Op-Ed
Commentary
Gustavo
Coronel :Petroleos de Venezuela:
Chavez’s financial punching ball
During
the last three or four years Petroleos de Venezuela has been used
by the Hugo Chavez regime in a variety of ways, sometimes even
as an oil company. Other roles include the source of financing
for social programs that are not provided for in the official
national budget (there are three or four parallel budgets in existence)
and, more recently, as a borrower of substantial amounts of fresh
money for Chavez’s grandiose projects in Venezuela and abroad.
Petroleos de Venezuela is being milked by Hugo Chavez to provide
money for the numerous social programs that he improvises, as
he goes, during his TV show “Alo Presidente”. So far,
an estimated $10-15 billion have been illegally siphoned out of
PDVSA to be used in these programs, without accountability or
transparency.
Nobody knows exactly how much money is being diverted away from
PDVSA or what is the use or the benefit of these huge amounts
of money. The disorder prevailing in PDVSA’s finances is
simply monumental. The results of such disastrous handling of
public finances are obvious: PDVSA is producing less oil, maintenance
is down and investments are clearly insufficient to guarantee
that the company can keep providing optimum income for the nation.
As Hugo Chavez is pilfering the financial resources of PDVSA he
has decided that the solution is simple: order PDVSA to borrow
money in the international and domestic financial markets. At
this point in time the company is being ordered to issue bonds
for about $5 billion and to ask for loans for another $3 billion.
This money will not be used for PDVSA’s activities but for
Hugo Chavez’s projects. He is already spending more money
that he is being given and, as a result, he is resorting to the
use of the oil company as a vehicle for government indebtness,
in the same manner the Mexican corrupt political establishment
of the 1960’s and 1970’s abused PEMEX, eventually
producing its financial collapse.
What is taking place at this very moment in Venezuela and in PDVSA
is the unfolding of a major financial crisis, the product of the
disastrous, unchallenged, decisions of one man and of the cowardice,
ineptitude and corruption of his management team. All players
in the Venezuelan petroleum industry should understand this. To
play along with Chavez is to obtain very short-term, illusory
gains at the expense of corporate credibility, ethics and, even,
satisfactory long term financial results.
Gustavo
Coronel is
a 28 years oil industry veteran, a member of the first board of
directors (1975-1979) of Petroleos de Venezuela (PDVSA), author
of several books. At the present Coronel is Petroleumworld associate
editor and advisor on the opinion and editorial content of Petroleumworld.
Petroleumworld not necessarily share these views.
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Petroleumworld
News 03/27/07
Copyright©
2007 Gustavo
Coronel.
All rights reserved.
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