Petróleos de Venezuela, S.A. (PDVSA)
PDVSA is the state-owned petroleum company of Venezuela. It had revenue losses of $91 billion in 2009. It is the world’s fifth largest oil exporter.
HistoryThe company was founded in 1975. Between 1986 and 1990, it purchased 100% of the Citgo gasoline brand in the United States. This created a complex political situation which has taken a toll on Citgo. The company has been up for sale, at the price of $10 billion, for several years. No one is interested in purchasing it at the current price given its association with socialism and the Chavez government.
PDVSA, as a result of strikes in 2002, fired 19,000 employees and replaced them with individuals loyal to the Chavez government. The “restructuring” resulted in a 5% rise in unemployment in Venezuela to a total unemployment rate of 20%. PDVSA is basically the driving force behind Venezuela’s socialist revolution and runs its own militia.
Holdings and Industry SegmentVenezuela has 77 billion barrels of conventional crude oil, giving it the largest deposits of conventional crude in the Western Hemisphere and the fifth largest reserves in the world. This does not include the 235 billion barrels of extra-heavy crude Orinoco Belt Region, which is the largest hydrocarbon reserve in the world. Venezuela currently has limited access to the technology needed to produce its heavy crude.
PDVSA has a production capacity of 4 million barrels per day, though its actual output as estimated by OPEC is only 500,000 barrels per day. The company is vertically integrated to the degree that technology will allow it to be.
PDVSA owns 100% of the Citgo Corporation, which is based in the United States. PDVSA has been removed from Moody’s Investor Service standalone ratings for failure to provide adequate operation and financial information.
The company lost a total of $1.61 billion in 2009.
Little information is available regarding the environmental impact of PVDSA as it operates almost entirely within Venezuela. Its Citgo subsidiary has been fined on several occasions for infractions such as violating the clean air act and running equipment without proper environmental safeguards.