Fort McMurray a long way from Venezuela

Members of country’s oil elite make the trek north

Fort McMurray a long way from Venezuela

B Y C L AU D I A C AT TA N E O in Fort McMurray, Alta.

The fork in the road that took electrical engineer Cesar Mogollon to Fort McMurray began 7,000 kilometres away in the Venezuelan city of Valencia, where the tropical climate rarely budges from 30 Celsius, and his middlemanagement job with the national oil company had always seemed secure, underpinned by the country’s immense hydrocarbon wealth.
But two years ago, Mr. Mogollon joined a two-month opposition strike against leftist President Hugo Chavez that shut down a large part of the industry. Life as he knew it came to an end.
He was fired, along with his wife, an information technology specialist, and 22,000 other employees, or about 70% of the workforce of Petroleos de Venezuela SA.
Like many others, he found out about his dismissal through daily newspapers, where the government published long lists of PDVSA employees purged from their jobs. From a member of the Latin American country’s affluent oil elite, Mr. Mogollon, 41, found himself an outcast. He was also barred by the government from taking jobs with any of the foreign oil companies active in Venezuela. He lost his pension and life savings, which were held in the company’s savings plan. He was refused basic government services.
“It was really hard,” said the mild-mannered, Louisiana-educated father of two. “We couldn’t even go back to the office to collect our belongings, including pictures of my family, diplomas and training certificates. I had a lot of personal things there, after 16 years.”
Last spring, as oil prices continued to climb amid tight global oil supplies, Mr. Mogollon was one of more than 1,100 unwanted or disillusioned Venezuelan oil workers who responded to a newspaper ad for opportunities in the Canadian oil industry by the oilsands miner, Suncor Energy Inc. He was hired as a project manager, and last month Mr. Mogollon joined a new wave of Venezuelan oilmen that are making the Northern Alberta oilsands capital their home. Here, highly paid jobs are sprouting by the thousands from huge plant expansions and new projects. They have been increasingly hard to fill with Canadians daunted by the area’s remoteness, the tough and dark winters and the high housing prices. “We really like the idea of living in a small town,” Mr. Mogollon, proudly sporting his first winter jacket, said in an interview this week at Suncor’s bustling oilsands plant. In Fort McMurray, he said, “We can go back to the business that we love.”
With the largest conventional oil deposits in the Western hemisphere, Venezuela is the world’s fifth-largest oil exporter. Its oil industry is the backbone of the economy, accounting for a third of gross domestic product and half of government revenue.
Venezuela also holds vast bitumen deposits in the Orinoco belt that are akin in size and quality to the heavy oil found in Alberta’s Athabasca region, making parts of the two oil sectors’ infrastructure similar and the skills of their workers transferrable.
Mario Ochoa, 32, who was a mechanical engineer for a joint venture between PDVSA and the China National Petroleum Corp. aimed at enhancing Orinoco heavy oil production before joining Suncor last month, said the main difference in the two sectors in bitumen extraction.
Venezuelan heavy oil is produced from wells after injecting diluent into reservoirs, while Canada’s, which is mixed with sand, is mined. In both basins, the bitumen is upgraded, using similar technology, for export primarily to the United States.
More than half of Venezuela’s oil is produced by the national oil company, which, until the mass firings, was a national powerhouse that employed the country’s best and brightest.
But the populist Mr. Chavez, who revels in anti-American rhetoric and has been re-fashioning Venezuela, according to critics, into a Cuba-style dictatorship, was unhappy with the oil company’s independence and market-oriented thinking.
Since his election in 1998, he took steps to take over its controls — and cash — to fund his political agenda, leaving less money in the company’s hands for investment. The company’s subjugation was completed last month, with the appointment of Rafael Ramírez, the Ministry of Energy and Mines, as its president.
Ana Sanchez, 30, a chemical engineer with a Master’s degree in energy and the environment from Italy who was fired from PDVSA’s research arm — along with 94 PhDs — said oil workers walked off the job because they disagreed with government interference in what had been a world-class, wellrun oil company.
“I was there to work, and I did not want to get involved in politics,” said Ms. Sanchez, who moved to Fort McMurray last month with her husband, also an engineer, after being recruited by Suncor. “I knew at that time that there was a big risk that I could be fired. But I was very sure about what I was doing. Your personal beliefs are more important than your personal economic wellbeing.”
