Prof. Francisco Monaldi, Ph.D. Director, International Center on Energy and the Environment, IESA
CSIS, July, 2010
Sources: PODE 2006. *Informe operacional y financiero de PDVSA 2008. **Memoria y Cuenta PDVSA 2009. 2
Sources: BP Statistical Review of World Energy, Monthly Oil Market Report OPEP (varios años), PODE (varios años), Informe Operacional y Financiero del PDVSA 2008 y Memoria y Cuenta de PDVSA 2009.
3
Source: Baker Hughes International Rig Count.
4
Source: Baker Hughes International Rig Count.
5
• Only about ~45-50% of total production is fully paid. • About ~20-25% is partly paid (about 40%, i.e. equivalent to ~9% fully paid). • About ~7-9 % is destined for debt repayment to China. • At least 16% is sold in the domestic market at a loss. Probably closer to ~25%. • In sum, PDVSA is only getting paid for the equivalent of about ~60% of its production, i.e. about ~1.4 million BD
Source: Memoria y Cuenta PDVSA 2009 and own calculations
6
Según PDVSA ,ento2009 se realizaron inversiones en las filialessteady, nacionales US$15.428 millones comparación conproduction los US$15.444 millones de 2008, According PDVSA total investment remained butpor while investment in en exploration and declined (-0,41%).
19%, investment in food production and distribution rose 70%.
Type (billion US$)
2008
2009
% change
Exploration and Production
9.4
7.7
-19%
Refining
1.7
2.5
43%
PDVSA Gas
2.2
1.6
-31%
Commerce and Distribution
0.1
0.6
502%
Food Production and Distribution
0.7
1.1
70%
Other Non-Oil
0.6
1.0
64%
Other
0.6
0.9
42%
15.4
15.4
-0%
Total PDVSA investments
Source: Memoria y Cuenta PDVSA 2009 and own calculations7
Billion USD
2008
2009
% change
Total Revenues
126.4
72.9
-42%
Crude and products bought for resale
-39.5
-23.4
-41%
Operational expenditures
-22.4
-17.0
-24%
-5.2
-5.3
2%
Royalties and other taxes
-23.5
-12.5
-47%
Social expenditures and FONDEN
-14.7
-1.9
-87%
-7.4
-3.5
-53%
-112.7
-63.6
-44%
Profit before income tax
13.6
9.4
-31%
Income tax
-4.3
-2.9
-33%
Net profit
9.3
6.5
-30%
Depreciation
Other expenditures
Total expenditures
Source: Memoria y Cuenta de PDVSA 2009 and own calculations. 8
Source
2008
2009
Change
Billion USD
%
Royalties
24.6
11.5
-13.2
-53%*
Extraction tax
3.1
1.7
-1.4
-45%
Income tax
8.0
6.0
-1.9
-24%
Dividends
2.0
2.0
0
0%
Surface tax
0.2
0.1
-0
-11%
Export tax
0.1
0.0
-0
-30%
38.0
21.4
-16.5
-44%
Social expenditures
2.7
1.8
-0.9
-34%
FONDEN Windfall contribution
6.7
0.6
-6.1
-92%
FONDEN other
5.7
0
-5.7
-100%
Off-budget expenditures
15.1
2.3
-12.7
-84%
Total Government Take
53.1
23.8
-29.3
-55%
Total Royalties and Taxes
*Pdvsa claims production fell by 7% and prices by 30% Source: Memoria y Cuenta de PDVSA 2009 and own calculations 9
Source: Memoria y Cuenta de PDVSA 2009 and own calculations 10
11% 11% 18%
34% 1% 5%
11 Source: Reuters based on Ministry of Energy and Petroleum
• Signing bonuses ($1.5 bn.) • Loans to PDVSA ($2.1 bn.) • Early production 260 MBD for 84 months. Could represent $5-6 bn. • Investment ~$12 – 15 bn. ~50% in upgrader.
Source: PDVSA
12
Arbitrations. Conoco, Exxon, and others. Claims above $40 bn. Probable ~$10-15 bn. The nationalization of the service companies. Joint-ventures. The success in off-shore gas exploration (~8 TCF in Cardon IV, ENIRepsol) New small joint-ventures in conventional oil (CNPC, ONGC). Declining and merging old joint-ventures. The domestic market (~700 MBD) Electricity production (~100 MBD to ~200 MBD) Subsidy (about ~10% of total exports, $ 8 bn.) Imports of refined products (~100 MBD)
13
PDVSA’s production keeps declining. Investment capacity is limited. Only about 60% of the oil sold is actually paid for. PDVSA and the government require oil prices above $80 to avoid significant stress. Debt has increased exponentially during boom times, still manageable, but on an unsustainable path. PDVSA and the government are increasingly dependent on the price of oil. Adverse arbitration could represent a breaking point. New Orinoco Belt joint-ventures promise a future production increase, but there are obstacles and it will take some time.
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