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Venezuelan Oil Revenue Destined for the Development of the Country

Minister of Energy and Oil

Venezuela’s Minister of People’s Power for Energy and Oil Rafael Ramírez stressed on Sunday that the country’s oil revenues are aimed at securing the development of the country.

During a television interview, Ramírez explained that the implementation the new oil policies have had a dramatic influence on the quality-of-life improvements experienced by the majority of Venezuelans. Since the Organic Law of Hydrocarbons took effect in 2001, revenues, independent from oil prices, reached $95.7 billion, said the minister.

Ramírez, who is also president of the state-run oil company Petróleos de Venezuela (PDVSA), highlighted that of those revenues, $63 billion have been directly allocated for social development projects.

Ramírez also explained that income per barrel has remarkably increased due to the oil policies implemented by the Venezuelan government. Royalties stood at 1 percent, taxes were not charged for oil exploitation, and PDVSA had a minority share of 30 percent of all projects.

“This led to a situation in which the strategic associations took 53 percent of the gross profit per barrel, while the Venezuelan state would keep 47 percent,” said Ramírez.

Nevertheless, the minister reminded that with the government’s policy of Full Oil Sovereignty (Plena Soberanía Petrolera), a 33.33 percent royalties was established. This is how taxes over oil incomes started to be charged, and oil incomes reached 50 percent. PDVSA currently has 60 percent participation in all projects. Currently, Venezuela’s gross profit-per-barrel reaches 94 percent.

“Our economic situation has improved: the poverty index, the child mortality rate, and unemployment have decreased in Venezuela; the minimum wage increased with the government’s efforts,” said Ramírez.

Moreover, the president of PDVSA pointed out that the Gini coefficient, which measures levels of inequality, has had a positive turn, to which PDVSA has strongly contributed.

“Our policy is national and is popular because this revenue has been distributed to the people, to social development with our missions, development funds for agriculture, infrastructure, food projects,” said the Venezuelan minister.

AVN/Venezuelan Embassy to the U.S./August 16, 2010

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