The president of Colombia’s largest private oil producer, Toronto-based Pacific Rubiales, said Friday that output remains “completely normal” despite a labor strike announced Monday by a union representing some of its contracted workers.
In a telephone interview, Rubiales President Ronald Pantin disputed the claims by the head of the striking labor union USO that taking part in the five-day-old strike are more than 4,000 contracted workers, which would equal nearly half of Rubiales’ Colombian payroll of direct employees and contracted workers.
“Zero workers are on strike, we have been fully staffed all week and production is normal,” said Pantin, who in the 1990s was a senior official at Venezuela’s state oil company Petroleos de Venezuela SA, or PdVSA.
Pantin said USO represents no more than a couple hundred of Rubiales’ contracted workers, and said he’s unaware of any of them taking part in the strike.
Pacific Rubiales’s Quifa and Rubiales fields in eastern Colombia, which it operates in a joint venture with state-controlled Ecopetrol, produce more than 240,000 barrels a day of heavy crude, accounting for a quarter of Colombia’s total oil production. But in recent months the Canadian company has occasionally struggled to keep the oil flowing due to protests by both contracted workers and nearby residents who want the company to provide more local jobs.
The protests turned violent last month and forced the company to freeze production for an entire week, which dragged Colombia’s average daily crude oil production down by some 60,000 barrels, to 891,000 barrels a day for September. The company’s share price has also taken a hit, closing Thursday at COP45,920, which represents a 27% decline from the beginning of the year and compares with a 10% decline in the stock exchange’s benchmark Colcap index.
German Osman, vice president of the USO union, acknowledged Friday that Rubiales’s oil production is normal for the time being. He said that of the company’s 1,200 direct employees, none of them are part of the USO labor union.
“The direct employees are the engineers and systems operators, so they’re able to keep up production so far,” Osman said in an interview.
However, Osman reiterated that more than 4,000 of the 8,000 or so contractors that work for Rubiales in less-skilled positions have been on strike since Monday and remain off the job Friday, and said that without these workers, production will soon start to slow.
Osman said that among the most important unionized workers taking part in the strike are the truck drivers that deliver naphtha and other hydrocarbons to the Rubiales fields.
Rubiales produces heavy crude oil that can’t flow on its own through oil pipelines that go from the fields to shipping ports for export. Therefore, the company has to truck in naphtha, a lighter fuel, which it mixes with the heavy crude before sending it in pipelines to the Covenas port on the Atlantic coast.
“If the strike continues, production is going to start slowing down considerably because the company can’t do much without these naphtha delivery drivers,” Osman said.