The sharpening indebtedness of Venezuelan state-run oil firm Pdvsa over the last 12 months has drastically changed the company's accounts to the extent that its debt to net worth ratio at the end of 2007 was 28.5 percent, the highest in the last decade.

Pdvsa's consolidated debt totaled USD 16 billion in 2007, comprising USD 13.12 billion in long-term debt and USD 2.87 billion in current debt. Most of the long-term debt -USD 11.84 billion- was contracted by the holding in Venezuela, where it issued USD 7.5 billion in debt bonds in April last year.

Following an oil strike in 2003, and particularly in 2006, Pdvsa implemented a strategy of debt buyback and amortization. This allowed reduction of the consolidated debt to USD 2.91 billion at the end of 2006, thus taking the firm's debt to net worth ratio to 5.4 percent in 2006.
 
However, in 2007, Pdvsa's indebtedness soared USD 13.09 billion, or 449 percent. Consequently, the corporation exceeded its debt to net worth ratio in 1999, when the consolidated debt was USD 8.51 billion versus a net worth at USD 32.89 billion.

Pdvsa CEO and Minister of Energy and Petroleum Rafael Ramírez dismissed the subject last March 28 in a news conference intended to disclose the corporation's audited financial statements. This is the first time Pdvsa delivers the audited financial statements on time over the last five years.

Ramírez underscored that Pdvsa's net worth jumped from USD 53.10 billion in 2006 to USD 56.06 billion last year. However, this 5.5 percent increase was significantly below the expansion of debt in the same period.