El Universal reported that the Venezuelan state run oil producing company has witnessed the oil production and exports decrease, while undertakings on oil barrel shipments and debt obligations increase due to funds solicited by Petróleos de Venezuela company.
The Venezuelan oil producing company addresses throughout 2012 the challenge to rise the volume of barrel extraction up to 3.5 million barrel per day, from the current average of 2.9 million barrel per day, which has maintained good momentum yet facing difficulties due to the natural declination of oilfields, the cut in the output of the Organization of Petroleum Exporting Countries and certain issues concerning the crude oil upgraders at Orinoco oil Belt.
The management of Pdvsa's funds by the National Government has led the oil holding company to incur in a debt amounting to USD 34.8 billion, a hike of 40% only in 2011. The debt comprises credit arrangements for a number of projects: core activities, social development and commitments to tasks other than oil drilling. In the financial debt, as of the end of the first half of 2011, a rise of 24% featured in the accounts payable to suppliers, for USD 9.29 billion. This makes quite an impact on the cash flow of the oil sector companies, and mirrors in the implementation of plans and projects on hydrocarbons.
However, as if it was not enough, the tax demands on the oil industry include huge contributions to Mission Housing and the increase of the already huge sum for social development. The biannual report of June 30th 2011 specifies that Pdvsa gave USD 2.38 billion to Great Mission Housing Venezuela and USD 8.48 billion for social development projects, that is to say: a 90% rise versus the number recorded on June 2010, amounting to USD 4.46 billion.
Pdvsa also must fulfill its financial responsibility by making deposits into Fonden bank. On June 30th 2011 by that means a sum of USD 7.28 billion was given to the mentioned bank, in comparison with the much lower number of USD 691 million recorded in 2010.
But Pdvsa receives funding amounting to several USD billions simultaneously from public entities such as the Central Bank of Venezuela or the Bank of Venezuela, in the face of troubles with cash flow that arise out of distortions, such as the payment of the Chinese Fund agreement, under which Pdvsa ships on behalf of the Bolivarian Republic of Venezuela up to 430,000 barrels per day, without obtaining payment in cash. For such volumes, it must pay royalties to the National Treasury.
While a voracious National Executive makes more and more requirements from Pdvsa, oil production has remained around 2.97 million bpd. However, the National Executive has established as an early and new production of oil from the Orinoco Belt. To that end, Pdvsa was granted USD 5 billion. The special allocation must be used to lift the oil extraction and reverse the downward trend of 9% in the oil barrel production.
Furthermore, the need to make investments has hit the operations of refineries, upgraders, terminals and other areas where accidents are more and more frequent, making an impact on the volume of crude oil to be processed or affecting the shipment of oil byproducts.
(Sourced from www.eluniversal.com)
