Following on from the note below, check out this excellent analysis of the big strategic mistakes Pacific Rubiales (PRE.to) has been making recently in Colombia, published by Risk Management firm THAW. Here’s how it starts, click through for the rest:
What Oil Companies Should Not Do
When Hugo Chavez became president of Venezuela, he decided to seize complete control of Venezuela´s most important asset: PDVSA, the Venezuela oil company. His question to the people was simple: why if the country is so rich you are so poor?Decades later the Venezuelan diaspora has moved to places such as Miami, Panama and most recently Colombia. The technical expertise of many of these talented Venezuelan PDVSA professionals has been key to improving the know how in the emerging Colombian oil industry. Combined with changes in the regulation of the Colombian oil industry which eased the restriction on the activities of foreign nationals in the oil fields, Colombia has begun to see major improvements in exploration and output. Critical to this success are Canadian petroleum firms operating in Colombia. The most successful one is certainly Pacific Rubiales.As Pacific Rubiales has grown its operations, attention to the company and its practices has also grown. So when workers in the oil field protested and halted production for one week, Pacific became a public subject for Colombians overnight. The cause of the disturbance? A classic labor dispute: local operators who were contractors felt their wages were too low for the working conditions they were asked to endure. Simply put, the workers wanted better pay and better working conditions.What has followed are a series of mistakes by Pacific Rubiales that continue to make matters worse — and will ultimately threaten the oil sector as a whole if not corrected.