An Evaluation of Brain Drain in the Case of the Venezuela's Petroleum Company, Petroleos de Venezuela S. A. (PDVSA)

This case study focuses on the emigration of skilled workers and professionals from the Venezuelan, government-owned oil company, Petroleos de Venezuela, S.A. (PDVSA) and the resulting brain drain. Brain drain is first defined then relevant historical, political and economic information about Venezuela and PDVSA and data on migration are presented. Greatest attention is paid to the time from 1999, when Hugo Chavez assumed the presidency, to the present (most recent data available). The policies and actions of the Chavez regime, especially in reaction to the general strike of 2002-2003, are reviewed and their effects on the skilled workers and professionals at PDVSA and how those factors may have precipitated the migration of former PDVSA employees are considered. Causes of the unprecedented situation at PDVSA are grouped into factors that may have “pushed” former workers to migrate (e.g., loss of job opportunity, political instability) and those that may have “pulled” them (e.g., international demand in the oil industry for skilled workers). The topic is particularly intriguing because by 2003 the price of oil had started to rise sharply, crossing over $100/barrel in 2008, and it has (other than during the financial crisis of late 2008 and 2009) generally maintained high levels, bringing an inflow of revenues with no precedent in Venezuela’s history. Therefore salaries were presumably high when the migrations were also high. This scenario is not what some of the most well accepted theories on international migration (notably, Neoclassical) would predict, and the case study data is considered against several prevalent theories (Neoclassical, New Economics of Migration, Network, Cumulative Causation). Finally, the effects on PDVSA and Venezuela are reviewed and information indicating the current status of the skilled workers is presented.