Minister Ramirez did not even mention once in his now infamous speech, that people
had to work harder, or make PDVSA more efficient. It was all politics as usual
in the new “red, roja…rojita” PDVSA of Ramirez.
So, we sit
here still waiting for the company’s 2005 audited financials or 2004 ones for that matter. In
both cases we saw a supposed glimpse of the financials in press conferences and
full page ads in the papers, but there is as yet no published audited financial
statements from KPMG in print despite the promises. Score a negative point for
the “Roja, roja…rojita” PDVSA of Ramirez’ dreams and nightmares.
without a full audited financial statement there is not much you can say, but
there are some things you can find that simply don’t work out. Toby Bottome of
Veneconomy has done a lot of this digging, doing an outstanding job as usual, here are some of his highlights:
to the overview of the financials published, domestic consumption in 2005 was
506,000 barrels per day. This is somewhat strange, you see in 2001, a full four
years earlier and with gas more expensive in real terms and half a million cars
less on the roads, Venezuela had an average consumption of 458,000 barrels per
day, which makes little sense. Even worse, “domestic consumption” has always
been very simple to calculate, you subtract exports from production and except
for minor adjustments you get the right number. Well, this rather simple
formula does not work in 2005, as you get 281,000 barrels per day of local
consumption which is simply non-sensical.
can either assume the numbers are fudged or as Toby himself suggests, this is simply
a reflection of the fact that Venezuela
is importing significant volumes of oil or gasoline to satisfy the local market
due to production or refinery problems.
another negative one for the Roja, rojita…
claims that it is producing 3.27 million of barrels of oil a day in order to
make it look as if the country’s production was not affected by the strike. However,
this includes production figures for NGL and orimulsion production which was
never included in the old numbers. But let’s see what the company’s production
to PDVSA, the average export price for the company was in 2005, US $46.15 per
barrel. You may think that this should be enough to figure out how much the
company’s revenues were in 2005, but it isn’t. The reason is simple; PDVSA has
offshore operations which consolidate in the revenues. Thus, in the absence of
a breakdown, you can fudge the numbers by passing them from one side to the
calculation does that. It figures out that if one believes PDVSA’s numbers at
face value (Production and export figures were provided by the Ministry to the
auditor but not necessarily audited) then export revenues were US$ 31 billion,
which seems about 380,000 barrels or US$ 6.4 billion too high to be consistent.
But you see, there seems to be a shortfall of roughly the same amount in
offshore operations! Thus, global sales are right, but not exports, cute, no? In
fact, earnings reflect the same problem; despite 40% higher prices offshore
operations only earned 20% more, which makes no sense.
Total investment was US$ 3.88 billion of which only US$ 2.83 billion was in
exploration and production, well below the announced budget and considered not
to be sufficient for sustaining production. Moreover, this is absolutely inconsistent
with increasing production to 5 million by 2012.
table summarizes production levels since 2001, so that people can clearly see
the loss of production even with the lying included!
2001 2002 2003 2004 2005
PDVSA own 3.21 2.71
2.38 2.62 2.67
PDVSA share assoc .05
.11 .17 .21
Assoc .14 .14
Total 3.40 2.97
2.81 3.15 3.27
As you can
see PDVSA’s own production has fallen by at least half a million barrels since
2001, even if you believe official figures, which the numbers do not bear out. What
has saved the day are the 600 thousand barrels a day of the associations which
were all ready and set before Chavez took over in 1998.Not another triumph for the
Even if Ramirez did not mention it, let’s see how efficient the “roja, roja…rojita”
PDVSA is. Well, to produce less oil, PDVSA spent US$ 3.29 billion more in 2005 in
administrative and selling costs than in 2001, despite the lower investment.
much more, but these tidbits clearly show there is little to be proud of, no matter how deep the red color goes.