Venezuela's PDVSA Tripled Net Profit to $12B

CARACAS (Dow Jones Newswires), Jan. 2, 2009

Venezuelan state oil company Petroleos de Venezuela more than tripled its net profit in the first nine months of the year, taking in billions of dollars in additional gains due to record high oil prices.

Petroleos de Venezuela's, or PdVSA, net profit through Sept. 30 stood at $12.145 billion, a 225% increase from the $3.734 billion in the same period in 2007, according to the company's latest financial report posted on its Web site.

The jump comes as world oil prices touched record highs of as much as $147 a barrel over the summer, even though prices have since fallen more than 70% from their peak.

The company cited an average daily production of 3.269 million barrels a day for the first nine months of the year, a 119,000-barrel-a-day increase from the same period of 2007. Exports of crude and products for the first nine months of the year reached 2.945 million barrels a day, the company said.

Detractors of President Hugo Chavez's oil policy criticize PdVSA's transparency, particularly on the issue of its controversial oil production figures. Although the country claims to produce more than 3 million barrels a day, the International Energy Agency and the Organization of Petroleum Exporting Countries, OPEC, put Venezuela's output at roughly 2.36 million barrels a day.

PdVSA's overall income, including overseas subsidiaries, rose to $115.4 billion in the first nine months of the year from $68.8 billion in the year ago period. Overall operating costs rose along with revenues, reaching $81.4 billion, a 51% increase from a year ago, PdVSA figures showed.

During the first nine months of 2008, the company also set aside $10.8 billion in the form of social spending and money for the Fonden development fund, Chavez's preferred spending vehicle. This is 138% higher than the $4.5 billion funneled to the Fonden during the same period last year.

Under the Chavez administration, PdVSA has devoted billions of dollars every year to finance a host of social spending initiatives popular with Venezuela's poor.  

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