In the last few weeks, a new variable has come up in the controversy over the national levels of oil production, after months during which the political-electoral issue forced a truce in this quarrel, that has occupied so much space in some newspapers as well as in commercial radio and television programs.

After denying -for two years- the oil production figures certified by authorities of Petróleos de Venezuela and of the Ministry of Energy and Mining, some sectors opposed to the National Government have changed their script: It’s no longer about how many barrels are extracted from the subsoil, but about how many perforation units are operating.

Nevertheless, no one from that side of the street can explain how the Venezuelan state owned oil corporation, Petróleos de Venezuela (Pdvsa) has surpassed its goals of fiscal contribution. In only this year’s first semester, fiscal contributions by the state corporation are nearly 90% of the goal established in its stockholders’ assembly.

According to the budget approved for 2004, Pdvsa was expected to contribute around 6.54 billion dollars, or 12,56 trillion bolívares Bs.; equivalent to 33% above the contribution in 2003.
Nonetheless, in only the first semester, this company contributed 5.92 billion U$, which totals 90% of the amount expected for all of 2004.

This figure can be broken down as follows: over 4.34 million U$ in royalties; 217 million U$ in profits; 120 million in taxes to the consumer; 1.23 billion U$ in income taxes (ISRL), and 7 million in Added Value Tax.

But furthermore, in order to complete these accounts, a historic event in the administration of the Venezuelan oil industry should be added: the creation of four special funds to favor the long excluded sectors of the Venezuelan society. Three of these funds have been created to finance social missions: Sucre Mission, to provide access to university education; Ribas Mission, to provide high school education; Robinson Mission, to teach the illiterate to read and write, and the Barrio Adentro Mission, to give free medical assistance. The rest of the funds are intended to support the agricultural sector, as well as housing and infrastructure projects.

These funds total 3.7 billion U$, an amount that Pdvsa would not have been able to afford had it not been for Pdvsa’s keeping up a substantial level of production, regardless of the prices in this very particular year concerning oil issues.

For example, with the 2002 oil strike in Venezuela and the difficulties in Nigeria(another important member of the Organization of Petroleum Exporting Countries) that same year, oil prices soared. Nevertheless, there was little benefit for Venezuela from that event, since its production had been diminished for several months.
According to the official figures, the country currently extracts 3.18 million barrels per day: 2.24 million, are supplied by Pdvsa itself; 532 thousand barrels by Pdvsa business partners in the operational agreements; 538 thousand by the strategic associations (Sincrudos de Oriente, Cerro Negro, Petrozuata,, and Ameriven) that produce synthetic oil out of heavy crude oil from the Orinoco Oil Belt, and 162 thousand of natural gas.

However, as was mentioned above, the problem is no longer the need to admit the “real” number of barrels exported. The focus is now on the activity in the rigs; and although many claim that only 54 units are operating throughout the country, Pdvsa has reported that a total of 100 units (59 for production, and 41 for the rehabilitation and maintenance of wells) are working, and that next year a total of 119 units will operate.

Published in Quantum N.41