Venezuela's PDVSA to draw $1.1 bln from gov't fund

www.forbes.com Reuters, 02.13.03, 5:47 PM ET CARACAS, Venezuela, Feb 13 (Reuters) - Venezuelan state oil firm Petroleos de Venezuela (PDVSA) will withdraw $1.1 billion from the government's FIEM rainy-day savings fund to finance investment after a two-month opposition strike slashed its revenues, government representatives said Thursday. The government introduced the request Wednesday into the National Assembly and the measure could be approved next week, said government deputy Angel Emiro Vera, vice president of the assembly's finance commission. "We have to approve it in the next week," Vera told Reuters by telephone. Vera said PDVSA holds about $2.44 billion in the FIEM, which had total deposits of $2.58 billion on Feb. 11, according to the Central Bank. The proposed withdrawal would account for 42.5 percent of the total in the FIEM, created in the 1990s to hold state savings for use when oil revenues were scarce. Assembly member Ricardo Sanguino, also part of the finance commission, said the withdrawal was justified because the funds would be used for investment. The state oil firm, the economic engine of the world's No. 5 petroleum exporter, has been battered by the strike by thousands of its employees. The stoppage began by opposition leaders in December slashed the oil exports that account for half of the government's revenues. In December, the assembly approved a reform in the FIEM law which allowed PDVSA swifter access to its savings in the fund. Before the strike, aimed at pressuring Chavez into early elections, PDVSA produced 3.1 million barrels a day (bpd) of crude. But output has been cut to around 2 million bpd after workers walked out, according the government. Rebel oil workers, more than 11,000 of whom have been fired by Chavez for striking, say production is closer to 1.4 million barrels per day despite government efforts to restart the sector with troops and replacement crews. PDVSA is in the middle of a restructuring, which is part of the government's counter measures against the strike. PDVSA has been forced to import huge volumes of gasoline to offset severe domestic fuel shortages caused by the strike, which has paralyzed most of the nation's refineries. At the start of December, the firm invoked "force majeure" to avoid legal action in case it could not complete its contractual obligations due to the sharp slide in its production and revenues.