State oil company's investments in welfare double those in oil refining

Since the beginning of the oil boom in 2004, Venezuelan state-run oil company Pdvsa has been fulfilling a number of obligations, compelling the company to allocate a great deal of its revenues into non-related activities.

Reports and accounts on the company reveal that between 2007-2011 money allocated for social development, excluding the National Development Fund (Fonden) doubled the amount of investments made in oil refining.

While USD 24.3 went to social programs and production projects, only USD 11.8 billion have been invested in oil refining.

In the meantime, the state oil company has had no other choice but to borrow money to boost oil refining, for instance USD 1 billion from Japanese banks to make some investments in oil refinery El Palito, northwest Venezuela.

Furthermore, lack of resources, restrict availability of material, equipment and personnel, and payment delays have limited the operations of the different refineries of the country, bringing in turn maintenance gaps.

Translated by Jhean Cabrera