Canadian Driller Maintains Venezuela Foothold as U.S. Companies Return
As American oilfield service companies prepare to re-enter Venezuela following recent policy changes, one Canadian drilling company has maintained continuous operations in the politically volatile nation for more than two decades. Ensign Energy Services Inc., headquartered in Calgary, has quietly kept rigs running through years of upheaval and international sanctions that drove most competitors away.
Decades of Persistent Operations
Ensign Energy Services, whose largest shareholder and chairman is Canadian billionaire Murray Edwards, has operated drilling equipment in Venezuela for over twenty-five years. According to recent Baker Hughes data, the company recently accounted for Venezuela's entire active rig count, with crews currently operating two drilling rigs in the Orinoco heavy-oil region of the South American country.
"We're the only Canadian company — the only oilfield service drilling company — operating in Venezuela," said Bob Geddes, Ensign president and chief operating officer, in an interview. "We've stuck through Venezuela, thick and thin, and here we are with a little bit of blue sky ahead."
Changing Political Landscape
The Trump administration issued a general license this week enabling U.S. oilfield service companies to work in Venezuela, easing restrictions that had previously forced major corporations like SLB and Halliburton to scale back or completely shut down their activities. This policy shift aligns with Washington's strategy to revive crude oil production from the beleaguered nation following recent political developments.
Geddes noted that he first realized significant changes were unfolding in Venezuela when a U.S. aircraft carrier appeared in the Caribbean Sea last November. Since then, he has maintained regular communication with the company's workers every couple of weeks.
"They are beaming with what's happening, and the prospect of perhaps a democratic process evolving out of this," Geddes explained. "But I'm always so fearful of blowbacks. You just never know what's going to happen."
Navigating Complex Challenges
Venezuela's oil industry has long been constrained by heavy U.S. sanctions that kept most American companies out of the country. Ensign has managed to continue drilling under a special license issued by the U.S. government to its client, allowing work to proceed despite the broader restrictions.
The Canadian driller is widely understood to be working with Chevron Corp., the only U.S. oil major currently authorized to produce and export Venezuelan crude under a restricted license from Washington. Industry reports suggest other companies could receive similar permissions in the coming months.
"It's not for the faint-hearted," Geddes emphasized regarding operations in Venezuela.
Operational Advantages and Challenges
Drilling in Venezuela requires significantly more advance planning than operations in Canada or the United States, where parts and services can typically be delivered within hours. Newcomers to the Venezuelan market are likely to struggle with logistical challenges including:
- Getting equipment through ports efficiently
- Staffing rigs with qualified personnel
- Maintaining safe and efficient operations
- Navigating complex regulatory environments
"If you were to start up and put a rig into Venezuela — good luck," Geddes remarked, highlighting the difficulties newcomers would face.
Hard-Won Experience
Ensign has accumulated twenty-five years of experience navigating what Geddes describes as a "minefield" of challenges including:
- Complex U.S. sanctions regimes
- Crumbling infrastructure throughout Venezuela
- Dealings with Venezuela's cash-strapped state-controlled oil company, Petróleos de Venezuela, S.A. (PDVSA)
- Political instability and economic volatility
This extensive experience gives Ensign a significant competitive advantage as other companies consider returning to Venezuela's oilfields. The company's persistent presence through decades of challenges positions it uniquely in a market that may see renewed international interest following recent policy changes.
