Energy
The latest financial accounts of state-run oil holding Petróleos de Venezuela (Pdvsa) are enough to think that the world crisis already lashed the country.

Pdvsa's net earnings came from USD 2.8 billion in the first quarter of 2007 down to USD 2.6 billion during the same term last year. This shows an inter-annual decline of 7 percent in the oil business revenues, that is, USD 197 million stopped entering the coffers of the state holding.

As appears from the Pdvsa's financial and working statement, accrued profits in the first nine months of 2008 grew 225 percent, or USD 12.1 billion, over last year.
 
The upward trend in Venezuelan oil prices in the world market, which peaked from May to July, lost momentum in the first quarter.

In July, oil prices smashed a record of USD 129.54 a barrel, but the following month, the average quote fell down to USD 107.13. In September, the USD 100-barrier was punched and oil prices slipped to USD 93.53, according to the numbers released by the Ministry of Energy and Petroleum.

The setback in oil quotes shifted potential earnings in an industry where costs and expenses also increased by 62.5 percent during the third quarter in 2008. Pdvsa's outlays went from USD 19.5 billon in July-September 2007 to USD 31.6 million during the same term in 2008.

Windfall earnings
While the state holding income heightened in a similar proportion -additional 66 percent to USD 43.0 in the first quarter- other outlays became stronger at that time.

Since the Law on Special Contributions on the Prices of the International Hydrocarbons Market entered into force in May 2008, Pdvsa provided the Treasury on this account a total of USD 5.5 million. Half of this amount was delivered during the third quarter last year.

The accounts of the oil business show that USD 3.1 million was provided in July-September. Therefore, while the holding received additional revenues, historically high prices resulted in additional outlays on behalf of the state.

The contribution, also known as windfall tax, uses as the baseline to estimate the aliquot the Brent benchmark price, which stood over USD 100 a barrel in September 2008.

According to the estimates, based on USD 135.21 a barrel -the Brent price recorded last July- the contribution should be around USD 36 a barrel. However, Pdvsa's export revenues were based on a price of USD 129.54. That is, higher quotes do not necessarily mirror increasing profits for the oil industry.

Deflated missions
While Pdvsa gave the Treasury more money from high oil prices, contributions to social welfare programs, known as missions, did not share the same fate.

The state holding contribution to the social welfare programs barely amounted to USD 804 million in January-September 2008, compared with USD 2.3 million granted during the previous term.

The oil company financial and working statement shows an inter-annual drop of 65 percent, or USD 1.5 million, less than in the first nine months in 2007.

A significant fall of money transfers to the missions sparked the change. For instance, the health care program known as Barrio Adentro was allocated only USD 114 million, compared with USD 1.36 billion last year. This was the case for housing program Misión Vivienda, which received USD 155 million in January-September 2008, but last year was awarded USD 546 million.

Translated by Conchita Delgado

Suhelis Tejero Puntes
EL UNIVERSAL