PdVSA 2007 results

On this link, you'll find the Petróleos de Venezuela, SA (PdVSA) press release of yesterday with its 2007 preliminary earnings report (the final audited report comes out mid-yearish, but to disappoint some of you the numbers never change much).

When it opens, your first reaction as a numbers guy might well be "OHMYGOD! How can they only make U$6.27Bn profit from revenues of over U$96Bn?" This will then allow you to rail against Hugo Chávez and his commie pals. Your second reaction may be, "OHMYGOD! They produced less oil in 2007 than in 2006!" Those commie eejits couldn't pump up da volume. Well don't bother with either of those ohmygods, cos you'll be able to read that stupid crap in the English-speaking press as of tomorrow and save your breath.

Let's deal with the production numbers first. They were down for two reasons:

1) OPEC cut Venezuela's oil quota
2) Venezuela cut production due to OPEC quota cut.

That was difficult, wasn't it? Remember back in late 2006 and February 2007 when OPEC shaved a total of 195,000bpd from VZ's quota? Well I do, but you can bet your lilly trasero that the Miami Herald conveniently forgets this plain and simple fact when reporting the numbers. Oh, and I don't mean to pick on the Miami Herald*, cos I could have chosen at least a dozen other news outlet who'll tell you half truths about PdVSA results at some point in the next week or so.

So with that all cleared up, let's move on to the moolah. The thing is, PdVSA is a nationalized industry and isn't out to make a hatful of bottom line profits to wow shareholders and pay fat dividends. Don't work like dat, dude. PdVSA pays out to its only shareholder, the VZ people (via its gov't of course) all the way down its earnings sheet.

Take a closer look and you'll see PdVSA paid the VZ govt the following during 2007:

U$21.98Bn in royalties and taxes (from costs section)
U$14.10Bn in social development spending
U$5.02Bn in income taxes
U$6.17Bn in net profits (cos after all, the profits are state property, too)

In other words, from a total gross revenue of U$96.24Bn in 2007, PdVSA contributed U$47.27Bn to Venezuela in one way or another. That's 49.1% of oil revenues for the country. Or if you like, that's U$1,816 for every man, woman and child in Venezuela. Or if you like, five dollars per person per day. And hey, five bucks a day keeps the wolf from the door down here, believe me.

Also worth a quick line; in 2006, the total paid out was U$41.68Bn, which means PdVSA brought home U$5.59Bn more YoY.

So all in all, another good year for PdVSA. Remember that when you get to read the disastrous year that was for PdVSA in an English media near you soon.

* Well I do actually.