CARACAS, Venezuela — Record prices boosted Venezuela's oil income by 225 percent in the first nine months of 2008, allowing the state-run oil company to stash $10.8 billion in government reserves now that oil prices have dropped dramatically.
Petroleos de Venezuela, SA, or PDVSA, said Thursday that net income reached $12.14 billion _ up from $3.73 billion during the same period in 2007.
Venezuela's heavy oil basket sold for record highs averaging $129 a barrel in July. But prices for Venezuelan crude have since dropped steadily _ closing in September at an average $93.53 per barrel. Preliminary figures from Venezuela's Energy Ministry suggest December prices will average $32.66 _ nearly half the $60 average used in Venezuela's 2009 budget plan.
President Hugo Chavez's socialist government relies on Venezuela's vast oil reserves for roughly half its federal budget and 94 percent of exports.
PDVSA payments to Chavez's numerous social programs dropped 52 percent to $2.1 billion in the first nine months, the report said. But Caracas-based economist Pavel Gomez said Chavez can fulfill his promise not to slash public aid projects by drawing on other resources.
"The government has money saved in funds that can finance social spending," he said.
Venezuela remains the fourth-largest supplier of oil to the U.S. But North American exports _ most of which go to the U.S. _ fell 10 percent to 1.5 million barrels per day, according to the report. In the same period, exports to Asia increased by 73 percent to an average 435,000 barrels per day, with most going to China. Chavez has said Venezuela hopes to send China 1 million barrels of oil per day by 2012.
The $10.8 billion windfall will go to Fonden, a national development fund used for social programs and infrastructure projects, among other things. Spikes in oil prices during the first nine months allowed PDVSA to more than double its required contribution to Fonden.
The government's decision to channel profits into such funds "has allowed us to, in the best manner possible, defend our national interests in the face of the world economic crisis," Oil Minister Rafael Ramirez said Thursday.
Company expenses, meanwhile, rose 51 percent to $81 billion _ pushed up by PDVSA's increased participation in four major oil projects taken over by the government in 2007. Spending also increased for PDVSA-owned affiliates, such as a dairy and other non-oil ventures that the government also uses to benefit the poor.
Investment in exploration, production, and other oil activities reached $10.5 billion _ a 96 percent increase over the previous year, the company said. Total debts decreased by 7 percent to $14.8 billion.
PDVSA needs to free up cash to invest in its production capacity as the international credit market contracts, said Gomez.
PDVSA said it produced 3.3 million barrels of crude per day during the first nine months of 2008, while the Organization of Petroleum Exporting Countries _ of which Venezuela is a member _ put production at around 2.4 million per day.
While export earnings rose 68 percent to $112 billion as oil prices skyrocketed, exports of oil and oil products increased just 2 percent to 2.9 million barrels a day during the first three quarters.