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Venezuelan state-run oil company Petroleos de Venezuela (PDVSA) is up to four months behind in payments to a host of energy industry contractors, El Universal reported June 10. Although the delays officially have been blamed on technical malfunctions, there is some evidence that PDVSA may be at serious risk of financial ruin, spelling grave implications for Venezuelan President Hugo Chavez’s regime.
PDVSA is the main source of income for the Venezuelan government and the principal financial foundation for Chavez’s populist policies. Chavez’s reliance on PDVSA to fund his policies is increasing even as inflationary pressures in the Venezuelan economy mount, local elections approach and the government struggles to compensate for system-wide food shortages. If PDVSA’s late payments are an indication that the company is faltering, it could seriously shake the country and put the government at risk of losing control.
While PDVSA has been late in paying contractors before, the delays have never been quite this protracted. The official reason is that PDVSA’s SAP computer systems program is experiencing unspecified technical difficulties. There is, however, speculation that corruption is exacerbating the situation. PDVSA is also reportedly experiencing very high employee turnover, which has slowed all of the company’s processes.
The compromised employee situation began in 2002, when a significant portion of PDVSA’s skilled staff was laid off after the company’s participation in a coup attempt against Chavez. The move left the company without technically skilled personnel or an accounting department.
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