15 years after Hugo Chavez took his prosperous oil field services business from him, Jesse Cole is on his way back to Caracas. Undeterred by even the earthquake that has closed the airport he is trekking back via Bogota to Valencia and then by car to Caracas where he will set up shop.
Sky Drop Capital, the firm he is starting with one partner, has already begun raising its $250 million infrastructure fund to provide as he describes “the picks and the shovels” needed for the rebuild.
Born and raised in Western Canada, Cole is a third-generation oil man who grew up with heavy oil as both a family legacy and a practical education. The oil patch was his classroom: summers on the rigs, learning the realities of heavy oil, power, logistics, and the brutal arithmetic of field economics..
Straight out of the University of South Florida, instead of taking the corporate path, he joined with three executives who worked at Weatherhead, a leading oil services company to form a new company with an ambitious idea: use Venezuela as a launchpad for a global oilfield services and manufacturing platform, drawing on expertise from Western Canada and West Texas and applying it to one of the most complex heavy-oil environments in the world.
The areas of focus for the Sky Drop Capital Fund.
From that modest start, the team grew the business into a 250-employee, five-country operation. The company’s flagship asset was a 90,000-square-foot manufacturing facility in Venezuela, built to produce PC pumps, downhole equipment, driveheads, and oilfield service gear for heavy-oil wells. They expanded operations into Canada, Oman, Colombia, and other markets, providing a “full solution” for fixing broken oil wells and supporting heavy-oil production globally.
Then came the turn. Starting about 2009 when the Chávez government tightened its grip on the economy, the regime moved against private industry. They saw the writing on the wall—supply chains choked, sister companies were taken over, and operating conditions deteriorated month by month. Eventually, the Venezuelan government expropriated their Venezuelan operations outright. They lost the entire manufacturing base and years of investment in-country. It was, in practical terms, a total loss on Venezuela. That was 2011.
He walked away from a facility he had helped build from scratch—machines on the shop floor, teams he’d trained, product lines he’d scaled—handed over to a government that simply took it.
This is why, today, he can be accurately described as “the gringo whose business Chávez took—and who is still going back.”
It all started January 4th of this year when he received about 50 calls from people in the oil business to get his thoughts and plans. He viewed Venezuela as the greatest opportunity he would see in his lifetime to take his decade of additional experience in Western Canada, West Texas, the Middle East, and Asia, and a stint in distressed debt—where he specialized in $100–$400 million situations across multiple industries—to re-enter Venezuela.
His fund, Sky Drop Capital is a 250 million infrastructure fund to provide the “picks and shovels” for the emerging oil industry. It is built around his expertise in the oil field, distressed assets and Venezuela. Undeterred by the earthquake, Cole arrived in Caracas last week to set up shop and has already been hard at work. We will follow his progress with great interest.
See also the article about Sky Drop. LINK.
And an interview with Mr. Cole to learn more. LINK
