Economy
The financial statements of state-run oil company Petróleos de Venezuela (Pdvsa) show that the main Venezuelan industry had cash flow problems and increased accounts payable at the end of the first half of the year.

Therefore, Pdvsa started the second half of the year with a mounting debt that prevents the firm from meeting commitments with providers and service companies.

The balance sheet of the company at the end of June show that the fall in oil prices and the lower volumes of production are affecting Pdvsa's financial accounts. The revenues of the oil firm in the first six months of the year amounted to USD 32.4 billion, a 52 percent fall compared to the same period last year when they reached USD 67.6 billion.

Between January and June 2009, the price of the Venezuelan oil barrel averaged USD 47.33, while in 2008 it averaged USD 96.12. As a result of the collapse of oil prices, Pdvsa announced in the first quarter of the year a review of investments and overall expenditures.

Figures show that the costs and expenses of the holding in the first six months of the year amounted to USD 27.6 billion dollars, while in the first half of 2008 they amounted to USD 51.6 billion, thus posting a 46 percent decline.

By the end of the first half of the fiscal year, profits plummeted 67 percent, from USD 9.5 billion in 2008 to USD 3.1 billion.

The fall of net income was not so marked due to the presence of some factors such as reduced contributions to social development and the transfer of funds from the National Development Fund (Fonden).

Pdvsa's financial statements show that the oil industry contributions to social development (social programs or missions, special programs and Fonden) amounted to USD 386 million, 79 percent lower.

To offset this reduction, the balance sheet shows that in a shareholder's meeting held on June 6, 2009, "the government decided to transfer USD 1.4 billion to accumulated earnings. This amount was part of the funds received from Fonden in December 2008."

At the end of 2008, Fonden transferred USD 5 billion to the corporation to offset the purchase of power utilities and investments in petrochemical and food projects.

The contribution to the Treasury also declined 52 percent. Royalty payments and taxes totaled USD 5.3 billion, whereas in 2008 they amounted to USD 11 billion.

During the first half of the year, oil production stood at 3.05 million barrels per day. This decline undermined the oil activity, which shrunk 4.4 percent in the period, according to the Central Bank of Venezuela (BCV).

Pdvsa delayed payments to service providers due to low cash flow. In an environment of lower funds and increased debts, the conglomerate decided to nationalize some related services. This had an impact in the company payroll.

Pdvsa's financial statements show that the payroll of the holding at the end of the first half of 2009 included 83,457 workers, a 17 percent increase over the first half of 2008, when Pdvsa's payroll comprised 71,426 employees.
marmas@eluniversal.com

Translated by Gerardo Cárdenas