The Devil's Excrement

As
recently as May 25^th., a Deputy from Chavez’ MVR stated
categorically that the proof that things were back to normal in PDVSA was that the company was going to submit its
financials to the SEC on June 30^th., only twelve months late. The next day the President of PDVSA and Minister
of Oil said he had hired a former Superintendent of Banks to insure the
financials would be handed in to the SEC on time. Well, June 30^th.
went by and the financials were not only not handed in to the SEC, but
reportedly the Government informed the SEC that it will not do it. Apparently
ever!

PDVSA has
become simply unauditable according to today’s El Nacional. The auditors, a
local subsidiary of KPMG was simply unable to complete its work and has yet to
receive any response to the many requests for information. Things are not only
not normal, they are simply absurd, the company’s numbers are unknown and this
simply confirms the many lies we have been hearing about the company’s
production. Moreover, it is perhaps an ironic end to Chavez taking over PDVSA
that his main complaint was always that the company was not transparent, that
the technocrats did not tell the “people” what or why they were doing with the
most important asset the country had.

The
inability of the auditors to complete their job shows the mess the company is
in. Whether there is corruption or not within PDVSA can not even be determined,
since the whole financial structure and supervision of the company is simply
non-existent. Among other pearls, the audit determined that of Cuba’s debt of
US$ 584 million, $478 million was past due, only 30 of the 49 buyers of crude
have confirmed their balances are correct, there are $266 million inn accounts
receivable, $163 millions in unknown receivables, accounts overdue amount to
US$ 874 million, debt with fired employees is unknown, no shareholders meeting
has been held since 2002 and on and on…

The
end
result is that we “the people” have no clue as to how the company is
being run.
The “promises” of completed financials is well overdue and simply the
company
can not borrow funds in the international markets. What a way to
mortgage the
future of all Venezuelans! PDVSA belongs to the Chavistas, not to the
people
and in essence what is being done is to kill the golden goose.
Unaccountability is the name of the game for the Chavistas, but they
don’t even care.

It is easy
to find all of this irrelevant when oil prices are reaching all time highs. But
much like the 2000 stock market bubble burst, so will the rise in oil prices. Economic
cycles are here to stay, the US has been doing well for a while, so has China,
oil inventories are near all time high, but speculators seem to have taken over
the oil markets. It is just a matter of time for us to see $35 per barrel
again, “this time it is different” is always said just before the end of
bubbles. You heard it here first, lower oil prices will be here before the end
of the year. At that time, PDVSA will need funding, but it will simply not be
able to get it. What a sad end for the revolution, they simply did not know what
to do with the flag they waved for so long. History will never forgive those
that turned PDVSA into a black hole and have turned it into a useless carcass.

This entry was posted on July 10, 2005 at 10:44 pm and is filed under Venezuela.