Symbol Searched: BPILF
12/26/96 French Grandmother Brings Labor Peace To Guatemala
Jungle
By Joel Millman
Staff Reporter of The Wall Street Journal
PETEN JUNGLE, Guatemala -- The Bell helicopter clatters in low
above the trees and spirals down to the landing pad, as some 300
grim-faced men and women look on nearby. Some carry pistols or
rifles. Hand grenades dangle from belts and shirts.
The chairman of Basic Petroleum International Ltd. steps out
of the chopper steel-faced, adorned with impeccable shoes and a
Hermes scarf. She is a 66-year-old French grandmother named
Gilberte Beaux. Three days ago she was in Paris. Today she is in
the sweltering Peten to mediate a fight.
"I can understand that the workers are upset. Some of their
demands are reasonable," Mrs. Beaux says. "Some, of course, are
completely unreasonable."
Breaking down seemingly insurmountable obstacles with flair is
something that comes naturally to Mrs. Beaux. In 1950, she was
admitted to France's leading business school, the Institut
Technique du Banque. Four years later, she became its first
female graduate. For 19 years, Mrs. Beaux worked as top adviser
to British corporate raider Sir James Goldsmith. Along the way
she dealt fishing concessions in the Ivory Coast, oil in Algeria
and real estate in Russia. She engineered a turnaround of Adidas
AG, the sporting-goods giant.
Labor disputes in the Peten, however, have unique challenges.
The dense vegetation of the jungle between Mexico's Chiapas
state and Belize has long been a refuge for some of Latin
America's most intransigent guerrilla bands. In 1991, guerrillas
operating in the northwest corner of the Peten sacked and burned
Basic Petroleum's most productive wells, destroying millions of
dollars of machinery.
Since then, sporadic protests supported by the guerrillas have
resulted in sit-down strikes that closed truck traffic, forcing
"Basic Pete," as the company is known to oilmen, to temporarily
halt production. A recent peace accord, expected to be signed
Sunday, is so fragile that the Guatemalan government asked Mrs.
Beaux to settle the dispute before the woes of a few jungle
truckers became a pretext for renewed war.
The most recent strike began over the opening of Basic Pete's
new oil pipeline, the first ever linking Guatemalan oil fields
to coastal refineries. It cost Basic Pete more than $18 million
and nearly a year of bushwhacking to carve the line out of the
tangled vines. Its completion will cost the 60-odd truckers
their livelihood but save Basic Pete at least $10 million a
year.
Basic Pete is Guatemala's only oil producer, pumping about
half the country's needs and paying about $5 million annually to
the government in royalties. The wells are located deep within
terrain thick with jaguars, malaria-bearing mosquitoes and
swampland with the suction pull of industrial vacuum cleaners.
Pipeline workers recently uncovered a nest of 22 eight-foot
"yellow-beard" vipers, snakes so deadly that "you won't live 15
minutes if one bites you," says Aaron White, a Basic Pete
engineer.
Mrs. Beaux's negotiating team is bolstered by an army colonel,
government officials and observers from the United Nations.
Armed only with Mrs. Beaux's negotiating skills, they emerge
from a steamy shed after 14 hours with a settlement. "My men
broke for lunch, but I just kept on going," she says with a
laugh.
The terms were straightforward. Instead of retaining truckers
in make-work jobs, Basic Pete proposed a severance package of
about $1,000 per driver. And, with the government's
representatives signing on, Mrs. Beaux threw in a sweetener: a
commitment to pave 500 kilometers (about 310 miles) of jungle
roads, doubling the region's total, by the end of the century.
"More paved roads, more work for the trucks," a driver named
Hector Castillo reasoned when told of the deal.
In its way, Basic Pete is a throwback to the days of colonial
capitalism, when brave explorers hacked fortunes out of the
jungle. Basic Pete has not only stumbled upon oil, but upon lost
civilizations. The company keeps two archaeologists on the
payroll, and in 1995 discovered the Mayan city of La Joyanca.
Fearing vandals, Basic Pete has shared La Joyanca's exact
location only with the government.
Although Basic Pete has been operating in the Peten since the
mid-1970s, it had never made a profit before the Beaux team took
over. It had, however, managed to accumulate massive debts, a
big chunk of which was held by Mr. Goldsmith's holding company,
Generale Occidentale Groupe of Paris, of which Mrs. Beaux was
general manager. When that debt was converted into equity in
1988, Generale Occidentale became the controlling shareholder,
and Mrs. Beaux became Basic's boss.
Today, Basic Pete operates exclusively in Guatemala, although
drilling elsewhere is in the company's future plans, and the
firm is run from Mrs. Beaux's offices on Paris's Champs-Elysees.
The company's revenue has more than tripled since 1992, to $81
million. Net, meanwhile, has soared more than 450%.
When Mrs. Beaux took over Basic Pete, international oil
companies had abandoned Guatemala. Texaco Inc., which found the
first well in the Peten, left in the early 1980s. Exxon Corp.,
Amoco Corp. and Shell Oil Co. pulled out, too. Drug traffickers,
guerrilla war, distances from the wells to the port, the
intransigence of Guatemala's bureaucracy and high staffing costs
were among the many problems.
To lower costs, Basic Pete concentrated on training
Guatemalans to handle most of the work. Today, of 40 drill
workers, all but four are locals who earn no more than $1,500 a
month, a pittance compared to what the major oil companies pay.
Basic Pete also discovered a way to placate guerrilla groups.
The company convinced the government that it could execute rural
development better than any state enterprise. Basic takes credit
for drinking-water projects, schools and roads, while deducting
its expenses from royalties owed to the government.
There is less bureaucratic delay when "the people ask Basic"
for services, explains Francisco Arevalo, a former air force
major and current vice minister of energy. "They have to pay us
anyway, but this just gets the job done faster." Mr. Arevalo
says such expenditures lately have been running at a rate of
about $1 million a year.
With peace on the horizon, Basic Pete now sits on the brink of
what could be Latin America's next oil boom. Guatemala is
inviting more companies to drill for oil, but Basic Pete will
have the only pipeline.
"Not a bad position to be in," says Mrs. Beaux, examining the
label of an imported cabernet over dinner in Guatemala City.
"Don't you think?"
(END) DOW JONES NEWS 12-26-96 |
