Venezuelan riots cause oil giants to relocate expat workers

Published:  27 Apr at 6 PM
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Tagged: USA, South America, Money
The political turmoil in Venezuela is forcing multinational oil companies to reduce the numbers of expat employees in the country.

Venezuela has a large expat community, with the majority of its foreign professionals working for multinational companies in the oil industry. Most live in the capital, Caracas, or in Puerto de la Cruz, Valencia, Anaco and Maracaibo, and the companies themselves are now on edge due to a recent government take-over of the General Motors automotive plant during violent protests.

Venezuela is enduring riots, violence and protests resulting from the brutal, ongoing economic crisis. At the present time, the unrest hasn’t affected operations at the oil fields as most are found in isolated locations, but major companies including Statoil, Chevron and Repsol have been quietly relocating expat employees for some time. According to sources, the relocations are intended to guarantee the safety of expatriate staff, but operations are on schedule and still continuing as normal.

As early as last year, Chevron was advising its expatriate employees with families in the country to transfer to other locations, saying the request was part of a gradual drawdown of expat staff deemed to be at risk due to the worsening situation. The chaos in Venezuela and its effect on the oil sector is typical of the difficulties experienced by oil companies in high-risk states in Africa, the Middle East and Latin America as well as in South America.

Finding expat staff willing to work in strife-prone locations typically involves the payment of premium salaries linked to the risks of working in unstable countries, and it’s normal for oil companies to employ trained security staff to protect workers and their families. Chevron was one of the first to recommend transfers, and the general situation in the country has deteriorated further since then, with daily riots and street violence now the norm.

Although the Venezuelan government takes just limited revenues from the oil companies’ projects within the state-run Petroleos de Venezuela, it depends on the money to keep it functioning during the ongoing economic crisis. The country is South America’s largest exporter of oil, but the oil price crash and high extraction costs have slashed government revenue, leading to difficulties with importing much-needed medical supplies and foreign-made goods.

Although the oilfields themselves have not been affected to date, violence in Caracas is threatening the multinational oil companies’ headquarters, and rumours that military-grade weapons are in the protestors’ hands bode ill for the future.
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