PDVSA 2012 Revenue Declines as It Sells More Domestic Oil

Petroleos de Venezuela SA’s sales declined less than 1 percent last year as the state-owned oil company sold more crude in its home nation instead of fetching higher prices for exports, Oil Minister Rafael Ramirez said.

PDVSA, as the company is known, had revenue of $124.4 billion in 2012, down from $124.8 billion in 2011, Ramirez told reporters in Caracas today. The company’s net income decreased to $4.2 billion last year from $4.5 billion. PDVSA will publish 2012 financial results on March 25, said Ramirez, who is also the company’s president.

The decline in revenue is “not important,” he said. “PDVSA’s results guarantee the stability of the Venezuelan economy.”

Oil accounts for 96 percent of Venezuela’s dollar earnings. The nation, holder of the world’s largest crude reserves, is preparing for elections next month to replace President Hugo Chavez, who died March 5 after 14 years in office.

The state oil company has “clarified” issues with Schlumberger Ltd. (SLB), a services provider, and field partners OAO Lukoil and India’s Oil & Natural Gas Corp., Ramirez said.

The state company established a financial “mechanism” with Schlumberger to work out financial issues, Ramirez said. Schlumberger Chief Executive Officer Paal Kibsgaard said this week that the company was reducing work in Venezuela because of trouble getting paid.

PDVSA increased the amount it owes to oil-services companies by 35 percent last year, Ramirez said.

Lukoil ‘Misunderstanding’

Russian oil company Lukoil said reports it criticized Venezuela’s investment environment were a “misunderstanding,” Ramirez said, reading from what he said was a letter from Andrei Kuzyaev, president of Lukoil’s overseas unit. Lukoil will again be able to operate in the country, Ramirez said.

Ramirez also said he received a “communication” from India’s ONGC clarifying issues between the companies.

PDVSA invested $25 billion last year and its assets increased from $98 billion in 2011 to $115 billion in 2012, Ramirez said.

Venezuela’s oil exports averaged $103.42 a barrel last year from $101.06 in 2011, according to the Oil Ministry’s website. PDVSA sells oil on domestic markets for less than the export price.

To contact the reporters on this story: Jose Orozco in Caracas at jorozco8@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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