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PDVSA foreign refineries are hardly profitable
By Marianna Parraga
El Universal
CARACAS
Petroleumworld.com 09 13 07Audited balance sheets for 2006 relative to the subsidiaries of state-run oil holding Petróleos de Venezuela (Pdvsa) that are located abroad accounted for a net income of USD 3.073 billion. This number is well beyond Pdvsa domestic revenues amounting to USD 1.9 billion. However, the numbers of those subsidiaries, most of which work with refining, show that their operations were not as profitable as the operations of other refineries in the world.
In the midst of high oil prices and increasing prices of byproducts from Pdvsa subsidiaries, such as Citgo in the United States and Ruhr Oel in Germany, the net profit stood only at USD 1.641 billion if the grand total is deducted USD 1.432 billion that went to Citgo Petroleum, after pulling out of its partnership with Lyondell Chemical to operate a refinery of 265,000 bpd in Houston, Texas.
USD 1.641 billion was the actual amount that remained in the subsidiaries hands. The proceeds of the withdrawal from Lyondell that was allotted to the National Development Fund (Fonden) resulted in a drop of USD 216 million, or 11.6 percent, compared with the net income of USD 1.857 billion in 2005. Additionally, it accounted only for 2.55 percent of the subsidiaries gross income, which heightened 18.4 percent up to USD 64.3 billion in 2006.
In addition to the input to Fonden after ending with the Lyondell-Citgo partnership, the Venezuelan State eventually received in 2006 as stockholders' dividends USD 870 million from foreign subsidiaries and USD 202 million from domestic subsidiaries, for a total of USD 1.072 billion, slightly below USD 1.074 billion in 2005.
Explosive costs
The balance of Pdvsa foreign subsidiaries was particular to a refinery. While it shows bloated income, it discloses also large outlays and expenditure. USD 61.895 billion was the grand total, a hike of 19.5 percent over the numbers in 2005. This resulted in a reduced profit margin at the end of the fiscal year.The largest item includes purchase of crude oil and byproducts for the facilities operations. Foreign subsidiaries spent USD 53.670 billion in this regard in 2006, USD 19.894 billion of which is related to purchase of Venezuelan crude oil and byproducts. Based on the latter number, it may be inferred that PDVSA supplied to foreign subsidiaries approximately 990,000 bpd. This amount matches with the numbers disclosed recently by the Annual Statistical Bulletin from the Organization of Petroleum Exporting Countries (OPEC).
Translated by Conchita Delgado
El Universal 12 09 07
Copyright© 2007 El Universal. All rights reserved.
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