Why Hugo Chavez (alive) is good for Canada’s oil sands – by Claudia Cattaneo (National Post – March 16, 2012)

The National Post is Canada’s second largest national paper.

CALGARY • It’s been almost a decade since scores of highly skilled Venezuelan oil workers like Petro Pereira, fired and blackballed by dictator Hugo Chavez for protesting his tightening grip on the national oil company, made their way north to Alberta.
Today, word that an aggressive cancer may soon put an end to his dictatorship and potentially reactivate Venezuela’s once-mighty oil industry has many reassessing the future.
Mr. Pereira, a world expert on heavy oil who is now a scholar at the University of Calgary, is so engrossed in research to improve oil sands upgrading he plans to stay put.
But the state of Mr. Chavez’s health is a hot topic in the colony of expats, and many are talking about returning if there is regime change in the South American country, he said.

“Honestly, people were very reluctant to come [to Alberta], and finally came because they were starving,” said Mr. Pereira, a UC Berkeley, Calif.-trained scientist who was responsible for technology strategy at Petroleos de Venezuela SA (PDVSA) when he learned in the newspapers he had been let go.
“Nobody would give them a job,” he said. “We were kind of pariahs.”
An estimated 3,000 Venezuelans migrated to oil jobs in Calgary, Fort McMurray and Edmonton after the dictator purged 18,000 from the national oil company — nearly half its workforce — for going on strike in the fall of 2002.
Venezuelans in Alberta are not the only ones pondering a future without Hugo Chavez.
Discussion is intensifying in North America about what will happen if Mr. Chavez is no longer at the controls of South American producer, a member of the Organization of Petroleum Exporting Countries and the holder of the world’s second-largest oil reserves.
There is little official information about his health, but experts such as Roger Noriega, a former advisor to George W. Bush, say he has terminal cancer in his prostate, lymphatic system, colon and bones. First discovered last June, the cancer was believed to be in remission after chemotherapy in Cuba, but Mr. Chavez, 57, recently returned to the country for radiation treatment. Some give him as little as six months to live.
If a change at the top means a strengthening of Venezuela’s once-powerful oil industry, Canada’s oil sands could be deeply affected. A Venezuelan revival would mean renewed competition with Canada’s oil sands for investment, U.S. market share and expertise. Indeed, all this is playing out as oil sands producers aim to capture heavy-oil refining capacity in the U.S. Gulf Coast that was specifically designed to handle Venezuela’s heavy oil. Their push has been scuttled by the delay until after the U.S. presidential election of the proposed Keystone XL pipeline.

Oil exports to the United States have plummeted as part of Mr. Chavez’s strategy to reduce dependence on that market, while those to China have soared.
“Of course Venezuela has tremendous potential, much like Alberta,” said Fred Cedoz, vice-president at the Washington-based policy research firm Global Water & Energy Strategy Team (GWEST).
“The thing I would be most concerned about as an Alberta producer is that Venezuela has all this resource and in the right economic environment and investment climate, all that crude would flow to its most natural buyer … the U.S.”
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/03/16/why-hugo-chavez-alive-is-good-for-canadas-oil-sands/?__lsa=bf2638a3

Comments are closed.