----

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**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        DC 20549**

**FORM        20-F**

**(Mark        One)**

| ** ̈** | **REGISTRATION                    STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES                    EXCHANGE                    ACT OF 1934** |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

**OR**

| **x** | **ANNUAL                    REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                    ACT OF                    1934** |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------|

**For          The Fiscal Year Ended December 31, 2004**

**OR**

| ** ̈** | **TRANSITION                    REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE                    ACT OF                    1934** |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

**OR**

| ** ̈** | **SHELL                    COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES                    EXCHANGE ACT OF 1934** |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------|

**For        the transition period from**

**PETRÓLEOS        DE VENEZUELA, S.A.**

**Venezuelan        National Petroleum Company**

**Bolivarian        Republic of Venezuela**

**Avenida        Libertador, La Campiña, Apdo. 169, Caracas 1010-A,        Venezuela**

**None.**

**None.**

| PDVSA                  Finance Ltd. 6.650% Notes due 2006 | PDVSA                  Finance Ltd. 9.375% Notes due 2007 |
|-----------------------------------------------------------|-----------------------------------------------------------|
| PDVSA                  Finance Ltd. 6.800% Notes due 2008 | PDVSA                  Finance Ltd. 9.750% Notes due 2010 |
| PDVSA                  Finance Ltd. 8.500% Notes due 2012 | PDVSA                  Finance Ltd. 7.400% Notes due 2016 |
| PDVSA                  Finance Ltd. 9.950% Notes due 2020 | PDVSA                  Finance Ltd. 7.500% Notes due 2028 |

** ̈**
**x**

** ̈**
**x**

----

----

----

| Large                  accelerate filer ** ̈** | Accelerated                  filer ** ̈** | Non-accelerated                  filer **x** |
|----------------------------------------------------|-----------------------------------------------|----------------------------------------------|

** ̈**
**x**

** ̈**
**x**

----

TEN

|                                                                                          |                                                                                                           | **Page** |
|-----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|----------|
| Terms                  and measurements relating to the oil and gas                  industry | iii                                                                                                            |
| Incorporation                  of certain documents by                  reference             | 1                                                                                                              |
| Factors                  affecting forward-looking                  statements                | 1                                                                                                              |
|                                                                                          |                                                                                                           |     |
| PART                  I                                                                       |                                                                                                           |     |
|                                                                                          |                                                                                                           |     |
| Item                  1.                                                                      | Identity                  of Directors, Senior Management and                  Advisers                        | 1        |
| Item                  2.                                                                      | Offer                  Statistics and Expected Timetable                                                       | 1        |
| Item                  3.                                                                      | Key                  Information                                                                               | 2        |
| Item                  4.                                                                      | Information                  on the Company                                                                    | 7        |
| Item                  5.                                                                      | Operating                  and Financial Review and                  Prospects                                 | 50       |
| Item                  6.                                                                      | Directors,                  Senior Management and Employees                                                    | 75       |
| Item                  7.                                                                      | Major                  Shareholders and Related Party                  Transactions                            | 82       |
| Item                  8.                                                                      | Financial                  Information                                                                         | 82       |
| Item                  9.                                                                      | The                  Offer and Listing                                                                         | 84       |
| Item                  10.                                                                     | Additional                  Information                                                                        | 85       |
| Item                  11.                                                                     | Quantitative                  and Qualitative Disclosures about Market                  Risk                   | 87       |
| Item                  12.                                                                     | Description                  of Securities Other than Equity                  Securities                       | 89       |
|                                                                                          |                                                                                                           |     |
| PART                  II                                                                      |                                                                                                           |     |
|                                                                                          |                                                                                                           |     |
| Item                  13.                                                                     | Defaults,                  Dividend Arrearages and                  Delinquencies                              | 90       |
| Item                  14.                                                                     | Material                  Modifications to the Rights of Security Holders and                  Use of Proceeds | 90       |
| Item                  15.                                                                     | Controls                  and Procedures                                                                       | 90       |
| Item                  16.                                                                     | [Reserved]                                                                                                     | 91       |
| Item                  16A.                                                                    | Audit                  Committee Financial Expert                                                              | 91       |
| Item                  16B.                                                                    | Code                  of Ethics                                                                                | 91       |
| Item                  16C.                                                                    | Principal                  Accountant Fees and Services                                                        | 91       |
| Item                  16D.                                                                    | Exemptions                  from the Listing Standards for Audit                  Committees                   | 92       |
| Item                  16E.                                                                    | Purchase                  of Equity Securities by the Issuer and Affiliated                  Purchasers        | 92       |
|                                                                                          |                                                                                                           |     |
| PART                  III                                                                     |                                                                                                           |     |
|                                                                                          |                                                                                                           |     |
| Item                  17.                                                                     | Financial                  Statements                                                                          | 93       |
| Item                  18.                                                                     | Financial                  Statements                                                                          | 93       |
| Item                  19.                                                                     | Exhibits                                                                                                       | 94       |
|                                                                                          |                                                                                                           |     |
| Signatures                                                                                    |                                                                                                           | 95       |

