Government hopes to cut PDVSA costs by 51%

www.vheadline.com Posted: Thursday, January 30, 2003 - 2:59:22 AM By: Robert Rudnicki

According to a report published in the El Universal newspaper, the Venezuelan government is hoping to cut Petroleos de Venezuela's costs by as much as 51% by carrying out the planned restructuring of the company it announced several weeks ago.

PDVSA president Ali Rodriguez Araque announced plans to split the company into PDVSA East and PDVSA West, thus cutting out many administrative costs, mainly at the company's Caracas headquarters, where most workers continue to support the opposition's work stoppage.

The huge cost cutting is planned to come from layoffs, tax reforms, asset sales and the opening up of certain ventures to private participation.

If the cost cutting is a achieved, operating costs would be slashed by nearly $2 billion, helping the company to cope with lost sales of around $520 million per month.

Over 5,000 PDVSA workers have already been sacked and a further 1,000 are expected to be fired in the company's western operations some time over the next few days.