PDVSA, Venezuela’s state-oil company, is losing workers by the thousands, with as many as 10,000 leaving the company in just one week of January, media report, citing protests against low wages and the growing risk of accidents due to lack of equipment maintenance. The situation, according to Univision, has escalated to such an extent that PDVSA’s board of directors has stopped accepting letters of resignation.

Venezuela’s main source of revenues, PDVSA, today produces around 1.6 million barrels of crude daily, the lowest in 30 years and down from 3.8 million bpd back in 1999 when Hugo Chavez came into power. Now, pressured by a deteriorating economy and sanctions, the oil company has no means to maintain its equipment and production, and it can’t hold on to its workforce.

As of August 2016, there were 143,000 people working for PDVSA. That figure has dwindled significantly, with the 10,000-weekly exodus representing 7 percent of the August 2016 figure. A regional oil and gas trade union leader told Univision that the workers no longer cared about receiving a severance package when they quit, as their salaries have become chump change amid inflation that has soared to ridiculous heights.

One Venezuelan oil analyst noted that this is the first exodus of such proportions, not just in Venezuela but in the history of the oil industry. What’s perhaps worse than the scale of the problem is the qualification of those that are leaving, no longer just common laborers but engineers with years of experience. This will further harm PDVSA, which is already struggling. Related: Shale Industry May Finally See Some Profits

In late January, Venezuela’s oil minister said that it could “can easily manage” an oil production increase of 1 million bpd this year to lift its production capacity to 2.472 million bpd. But last year the country sitting on the world’s largest oil reserves saw its crude oil production drop by 649,000 bpd—a 29-percent annual plunge—and probably the worst loss of oil production in a single year in recent history.

Now that PDVSA workers are leaving in droves, if we are to believe the media reports, the production increase Manuel Quevedo told S&P Platts about looks increasingly unlikely.

By Irina Slav for Oilprice.com

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