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Oil and gas adviser to the world Pedro van Meurs draws on international knowledge to help Alaska Larry Persily Petroleum News Juneau Correspondent Pedro van Meurs has advised Alaska on oil and gas tax policy since 1996, using his 30 years of international knowledge gained by helping dozens of nations plan tax policy for exploration and development of their resources. This three-part series starts with the story of how van Meurs got into the business. Parts 2 and 3 will cover his views on world oil and gas markets and Alaska. International oil and gas consultant Pedro van Meurs has been in Mexico while business people were kidnapped, in Bolivia as 25,000 protestors demonstrated in front of his office, driven around burning buses to get to his desk in Guatemala, and been in Africa during coups. But it was his work in the Dominican Republican that made him the most nervous.
Van Meurs, who has advised the state of Alaska on oil and gas tax and fiscal issues since 1996, used to do a fair amount of work for the United Nations. He was in the Dominican Republic in the 1980s, assigned to review the nation’s energy policies and prices. “It was indeed an absolute disaster,” he said, with heavy government subsidies for gasoline, diesel and propane driving the country into serious budget deficits.
After two weeks he gave his report to a Dominican government minister. “My recommendation was very simple. You have to double prices if you really want to do something about the deficit.”
He didn’t know what the government had done about his recommendations when he returned to the country two weeks later. The airport was besieged by demonstrators and he asked the taxi driver why people were protesting. The answer caught his attention.
“Some stupid adviser to the U.N. came in and advised them to double the gas prices,” the driver told his passenger.
Van Meurs, thinking quickly, told the cab driver he was in the country for scuba diving, thinking that a better answer than to announce he was the U.N. adviser — stupid or not.
There was a phone message waiting for him when he got to his hotel. It was from a U.N. official. “What did you do?” the official asked a surprised van Meurs when he returned the call. “The whole country is in ruins two weeks after you left.”
The U.N. official told van Meurs not to say anything as the two men were scheduled to meet with the same Dominican minister who had acted on van Meur’s recommendation to raise gasoline prices. Let me do the talking, the U.N. officer said. But when they met the Dominican official, the minister turned to van Meurs and said, “Now Pedro, we are going to work on the other prices,” raising the cost of diesel.
When asked how the government could consider raising even more fuel prices while people were protesting, the minister answered, “Don’t worry about it. It’s not half as bad as we expected.”
Van Meurs has never returned to the Dominican Republic. Helping Alaska with gas negotiations But he has returned to Alaska several times since signing on to advise the state back in 1996. His latest assignment is to assist the state in its preparations for negotiating a contract with North Slope producers for payments in lieu of state and local taxes if the companies decide to build a pipeline to carry Alaska natural gas to the North America distribution grid in Alberta.
When van Meurs comes to Alaska he brings along his knowledge of oil and gas tax structures worldwide. State officials have looked to his analysis and recommendations to help them draft tax laws intended to retain a fair share of revenue for the state while remaining competitive with other oil and gas opportunities that beckon the industry’s investment dollars.
Van Meurs has worked in more than 70 countries, ranging from Saint-Pierre, a French territory of 7,000 residents just off the coast of Newfoundland, to China, with more than 1.3 billion residents. He has dealt with dictatorships, European social democracies and non-governmental clients such as the First Nations of the Mackenzie Delta.
He enjoys the diversity of his contracts and is proud of his ability to work with a wide variety of political situations, which he said have ranged “from communist countries to Republican senators like Frank Murkowski, the entire political spectrum.”
Van Meurs works only for governments and groups like the First Nations, never for industry. It’s best that way to avoid conflicts between competing companies, he said. An unfinished train ride He got his start with government and part-time consulting work in the Netherlands, then moved in 1974 to Canada to find a job. He had planned to connect with friends and then head out on a cross-country train ride to find work and plan his life. He never used the full ticket.
He got a job at his first stop. “I don’t even remember what I did with it,” he said of the unused portion of the ticket. “It could be I was so happy that I had a job that I forgot .”
His life had changed and he didn’t need to worry about getting a refund on the train ticket. But it wasn’t always that way. Van Meurs was born in the Netherlands in 1942, while Europe still wondered if anyone would ever be able to stop the Nazis.
His parents were artists, his mother a painter and his father a painter and sculptor. “I grew up very, very poor. The war, of course, made us extra poor.” He said he was 12 or 13 years old before eating his first meat. “I can still remember the day I got my first real shoes.”
