Saturday, December 31, 2005
Some year end economic odds and ends
To top off the good economic news that has been coming out of Venezuela recently here is some more:
The total inflation rate for 2005 was 14.4% which was less than the targeted inflation rate of 15%. This continues the downward trend which had inflation at 31.2% in 2002, 27.1% in 2003 and 19.2% in 2004. The government hopes to have it down to single digits within two years. Under the Caldera administration, Chavez’s immediate predecessor, inflation topped 100%. So while inflation is still high by international standards it has been greatly reduced from what it was before Chavez came to power.
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In 2005 the average price for Venezuelan oil was $45.39 per barrel which is a 39% increase over the $32.61 it was in 2004. This also exceeded by $22.39 the $23 per barrel that had been used to calculate the 2005 budget. The total payments to the Venezuelan treasury from the national oil production are expected to wind up being about $25 billion which is about 3 times the amount that had been budgeted. This shows how the Venezuelan government tends to be very conservative when putting together its budget.
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The last hold out in switching over from the operating agreements to a joint partnership with majority PDVSA ownership, Exxon-Mobil, gave in yesterday. They actually did it through the back door by selling their stake in the oil field to the Spanish company Respol which promptly came to an agreement with the Venezuelan government.
With this all of the foreign oil companies have now agreed to new terms with Venezuela. When these agreements were first devised by previous governments in the 1990s they were very favorable to the foreign oil companies. With their change over to Venezuelan control it is now estimated that the Venezuelan treasury will get an additional $3 billion per year.
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The total inflation rate for 2005 was 14.4% which was less than the targeted inflation rate of 15%. This continues the downward trend which had inflation at 31.2% in 2002, 27.1% in 2003 and 19.2% in 2004. The government hopes to have it down to single digits within two years. Under the Caldera administration, Chavez’s immediate predecessor, inflation topped 100%. So while inflation is still high by international standards it has been greatly reduced from what it was before Chavez came to power.
..................................................................
In 2005 the average price for Venezuelan oil was $45.39 per barrel which is a 39% increase over the $32.61 it was in 2004. This also exceeded by $22.39 the $23 per barrel that had been used to calculate the 2005 budget. The total payments to the Venezuelan treasury from the national oil production are expected to wind up being about $25 billion which is about 3 times the amount that had been budgeted. This shows how the Venezuelan government tends to be very conservative when putting together its budget.
...................................................................
The last hold out in switching over from the operating agreements to a joint partnership with majority PDVSA ownership, Exxon-Mobil, gave in yesterday. They actually did it through the back door by selling their stake in the oil field to the Spanish company Respol which promptly came to an agreement with the Venezuelan government.
With this all of the foreign oil companies have now agreed to new terms with Venezuela. When these agreements were first devised by previous governments in the 1990s they were very favorable to the foreign oil companies. With their change over to Venezuelan control it is now estimated that the Venezuelan treasury will get an additional $3 billion per year.
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