Venezuela’s PDVSA Had Record Revenue of $128 Billion in 2011

Petroleos de Venezuela SA, the state oil company, posted a record annual revenue of $127.8 billion in 2011, Venezuelan Oil Minister Rafael Ramirez said.

That compares with revenue of $94.9 billion in 2010, Ramirez said today on state television. PDVSA, as the Caracas- based company is known, is using loans to finance its investment plan of about $15 billion a year and pays expenses with cash flow, he said, without providing additional financial results.

“When a company like Petrobras takes on new debt, everyone is happy,” Ramirez said, referring to Brazil’s state-controlled Petroleo Brasileiro SA. (PETR4) “But they criticize us when we do. We get loans because our company is strong. The China Development Bank, for example, has a very rigorous way of qualifying a company for a loan.”

President Hugo Chavez has tapped PDVSA to finance his social programs while missing production targets set in 2006. PDVSA, which Ramirez says produces 3 million barrels a day, now expects to pump 4 million barrels by 2014, down from an earlier target of 5.8 million barrels by 2012.

PDVSA, along with minority joint venture partners, will need to spend $236 billion through 2018 to develop the heavy crude fields of the Orinoco belt in eastern Venezuela, Ramirez said on Feb. 7.

Debt Surge

PDVSA’s total debt surged 40 percent in 2011 from a year earlier to $34.9 billion after issuing more than $10 billion last year in dollar-denominated bonds, the company said in a statement on Jan. 20.

The record revenue posted in 2011 came amid the highest average annual price in Venezuela’s history. Venezuela’s oil export basket price averaged $101.06 a barrel last year compared with $71.97 in 2010, according to the Oil Ministry. PDVSA posted revenue of $126 billion in 2008.

Venezuela is working to expand ties with Brazil on a refinery project. It has until March 31 to finalize loan guarantees required by Brazil’s National Development Bank for PDVSA to join the Pernambuco refinery being developed with Petrobras, Ramirez said.

PDVSA wants to more than double exports to China from 460,000 barrels a day to 1 million barrels in 2015 and plans to construct three refineries in the Asian country to process crude from the Orinoco belt, said Ramirez. Venezuela doesn’t give China discounts for oil and charges a higher price than it receives for oil exported to the U.S., he said.

“There are a lot of buyers for crude from the Orinoco belt,” said Ramirez. “It sells like hot bread.”

To contact the reporter on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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