Op-Ed
Commentary
Gustavo
Coronel :
PDVSA' s financial
formula: I+LT=C
I= Ineptness, LT= Lack of Transparency, C= Corruption.
Gone
are the days in which Petroleos de Venezuela rendered clear
account of its financial situation. Today no one knows what
is going on in that black box. The elimination of Financial
Statements
to the Security Exchange Commission of the U.S. and the inability
of the company to publish consistent numbers in Venezuela have
promoted total confusion among those who would like to know
what is going on inside that company.
Last March 15 the Caracas newspaper “Reporte Diario de
la Economia” published the headline: “Petroleos de
Venezuela presents false financial statements”, adding
below that the company had reported losses for almost $3 billion
for 2006. Inside this issue, in page 4, there was an extensive
report signed by Leocenis Garcia, in which three 2006 financial
statements for Petroleos de Venezuela are shown. All three contain
different figures. Hugo Chavez presented one of the statements
to the National Assembly January 13, 2007. The Minister of Mines
and Petroleum, who is also the President of the Company, presented
a second statement January 15, 2007. Still the Vice-president
of the republic presented a third statement to the national Assembly
in February 27, 2007.
However, this was not the end of the story. A
fourth set of financial figures, also non – audited,
were published by the Petroleos de Venezuela on March 23, 2007,
in connection with
an emission of bonds for some $5 billion. This last set of figures
is completely different to the other three. This situation calls
either for financial experts or psychiatrists, probably both,
to make sense of the differences.
The first three statements report a PDVSA income for 2006 of
about $55.5 billion, although the exact numbers are different
in the three statements. The fourth statement reports a PDVSA
income of $101.8 billion, almost twice as large. This is totally
unexplainable, that the president of Venezuela, the president
of the company and the vice-president of the country would have
three different sets of figures, none of which is identical to
the one presented in the publication accompanying the emission
of bonds by the company. The question we ask is: what was the
true income of Petroleos de Venezuela in 2006?
The first three sets of figures mention an investment of $5.9
billion and operational expenses of $8 billion for 2006. The
fourth set of figures speaks of operational expenses of $15.2
billion and do not specify investment totals. Again we ask: What
are the true operational costs of the company?
The first three sets of figures report social contributions
of the company for $9.9 billion while the fourth set of figures
report $13.2 billion in social contributions. This is an enormous,
totally unacceptable difference. This social contribution is
a highly irregular, criminal, action on the part of the Chavez
government since this money is not subject to normal budgeting
procedures and is used by Chavez without accountability or transparency.
The sad reality is that enormous amounts of money that belong
to the nation are being pilfered by the regime.
The first three sets of financial statements report losses for
about $3 billion for 2006 while the fourth set claim a net profit
of $4.7 billion. How can this be?
Even if we assume that the fourth set of financial figures is
correct, we would have to ask why the profits are only $4.7 billion
with a total income of $101.8 billion when in 2001 the profits
were essentially the same with a total income of only $46.2 billion.
How can this be possible, unless something dramatically wrong
taking place within the company or unless the money is being
taken away from the company?
These enormous differences would be enough for the shareholders
of any company to fire the Board and top management. In Venezuela
this is not possible because the Chavez regime controls all political
and administrative organisms in the country. I am a shareholder
of the company, all Venezuelans are, but we do not receive information
on how the company is doing nor can we ask for the removal of
its inept management.
What is worst of all is that the funds being diverted away from
Petroleos de Venezuela are being used without any accountability
since they are not subject to scrutiny by the National Assembly
or by the public at large. Venezuelans simply do not know how
these enormous amounts of money are being spent, although we
are aware that Chavez is giving or promising significant handouts
to friendly foreign governments, such as the ones in Cuba, Nicaragua
and Bolivia, as well as sending billions of dollars in the acquisition
of weapons.
As a result of this disastrous utilization of petroleum income
Petroleos de Venezuela is being under maintained and investments
are not nearly enough to keep the required production levels.
The company is no longer a reliable outfit. In parallel the foreign
oil companies are being harassed and threatened with takeovers
in case they do not bend to the desire of the regime to grab
control without proper indemnity.
Even the logo of the company, which used to be blue, is now
scarlet red, the color of the socialist revolution, the color
used by the worst totalitarian states of the last 100 years.
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.
Fair
use Notice: This site contains copyrighted material the use of
which has not always been specifically authorized by the copyright
owner. We are making such material available in our efforts to
advance understanding of issues of environmental and humanitarian
significance. We believe this constitutes a 'fair use' of any
such copyrighted material as provided for in section 107 of the
US Copyright Law. In accordance with Title 17 U.S.C. Section 107.
For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.
All works
published by Petroleumworld are in accordance with Title 17 U.S.C.
Section 107, this material is distributed without profit to those
who have expressed a prior interest in receiving the included
information for research and educational purposes. Petroleumworld
has no affiliation whatsoever with the originator of this article
nor is Petroleumworld endorsed or sponsored by the originator.
Petroleumworld encourages persons to reproduce, reprint, or broadcast
Petroleumworld articles provided that any such reproduction identify
the original source, http://www.petroleumworld.com or else and
it is done within the fair use as provided for in section 107
of the US Copyright Law. If you wish to use copyrighted material
from this site for purposes of your own that go beyond 'fair use',
you must obtain permission from the copyright owner.
Internet web
links to http://www.petroleumworld.com are appreciated.
Petroleumworld
News 04/12/07
Copyright©
2007 Gustavo
Coronel.
All rights reserved.
Send
this story to a friend
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write
to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE 5.01+
Windows NT 4.0, '95, '98 and ME +/ 800x600 pixels