----

*Table            of Contents*

**TABLE        OF FIGURES**

|                                                                                                              | **Page** |
|-------------------------------------------------------------------------------------------------------------------|----------|
| Table                  1 - Balance Sheet                                                                          | 2        |
| Table                  2 - Income Statement and Cash Flow                                                         | 3        |
| Table                  3 - Operating data                                                                         | 4        |
| Table                  4 - Capital Investment Plan 2006 - 2012 for Venezuela                                      | 13       |
| Table                  5 - Venezuela’s reserves and production by basin                                     | 16       |
| Table                  6 - Proved reserves and production by main field                                           | 16       |
| Table                  7 - Venezuela’s Proved Reserves                                                      | 18       |
| Table                  8 - PDVSA’s drilling activity                                                        | 19       |
| Table                  9 - PDVSA’s Average Production, Sales Price and Production                  Cost     | 21       |
| Table                  10 - PDVSA’s Operating Service Agreements                                            | 22       |
| Table                  11 - Operating Service Agreements proved crude oil reserves by                  consortium | 24       |
| Table                  12 - E&P new areas profit sharing agreements                                           | 26       |
| Table                  13 - Orinoco Belt associations reserves and production                                     | 28       |
| Table                  14 - PDVSA’s Refining Capacity                                                       | 31       |
| Table                  15 - Refining Production                                                                   | 35       |
| Table                  16 - PDVSA’s Export Volumes                                                          | 36       |
| Table                  17 - Total Crude Oil and Refined Products Export Volumes                                   | 37       |
| Table                  18 - PDVSA’s Consolidated Sales Volume                                               | 38       |
| Table                  19 - PDVSA’s sales in Venezuela                                                      | 40       |
| Table                  20 - Pequiven’s key statistics                                                       | 41       |
| Table                  21 - 2004 sales distribution of Orimulsion® by geographic                  location   | 42       |
| Table                  22 - Orimulsion® key statistics                                                       | 42       |
| Table                  23 - Principal subsidiaries and affiliates of PDVSA                                        | 50       |
| Table                  24 - PDVSA Petróleo’s export volume and price                                   | 51       |
| Table                  25 - Exchange Rates (Bs/$)                                                                 | 53       |
| Table                  26 - Income, production and other taxes                                                    | 55       |
| Table                  27 - Export sales by geographical area 2004 vs. 2003                                       | 59       |
| Table                  28 - Export sales by geographical area 2003 vs. 2002                                       | 61       |
| Table                  29 - Capital expenditures 2004 - 2002                                                      | 64       |
| Table                  30 - 2006 PDVSA Finance Tender Offer                                                       | 69       |
| Table                  31 - Capital expenditures 2005 - 2009                                                      | 70       |
| Table                  32 - Future payments for PDVSA’s contractual obligations                             | 71       |
| Table                  33 - Crude supply agreements (mbpd)                                                        | 71       |
| Table                  34 - Number of Employees                                                                   | 81       |
| Table                  35 - Exchange Rate (Bs /$)                                                                 | 85       |
| Table                  36 - Non-trading commodity derivatives 2004                                                | 87       |
| Table                  37 - Non-trading interest rate derivatives at December 31,                  2004           | 88       |
| Table                  38 - Short and long term-debt at December 31, 2004                                         | 88       |
| Table                  39 - Short and long term-debt at December 31, 2003                                         | 89       |
| Table                  40 - Foreign currency exchange exposure                                                    | 89       |
| Table                  41 - Short and long-term debt by type of currency                                          | 89       |
| Table                  42 - Audit services fees                                                                   | 92       |

----

*Table            of Contents*

**Terms        and measurements relating to the oil and gas        industry**

**Abbreviations:**

**Equivalent        measures are based upon:**

**Terms:**

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*Table            of Contents*

