The
major discrepancies contained in PDVSA’s Earnings
and Losses figures for 2005 announced by the Ministry
of Energy and Oil and on which VenEconomy commented
this Monday, October 9, are not the only ones, sad to
say.
The figures published by the MEP reflect many other
discrepancies and inaccuracies. One aspect of the 2005
figures questioned is that investments were insufficient
and incomplete. Investments recorded came to $3.8 billion,
only two thirds of the $5.87 billion slated by PDVSA
for 2006.
Worse still is that, according to Minister of Energy
and Oil (and president of PDVSA) Rafael Ramírez,
of those $3.8 billion, only $2.83 billion were invested
in production and PDVSA Gas (73% of the total); that
is not even 50% of the sum planned for 2005. What is
more, the investments planned for 2006 are significantly
less than the $7.67 billion included in the first phase
of the “Sow Oil Plan,” which makes the goal
of $10.20 billion planned for 2007 seem to be way out
of reach.
With these pyrrhic totals, it is going to be impossible
for PDVSA to manage to produce the 5.8 million b/d included
in the “Sow Oil Plan” for 2012.
If there was still any doubt about the slow pace of
investments, this was abolished with the news that,
as at September 2006, PDVSA had only 81 drills operating;
and while that is 18 more than it had in 2005, it is
between 20 and 25 drills fewer than are needed in order
to meet the 2006-2012 expansion plan.
Besides, consideration should be given to comments by
some analysts who point out that the ratio of the number
of active drills to new production capacity is not what
it once was, mainly due to the inefficient use of the
drills. This lack of skill is caused, in turn, by the
absence of the know-how, technology, and experience
of the 20,000 plus professionals and technicians who
were arbitrarily dismissed for political reasons in
2003.
By way of corollary, it is worth noting that, according
to the MEP’s figures, PDVSA’s earnings in
2005, before royalties, taxes, and dividends, were $32.54
billion. Of that amount, $19.14 billion went to the
government in royalties and taxes and $6.9 billion of
the remaining $13.4 billion (just over half) were allocated
to “social development.” In other words,
in 2005, an equivalent of Bs.14.86 trillion of PDVSA’s
revenues went on social spending subsidized by PDVSA,
approximately 20% of central government’s social
spending for that year.
It may seem “wonderful” that the government
is allocating such huge sums of money to social investment;
what is not so “wonderful” is the way in
which that money is being channeled through a black
box that is quite impossible to audit. If these funds
were to enter the Treasury in the form of taxes or dividends
and the government were to then request authorization
from the National Assembly to invest in social programs
using clearly identified items for which there would
be full accountability, then things would be very different.
PDF/pdvsa
2005 financials.pdf
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Editor's
Note: This commentary was originally published by VenEconomy,
on 10/11/2006. Petroleumworld reprint this article in
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