PDVSA’s social focus sets it apart from most oil companies, which try to maximize output and profits. Even most state-run oil companies, which tend to have bloated payrolls, try to mimic private-sector efficiency and focus entirely on the oil business. PDVSA’s shift recalls the role that Mexico’s state firm Pemex played for decades in trying to spur economic development by providing jobs and building roads.
Such attention to economic development, however, gives the company less time and money to devote to its oil business. It spent just $60 million on exploration in 2004, compared with $174 million in 2001, according to the company’s recently published 2004 financial results. That’s bad news for Venezuela, where current wells are so old that their output falls at an average rate of 23% a year, forcing the company to drill new wells just to keep production steady….
The spending goes down well with Yóselin Escobar, a 33-year-old teacher and member of the local education committee, who is trying to convince the oil company to pay a monthly stipend to stay-at-home mothers who look after the children of other working moms. “Thanks to our president, the oil company helps us,” she says. “I’m voting for [Chávez] until I die.”
[Wall St. Journal, Aug. 1, 2006] http://online.wsj.com/article/SB115439037350022856.html