Pdvsa's productivity falls as payroll swells

Petróleos de Venezuela's payroll has steadily swollen as oil production stagnates.

This situation has affected productivity of the state-owned company in terms of the ratio between the number of workers and the volume of crude oil barrels extracted. This circumstance could aggravate if the number of workers increases as a result of the enactment of the new Labor Organic Law (LOTTT), without this translating into a substantial increase in oil production. 

Swollen payroll

In late-2011, Pdvsa's own labor force totaled 121,187 workers, of which 104,187 are active in oil medullar activities and 17,000 work at non-oil affiliates. Oil production of the state-owned oil company, in turn, averaged 2.99 million b/d in 2011.  

Based on these figures, if the number of workers performing medullar activities is compared with the volume of workers in 2011, an average of 28.7 b/d of crude oil and products were produced last year per each worker engaged in medullar activities. 

However, production volume per worker has worsened progressively. At the end of 2006, before the reversion of the Oil Opening, Pdvsa had a total of 62,816 workers and produced 3.25 million b/d. This results in a ratio of 61.5 b/d extracted per worker in the payroll, i.e. more than twice the figure reported in 2011. Throughout the same period (2006-2011), Pdvsa's payroll of workers engaged in oil activities grew 97%, from 52,816 people up to 104,187 workers last year.

It is worth noting that the share of oil barrel per worker in 2011 is even lower if workers doing non-oil activities (such as Pdvsa Agrícola) are included. This would result in 24.6 barrels of oil produced per each worker employed by the state-owned oil company.

Looking back in the past decade, it can be seen that even in the most conflictive years for Petróleos de Venezuela, that is, 2002 and 2003, the crude oil production volume/worker ratio was higher than that for 2011. 

In 2003, after the purge of 30 thousand workers from the oil industry and when Pdvsa had an astronomic figure of 38,166 contractors, the year closed with an average of 29.7 barrels of crude oil extracted per worker, including the contractors' labor force. In contrast, at the end of 2011, Pdvsa's workers plus its contractors resulted in an average production of 25.1 b/d. 

Commitments to fulfill

Pdvsa will have to face the provisions of the new Labor Organic Law that require the company to eliminate worker outsourcing, thus possibly inflating the payroll further.

Although Wills Rangel, president of the FUTPV national oil and gas workers union has not indicated an accurate figure, sources from the oil union estimated that Pdvsa would have to absorb up to 30 thousand workers throughout the 18 states where hydrocarbon activities are developed, in order to comply with the provisions of the new Law.

Translated by Álix Hernández