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*Table            of Contents*

**Company        Abbreviations:**

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*Table            of Contents*

cum

wa

**PART        I**

**Item        1. Identity of Directors, Senior Management and        Advisers**

**Item        2. Offer Statistics and Expected Timetable**

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*Table            of Contents*

**Item        3. Key Information**

| **3.a** | **Selected                  financial data** |
|---------|----------------------------------------------|

|                                                    |   | **2004** |       | **2003** |   | **2002**   |   | **2001** |       | **2000** |   |
|---------------------------------------------------------|--------|----------|------------|----------|--------|------------|--------|----------|------------|----------|--------|
| **Balance                  Sheet**                      |   |     |       |     |   |       |   |     |       |     |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |
| Cash                  and cash equivalents              |   |     | 1,748      |     |   | 2,938      |   |     | 1,703      |     |   | 925 |   |   | 3,257 |   |
| Restricted                  Cash                        |   |     | 709        |     |   | 659        |   |     | 1,772      |     |   | 2,378 |   |   | 0 |   |
| Accounts                  receivable, net               |   |     | 5,135      |     |   | 4,955      |   |     | 3,515      |     |   | 3,280 |   |   | 4,435 |   |
| Inventories                                             |   |     | 2,824      |     |   | 2,382      |   |     | 2,263      |     |   | 2,208 |   |   | 2,175 |   |
| Other                  current assets                   |   |     | 1,623      |     |   | 1,034      |   |     | 1,406      |     |   | 1,224 |   |   | 2,920 |   |
| **Current                  assets**                     |   |     | **12,039** |     |   | **11,968** |   |     | **10,659** |     |   | **10,015** |   |   | **12,787** |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| Restricted                  Cash                        |   |     | 3,039      |     |   | 1,000      |   |     | 1,033      |     |   | 1,899 |   |   | 2,406 |   |
| Property                  plant and equipment, net      |   |     | 34,712     |     |   | 34,720     |   |     | 35,871     |     |   | 36,888 |   |   | 36,330 |   |
| Other                  non-current assets               |   |     | 10,515     |     |   | 7,667      |   |     | 7,376      |     |   | 8,398 |   |   | 6,077 |   |
| **Total                  assets**                       |   |     | **60,305** |     |   | **55,355** |   |     | **54,939** |     |   | **57,200** |   |   | **57,600** |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| Trade                  accounts payable                 |   |     | 4,571      |     |   | 3,365      |   |     | 2,850      |     |   | 3,043 |   |   | 3,084 |   |
| Current                  portion long term debt         |   |     | 1,004      |     |   | 750        |   |     | 1,817      |     |   | 1,000 |   |   | 596 |   |
| Income                  tax payable and deferred taxes  |   |     | 3,737      |     |   | 652        |   |     | 327        |     |   | 921 |   |   | 1,598 |   |
| Other                  current liabilities              |   |     | 2,824      |     |   | 2,556      |   |     | 2,188      |     |   | 2,626 |   |   | 2,934 |   |
| **Current                  liabilities**                |   |     | **12,136** |     |   | **7,323**  |   |     | **7,182**  |     |   | **7,590** |   |   | **8,212** |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| Long-term                  debt, net of current portion |   |     | 2,716      |     |   | 6,265      |   |     | 6,426      |     |   | 7,427 |   |   | 7,003 |   |
| Other                  non-current liabilities          |   |     | 4,982      |     |   | 4,256      |   |     | 3,929      |     |   | 4,918 |   |   | 4,236 |   |
| **Total                  liabilities**                  |   |     | **19,834** |     |   | **17,844** |   |     | **17,537** |     |   | **19,935** |   |   | **19,451** |   |
| Minority                  interests                     |   |     | 67         |     |   | 93         |   |     | 114        |     |   | 167 |   |   | 217 |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| **Stockholder’s                  equity (1)**     |   |     | **40,404** |     |   | **37,418** |   |     | **37,288** |     |   | **37,098** |   |   | **37,932** |   |
| **Total                  liabilities & equity**     |   |     | **60,305** |     |   | **55,355** |   |     | **54,939** |     |   | **57,200** |   |   | **57,600** |   |
|                                                    |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| **Debt                  to Equity Ratio (2)**           |   |     |       |     |   |       |   |     |       |     |   |   |   |   |   |   |
| Total                  debt incl. capital lease         |   |     | 3,768      |     |   | 7,061      |   |     | 8,341      |     |   | 8,606 |   |   | 7,905 |   |
| Debt                  / Equity (%)                      |   |     | 9          | %        |   | 19         | %      |     | 22         | %        |   | 23 | % |   | 21 | % |

