If Mark Twain had been a Chavista

If Mark Twain had been a Chavista, he would say that reports of Venezuela´s imminent demise have been greatly exaggerated. Gazing down from a helicopter at oil rigs cropping up like obelisks above the remote Orinoco extra-heavy oil belt, one might easily echo that sentiment.

In an unusual effort to reach out to selected foreign media, state-owned PdV recently invited a handful of journalists to tour some of its new Orinoco joint-venture projects and meet the senior executives and workers behind them. It was a rare opportunity to question a company that has waxed insular in recent years, and see first-hand that one strategic facet of Venezuela´s oil industry appears to be inching forward against the odds.

The oil belt, known in Spanish as the Faja, lies in southeastern Venezuela´s vast wilderness, a mostly flat, scorching expanse north of the Orinoco river. This is Venezuela´s El Dorado, holding 270bn bl of proven reserves, the largest oil deposit in the world.

PdV and several of its foreign partners, most visibly Chevron, are laying well pads, drilling into the dusty earth and commanding the thick black stuff to flow. When our chopper touched down at the project sites, scores of red-clad Venezuelan engineers and workers awaited us, eager to convey the upstream successes that would debunk assertions of an oil country gone awry.

One needn´t be an acolyte of famed late president Hugo Chavez to recognise progress in the Faja. But if you are a Venezuelan who wants to share in this, it helps if you are. Images of Chavez and his socialist dictums are plastered across many of PdV´s offices and installations. And PdV officials routinely divide recent history into before and after his 1999 rise to power and the 2007 nationalisation of the oil upgraders at Jose. Even chief executive Eulogio del Pino, widely considered a pragmatic oil man, characterised the pre-Chavez era as a “complete catastrophe” for the oil industry.

Departing from that assertion, how to explain the eroding of Venezuela´s production and refining capacity over the past decade and a half? It was hard to ask such a loaded question over the din of the chopper blades, but there is no shortage of critics who would snap to respond.

One clue lies with PdV´s potent social mandate. Signs outside the company´s Caracas headquarters declare that it “now belongs to everyone”. One young engineer told us how it used to be almost impossible to land a job in PdV. “Now everyone has the opportunity,” she said. Indeed, PdV says it is hiring groups of 150 Venezuelan engineers three times a year.

That´s a lot of new hires for any oil company, especially after the price slump, but it seems way out of proportion for a deeply indebted firm like PdV. The current payroll reaches at least 120,000.

Yet burgeoning headcount may be the least of PdV´s challenges. Drill bits seem to be spinning fast in the Orinoco, but PdV´s foreign joint-venture partners are reluctant to make final investment decisions that would turn today´s 50,000 b/d of early production into the 2.5mn b/d bonanza that PdV needs to meet its elusive 6mn b/d target by 2019.

Back in Caracas and fresh off the company jet, reality sets in. Venezuelans of all stripes grumble of shortages, from milk to motor fuel. Inflation exceeds 100pc, and the economy is projected to recede by 7pc this year. Slums still blanket the hills as far as the eye can see. The opposition say that no sooner do street protests erupt than security forces snuff them out. Talk of legislative elections that are supposed to take place later this year often evokes cynicism.

PdV´s senior executives privately acknowledge that it´s difficult to reconcile their message of progress with the broader polarised climate and dilapidated economy. But they are soldiering on, in the hope that the Orinoco´s huge potential will turn their country around.

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