His 86-year-old mother, who still paints, lives in the house where he was born, which van Meurs describes as a typical 200-year-old house in the Netherlands. He visits her each year, and his home in the Bahamas is full of his parents’ paintings and sculptures.
“I think my parents had really hoped I would grow up as a pianist, but I was really interested in geology.”
That interest propelled him through college and his growing knowledge helped him finance his schooling while he worked part time for the Dutch government. First came a bachelor’s degree, then a master’s, and next a doctorate in economic geology, all the while specializing in petroleum geology. By then, it was 1974 and time to move on.
He had no job offers but that didn’t stop him from flying to Montreal to connect with some Canadian friends. He used much of the $500 he had in his pocket to buy a train ticket to Calgary, figuring he would get out at every stop along the way to look for work. By now, he spoke Dutch, English, Spanish, French and German.
He wasn’t much more than 120 miles down the line when he found work in Ottawa, working for what is now the Canadian Department of Natural Resources. He stayed there four years before leaving the post to set up his own consulting business.
“It was the challenge,” he said of deciding to leave the comfort of a government paycheck. “Maybe because I grew up in such a poor family and always survived. Maybe I’m not as worried about personal (financial) security.”
Big ideas when he was young It’s been almost 30 years since he became a consultant, managing to lose money in only one year. He started with contracts in Central America, Newfoundland and the Northwest Territories. “I was a young man, so I said I’m going to build this big international business.”
Among his U.N. projects was a review of El Salvador’s oil prospects. The poor nation thought — hoped — it had oil off the Pacific Coast. It was not to be. “El Salvador is a hopeless case,” van Meurs said.
By 1980 he had grown to 30 employees. “That was the only year I lost money. I got on a treadmill. I was just trying to find work for people.” He grew smarter and smaller, cut back on his staff and returned to profitability in 1981.
Truth is, Van Meurs & Associates is mostly just van Meurs himself these days, with a full-time office manager, a programmer and an occasional economist helping out.
Van Meurs lived in Ottawa until 1986, when he moved to Calgary. “Calgary is a much easier city to be part of the oil business than Ottawa,” he said of his decision to move west. Van Meurs lives in the air Actually, it would be more correct to say he maintained an office in Ottawa — he lived in airplanes and airports. And that hasn’t changed over the years. He figures he flies an average of almost 25,000 miles per month.
“You lose the whole sense of belonging to a nation,” said van Meurs, who is still a Dutch citizen. “There is not a sense of ever belonging to a particular culture.
“I wouldn’t necessarily swear allegiance to the Dutch queen if I had to.”
He stayed in Calgary until 2001, when he went east and south and moved to the Bahamas, which he described as “the only warm place with excellent air connections.” Those connections and flight times are important to someone who spends so much time in the air. Van Meurs organizes his life to minimize his time aboard planes, pointing out that airports and airplanes are the only things in life that make him unhappy.
He is also quick to point out that while there are no personal or corporate income taxes in the Bahamas, there are high duties on bringing goods into the country and a hefty property transfer tax. The duty on cars is 80 percent of their value. So while people may think he moved there for life in a tax haven, he counters that he calculated his real and hypothetical tax bills this year and discovered he has already paid more in taxes in the Bahamas than he would have paid back in Canada.
“In the end, wealthy people pay more than poor people, and that’s the way it should be.” Not much time for life at home There is a price for his success, and that is van Meurs’ limited time at home. He figures he spends about 30 days a year at his house in the Bahamas, never more than a few days at a time. A side benefit is that his son from Victoria and his daughter from Toronto love coming to visit him in the islands.
Someday, life will change, he said. “Not that I think I will ever retire, but I do believe I am going to reduce my time from 330 days to 300, or even 50.”
One thing that van Meurs does look forward to is losing a few more pounds. A couple of years ago he noticed he was out of breath after getting from one end to the other at airport terminals. Then a heart specialist in Mexico told the 5-foot-10, 260-pound van Meurs he needed to lose weight. He started eating less and lost 50 pounds in two years, with 10 pounds still to go.
During that time, he stayed with his same belt, just pulling it tighter and letting the loose end stick out along the waistband as a reminder of weight loss. He calls it his “trophy belt.”
He figures to hang up the belt when he loses the last 10 pounds, planning to put it on a hook in the bathroom as a reminder.
Next week: World oil and gas prices and market conditions.
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