PDVSA 2010 financial report:
Travels through a desolate fantasy land
Gustavo Coronel, a former director of PDVSA, has gone through the Report and Accounts 2010 presented by PDVSA to the National Assembly with a fine-tooth comb and come up with an analysis, which he entitled “ Viaje por un país desolado y fantastico ” (Travels Through a Desolate Fantasy Land).
VenEconomy has taken some abstracts from Coronel's summary of this unbelievable and revealing Report and Accounts of a PDVSA in ruins.
To begin with, PDVSA is defined as “…a driving force of the Venezuelan economy and a fundamental tool in the building of 21st Century Socialism ,” proof that “PDVSA has lost its legitimacy as an oil company and has become a mere instrument of domination wielded by a corrupt oligarchy.”
Here are just some of the many outrages committed in the management of PDVSA that are included in the Report and Accounts and were highlighted by Coronel:
1) The signing of irresponsible agreements with companies in Vietnam, Cuba, Angola, and Belarus for exploiting Venezuelan oil fields. Coronel states that this is “treason against the nation, as none of these companies have the know-how, management or sufficient capital to offer Venezuela any added value.”
2) A plan of investments in oil which, after deducting allocations to the food sector, the nonoil sector, electricity projects, and “other” investments (which no one knows what they are), has only US$9.31 billion left for investment in oil, when what is required is a minimum of US$20 billion. He compares this figure with the US$34 billion (nearly four times more) that ExxonMobil would have invested in 2010.
3) “A debt/asset ratio of 17%, which sounds good.” Coronel notes that this “is due, among other things, to the fact that the Chinese loans, amounting to US$28 billion, are not included.” “If those debts with China are included on its books, this ratio goes up to more than 30%, the limit of its borrowing capacity.”
4) Moreover, PDVSA reports that, in 2010, it paid some US$2.5 billion on account of that debt; and Coronel wonders, if it isn't PDVSA's debt, why is it paying it?
5) According to the Report and Accounts, PDVSA, with 64 active drills, apparently drilled 3,778 wells during the year. This would be a mammoth feat impossible to perform, as it would mean that they drilled “59 wells per drill, in other words, more than one well drilled a week.”
Lastly, Coronel states that the Report takes 49 pages to narrate “with surprising candor” “the numerous obstacles that have prevented the company from doing a good job.” This is a self confession that “an inept management and a President of the Republic that has used the company for his own purposes” are responsible and solely to blame for PDVSA's bankruptcy and demoralization.
Coronel calls for “the immediate dismissal of PDSVA's board of directors and an in-depth investigation into the true situation of the company's operations, finances, and management.”
Gustavo Coronel : PDVSA 2010: Fraud, mismanagement
Gustavo Coronel: El Viaje por un País Desolado y Fantástico :|
La Memoria y Cuenta de PDVSA, 2010
PDVSA 2010 Annual Report (Spanish )
VenEconomy has been a Venezuela's leading specialized publisher on financial, political and economic data since 1982. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.
Editor's Note: This commentary was originally published by Veneconomy , on March 25, 2011. Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 03/28/2011
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