Pdvsa is advised to revise oil agreements
Oil exports that are not paid in cash undermine the cash flow of the state-run oil company
ERNESTO J. TOVAR | EL UNIVERSAL
Thursday February 13, 2014 08:48 AM
Agreements on oil supply entered into by Venezuela and allied Caribbean, Central American and South American nations should be revised by the Venezuelan government and Petróleos de Venezuela (Pdvsa) if it is going to release the fiscal pressure on the state-run oil holding, oil analysts recommended.
David Voght, the CEO of think tank IPD Latin America,
explained that approximately 30% of Venezuelan exports do not leave revenues in Pdvsa's cash, as they form part of inter-government agreements.
For this reason,he deems it that Venezuela should revise such agreements to improve the financial health of the country fiscal accounts (oil provides 96% of foreign currency to the Venezuelan economy)
and concomitantly enable Pdvsa to count on resources to invest in its core activity.
Voght, who took part in a forum hosted by the Institute of the Americas on the Venezuelan oil policy under the government of President Nicolás Maduro, also said that social spending and the burden placed on Pdvsa has led the state-owned oil company to incur into a debt with the Central Bank of Venezuela of up to USD 40 billion, as well as other liabilities even with non-oil providers.
Activity at the Orinoco Oil Belt
The analyst affirmed that Pdvsa needs to lift its output and prioritize the Orinoco Oil Belt, as "there are many projects to be implemented at the same time."