Petroleos de Venezuela SA will create a new subsidiary called PDVSA Social that will take a minimum 4 percent stake in oil joint ventures and use dividends to pay debt owed to public workers in President Hugo Chavez’s government.
The fund, which will also receive an oil extraction tax paid by minority partners in oil ventures, will issue bolivar- denominated notes called “Petro Orinocos,” that will be used to pay down debt to state workers, Chavez said today.
“This will allow workers to reap the benefits of our oil industry,” Oil Minister and president of PDVSA Rafael Ramirez said today during the meeting with Chavez in Cuba broadcast on state television. “PDVSA isn’t giving up ownership of the joint ventures or privatizing the industry as some people have suggested.”
Chavez, who is seeking re-election in October elections as he battles an undisclosed cancer, is creating the workers funds and drafting a new labor law ahead of the campaign that officially begins in July. Chavez said he’ll have to change the central bank law to allow the funds to sell U.S. dollars received from oil operations. The fund will sell the dollars through the bank’s currency market, known as Sitme, to receive local currency to pay interest and principal on the bolivar notes.
Workers who receive the bolivar notes as payment for labor- related debt from the government, will be able to sell the instruments through the Public Securities Exchange in a secondary market after a two-year waiting period, Chavez said.
“All of this implies a change of several laws,” Chavez said. “We’re preparing all of this to celebrate Worker’s Day on May 1.”
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