June 20 (Bloomberg) -- Petroleos de Venezuela SA’s annual net income rose more than three-fold as the state-owned oil producer spent less on social programs, reduced costs after currency devaluation and sold assets.
Profit rose to $15.8 billion last year from $4.3 billion in 2012, according to a bond offering circular dated May 14, a copy of which was obtained by Bloomberg. So-called comprehensive net income was $12.9 billion, up from $5.1 billion.
Spending on social projects declined to $13 billion from $17.3 billion in 2012. Ousted Planning Minister Jorge Giordani, who was also removed from PDVSA’s board this month, said in a June 18 letter that the company had started to show “signs of independence” under President Nicolas Maduro, derailing the long-term development goals of former President Hugo Chavez.
Venezuela devalued the bolivar by 32 percent in February, 2013, taking the primary official rate to 6.3 bolivars per dollar. The country has since introduced multiple exchange rates, opening up in March an alternative system known as Sicad II that sells dollars for about 50 bolivars.
PDVSA’s oil sales fell to $114 billion from $124.4 billion the previous year. The result was boosted by a foreign currency gain of $7.8 billion from last year’s devaluation and a one-time sale of a subsidiary for $9.5 billion.
Output fell about 11,000 barrels a day in 2013 to 2.9 million, while exports fell 143,000 barrels a day over the period to 2.4 million. The company received an average of $98.08 per barrel for its exports compared to $103.42 in 2012. While Venezuela has the largest reserves in the world at 298 billion barrels, according to a 2013 review by BP Plc, its output is dwarfed by Saudi Arabia’s 11.5 million barrels a day.
Venezuelan oil and product exports to North America fell to 845,000 barrels a day from 1 million in 2012 while exports to Asia increased to 1 million barrels a from 958,000.
Demand for refined products in Venezuela rose to 703,000 barrels a day from 681,000 in 2012. PDVSA sells oil into the domestic market for less than the export price.
PDVSA invested $23.5 billion last year compared with $25.1 billion in 2012 and total assets increased to $231.1 billion from $$218.4 billion, according to the report.
Venezuela’s oil industry accounts for 96 percent of the country’s dollar export earnings, Oil Minister Rafael Ramirez said last month. The government intends to increase oil production to 6 million barrels a day by the end of 2019, Ramirez said.
PDVSA lost a $644 million arbitration case in November 2013 against Sharjah, UAE-based Gulmar Offshore Middle East LLC and Maple Shade, New Jersey-based Kaplan Industry Inc. related to the early termination of a contract. The amount was listed on PDVSA’s balance sheet as part of accruals and other liabilities at the end of 2013, according to the report.
At the end of 2013, PDVSA was involved in other claims and legal actions totaling $2.1 billion. The company has included provisions of $3.3 billion from 2011 to 2013, according to the report. A PDVSA official, who is not authorized to speak publicly, declined to comment on the legal cases.
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