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Venezuela: Central Bank Reports $20 Million/Day Shortfall on Deposit Obligations by PDVSA

By Marianna Párraga | El Universal

Caracas, 12 May 2005 | Assemblyman César Rincones petitions to declare the Committee for the Office of the Comptroller in a state of emergency. The Director of the BCV (Banco Central de Venezuela), Maza Zavala, confirmed to parliamentarians of the National Assembly’s Committee for the Office of the Comptroller a shortfall of $20 million a day in the foreign currency that PDVSA is supposed to declare as per exports.

The imbalance in figures, which has been dragging on at Petróleos de Venezuela and Banco Central de Venezuela ever since foreign exchange controls were initiated, reached the National Assembly’s Committee for the Office of the Comptroller, whose chairman, César Rincones, yesterday petitioned to have that parliamentary entity declare itself in emergency in order to investigate what he called “a deviation of PDVSA resources”, as well as other connected cases.

Taking this as reference, Rincones yesterday requested as a matter of urgency a meeting with the director of the BCV, Domingo Maza Zavala, in order to clarify how much PDVSA is reporting to the central bank as per exports.

At the meeting, which was held just yesterday at BCV headquarters, Maza Zavala explained to the parliamentarians that, between January and April of this year, PDVSA reported to the bank around $8 billion as per exports, based on $2 billion per month.

Even though this amount coincides with the $6.433 billion which, according to Rafaél Ramírez, president of the state-owned holding company, was delivered by PDVSA to the BCV between January and March, it does not correlate with the production average of 3.3 million BPD, thus far this year, according to figures furnished by Ramírez himself, and President Chávez.

That is how Maza Zavala estimates that this year there has been a shortfall of $20 million per day, which in the first four months of the year amounted to a total of $2.4 billion which were not reported to the BCV by PDVSA, as reported by Rincones.

This discrepancy is none other than the result of a lack of control by the BCV over PDVSA's actual production figures ever since foreign currency controls were initiated, according to what was said to the parliamentarians by the bank director. He added that the companies who participate in the four strategic associations on the Orinoco Belt and in the 32 operative agreements also are not selling to the BCV the dollars they receive.

Fund in Limbo

In addition to the foreign currency shortfall as per exports, Maza Zavala confirmed to the assembly members from the Committee that the $2 billion Special Fund for Development (FONDESPA), which was created last year based on surplus income that PDVSA had received, has not been approved in 2005 by the BCV.

Nevertheless, PDVSA has been transferring to the accounts at BANDES [Bank for Economic and Social Development], the organization charged with administering the Fund, around $40 million per week, which amounts to $640 million between January and April, and approach the $700 million which, according to Chávez, are held by the Fund.

That amount has not gone through the BCV, nor has it been quantified as part of the international reserves, given that transfers are being made into BANDES accounts out of PDVSA accounts held abroad.

Rincones considered these transfers to be a "most serious” matter, taking into account the fact that the Fund has not been officially vested this year and has no control over those resources.

“It appears PDVSA has two parallel budgets, one official and one that has no fiscal oversight. This Committee must declare itself in emergency,” he said, but the proposal will have to wait until next week, when, it is expected, assembly members on the officialdom’s side will attend a plenary session of the Committee so as to form the quorum required for taking the vote.

The proposal, which Maza Zavala offered personally and is meant to solve this duality of resources, continues to be, that surplus resources originating from the high oil prices should be directed into a fund such as the Macroeconomic Stabilization Fund, over which the BCV, as well as the National Assembly, can have control.

PDVSA is obligated by law to sell all dollars it receives to the BCV, except for $600 million it maintains in a revolving fund for its foreign currency obligations.

Translation by W.K.

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