Amid cutbacks in Venezuelan operations, Houston-based Schlumberger has also eliminated some of its employees working on these projects. Employee protests have ignited as well as worry over the OPEC nation’s dropping numbers in output.
In April, Schlumberger announced that it would decrease activity in Venezuela because of zero improvements and insufficient payments. Operations in Venezuela accrued below 5 percent of Schlumberger’s combined revenue in 2015. Workers on the oil-heavy Maracaibo Lake and Orinoco belt are included in the cuts. According to one union leader, the dismissals signal the country’s falling rate of production and further collapsing of the Venezuelan economy. Halliburton also made an announcement involving less activity in the country back in April, but has not yet provided further details on the reduction.
A worker from the city of Maturin said about the cuts, “They’re getting rid of almost all the workers because they’re reducing operations and the contracts won’t be renovated because of debt owed by PDVSA.” The employee does not have the authorization to communicate with the media and requested anonymity in exchange for his statement.
Schlumberger declined to make a comment and PDVSA, the firm based in Caracas, did not immediately reply to a request for their comment.
One union leader, Ivan Freites, is a harsh critic of PDVSA. He said that roughly 600 employees are being terminated in Zulia state alone. Nationwide, Freites said, the number of fired employees was closer to 2,000. A group of Schlumberger employees protested against the cuts on Wednesday in Maracaibo, Zulia’s capital.
The official number of laid-off employees has not been reported, but the cuts could add fuel to the fire already burning across the nation of Venezuela where citizens fight to put dinner on the table in the middle of an increasing food shortage. Triple-digit inflation is yet another prevalent issue in the crisis-stricken country.
According to an employee in the Orinoco Belt, Schlumberger has scaled down the work on most of its projects to refocus all attention on Petropiar and Petromonagas. The former is a joint endeavor between Chevron and PDVSA, the latter is a deal between PDVSA and Rosneft, oil giant out of Russia.
PDVSA is the sole operator of the oilfields in Venezuela that has racked up billions in unpaid bills to its service providers. The debt is the result of cash-flow issues in the midst of a major recession. Eulogio Del Pino, PDVSA president, reported to Reuters in June that his company was nearing a deal to increase services again with Schlumberger. No details on the prospective deal have been released.
According to information acquired by OPEC from Venezuela, the nation’s crude oil output dropped from 2.675 million barrels a day in June 2015 to 2.364 million barrels a day in the same month this year. The decline could aid in liquidating a supply surplus that has had a negative effect on prices.
The reduction of operations by both Halliburton and Schlumberger in Venezuela could open up more opportunities for competitor companies. A source from Schlumberger reported that one PDVSA unit and Bohai Drilling Service would be pocketing some contracts. Bohai is a component of China National Petroleum Corp (CNPC). An official there declined to comment.