For his part, Mr. Chavez, a former paratrooper with a humble background, displayed little sympathy for those he fired, portraying them as a snobbish, insensitive “mafia” whom he accused of plundering the country’s oil wealth while turning their backs on the poor, according to news reports.
He replaced them with junior workers, retirees and government troops, causing the country’s oil production to fall dramatically last year and shrinking the econony by 9.2%.
While the country claims oil production has recovered to 3.1 million barrels of oil a day, former employees say it’s closer to 2.6 million, and that lack of expertise has resulted in massive damage to infrastructure and reservoirs.
“Most of the operators didn’t go on strike and kept their positions,” allowing production to continue, said Mr. Ochoa. “But their supervisors, management who had the real knowledge in the plant, were fired and this knowledge was lost.” The purges didn’t go unnoticed at Suncor, where Marion Boyd, manager of human resources, had the gargantuan challenge of filling hundreds of positions to fuel the company’s continuing expansion. The first company in Canada to make a business out of separating bitumen from sand and selling it as synthetic oil, Suncor’s recruitment efforts have became more difficult in recent years as more oil companies built competing oilsands operations in a tight job market.
Suncor is working on a phased strategy to double production to 550,000 barrels a day by 2010 to 2012.
“We had hired a few people from Venezuela [in the past] in our upgrading area, and they were working out very well. I thought, there are so many talented and skilled people in Venezuela who aren’t working and who would fit into our work environment so well, and that is why we decided to try Venezuela,” she said.
Ms. Boyd said she was pleasantly surprised at the huge response to Suncor’s ad in Venezuela for engineers, project managers, operations and maintenance supervisors, cost estimators and planners. A similar ad in Canada would have drawn 20% of the responses, and many would not have met minimum requirements.
After two phone interviews with short-listed candidates, one to assess fluency in English and the other technical skills, a company team flew to the country to interview 60 finalists. It offered jobs to 33, at salaries Ms. Boyd said were comparable to what they were earning in Venezuela.
Suncor had to obtain Canadian government permission to recruit in the country and prove the jobs could not be filled with Canadians. “The quality of the skills was very high,” she said, thanks to the large amounts spent by PDVSA on employee development, which often involved assignments with foreign companies to upgrade skills and opportunities to obtain graduate degrees abroad.
Two other companies with oilsands operations, Canadian Natural Resources Ltd. and Shell Canada Ltd., are also recruiting in the country. One of them, Canadian Natural, has said it will bring in large numbers of foreign workers if necessary to help build its $10.6-billion Horizon oilsands project.
The move to Fort McMurray was not a hard sell, Ms. Boyd said. “People were very, very motivated. Canada has a great reputation. Hopefully, they will stay here for their career.”
If they are culture- or weathershocked, cold or homesick, the new arrivals aren’t showing it.
They play up the friendliness and small-town feel of Fort Mc-Murray, located a four-hour drive from Edmonton on the way to the Northwest Territories.
They feast on the region’s deep blue skies and snow-dusted boreal forest.
Last weekend, they attended a company-sponsored open house on how to survive a Northern winter, where they learned about furnaces, block heaters, crosscountry skiing, winter driving, black ice and toques.
“The winter, the thing is to try to enjoy it,” said Ms. Sanchez. “I saw the people skating. It’s really magic.”
Meanwhile, after experiencing their first cold snap last week, when the temperature dipped to about -40 Celsius, they tell people back home the weather is bearable.
“The temperature is the same,” jokes Mr. Ochoa. “The only difference is the minus.”
They also predict that more Venezuelans, demoralized by lack of opportunity and the state’s tightening grip on their industry, will make their way to Alberta’s oilsands.
Mr. Mogollon said happiness in Fort McMurray comes down to a positive attitude.
He points to the book by Harvey MacKay he discovered last week in the public library, entitled We got fired! And it’s the best thing that ever happened to us. “I’m a believer in that,” he says, vowing to stay until his hair turns white, like the snow.
Financial Post
[email protected]

PHOTOS BY CLAUDIA CATTANEO / NATIONAL POST
Venezuelan oil workers at Suncor’s project, Mario Ochoa, from left, Ana Sanchez and Cesar Mogollon, are slowly accommodating themselves to the frigid temperatures of Fort McMurray.