| (1) | Of                  which Capital Stock represents $39,094                  million. |
|-----|--------------------------------------------------------------------------------------|

| (2) | Calculated                  as total long-term debt and capital lease, including current portion,                  divided by stockholder’s equity. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

|                                                                                                                            |   | **2004**     |       | **2003**     |   | **2002**     |   | **2001**     |       | **2000**     |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------------|--------|--------------|--------|--------------|------------|--------------|--------|
| **Income                  Statement**                                                                                           |   |    |       |    |   |    |   |    |       |    |   |
|                                                                                                                            |   |    |       |    |   |    |   |    |       |    |   |
| Sales                  of crude oil and products:                                                                               |   |    |       |    |   |    |   |    |       |    |   |
| Exports                  and international markets                                                                              |   |         | 59,951     |         |   | 44,178       |   |         | 39,875     |         |   | 42,682 |   |   | 49,780 |   |
| In                  Venezuela                                                                                                   |   |         | 1,227      |         |   | 961          |   |         | 1,236      |         |   | 1,701 |   |   | 2,230 |   |
| Petrochemical                  and other sales                                                                                  |   |         | 1,517      |         |   | 1,071        |   |         | 1,201      |         |   | 1,403 |   |   | 1,224 |   |
| Equity                  in earnings of non-consolidated investors                                                               |   |         | 1,041      |         |   | 379          |   |         | 268        |         |   | 464 |   |   | 446 |   |
| **Net                  revenues**                                                                                               |   |         | **63,736** |         |   | **46,589**   |   |         | **42,580** |         |   | **46,250** |   |   | **53,680** |   |
|                                                                                                                            |   |         |       |         |   |         |   |         |       |         |   |   |   |   |   |   |
| Purchases                  of crude oil and products                                                                            |   |         | 25,448     |         |   | 21,016       |   |         | 17,956     |         |   | 18,228 |   |   | 19,759 |   |
| Operating                  costs and other (1)                                                                                  |   |         | 24,588     |         |   | 17,311       |   |         | 18,079     |         |   | 17,125 |   |   | 17,269 |   |
| Depreciation                  and depletion                                                                                     |   |         | 2,829      |         |   | 2,824        |   |         | 3,038      |         |   | 2,624 |   |   | 3,001 |   |
| Financing                  Expenses                                                                                             |   |         | 456        |         |   | 627          |   |         | 763        |         |   | 509 |   |   | 672 |   |
| Social                  development programs                                                                                    |   |         | 1,242      |         |   | 249          |   |         | 0          |         |   | 0 |   |   | 0 |   |
| **Total                  costs and expenses**                                                                                   |   |         | **54,563** |         |   | **42,027**   |   |         | **39,836** |         |   | **38,486** |   |   | **40,701** |   |
|                                                                                                                            |   |         |       |         |   |         |   |         |       |         |   |   |   |   |   |   |
| **Income                  before income taxes, minority interests and cumulative effect of                  accounting change** |   |         | **9,173**  |         |   | **4,562**    |   |         | **2,744**  |         |   | **7,764** |   |   | **12,979** |   |
|                                                                                                                            |   |         |       |         |   |         |   |         |       |         |   |   |   |   |   |   |
| Income                  taxes                                                                                                   |   |         | 4,753      |         |   | 1,602        |   |         | 149        |         |   | 3,766 |   |   | 5,748 |   |
| Minority                  interests                                                                                             |   |         | 11         |         |   | 6            |   |         | 5          |         |   | 5 |   |   | 15 |   |
| Cumulative                  effects of accounting change                                                                        |   |         | 0          |         |   | 234          |   |         | 0          |         |   | 0 |   |   | 0 |   |
| **Net                  income**                                                                                                 |   |         | **4,409**  |         |   | **2,720**    |   |         | **2,590**  |         |   | **3,993** |   |   | **7,216** |   |
|                                                                                                                            |   |         |       |         |   |         |   |         |       |         |   |   |   |   |   |   |
| **Cash                  Flow**                                                                                                  |   |         |       |         |   |         |   |         |       |         |   |   |   |   |   |   |
| Operating                  activities                                                                                           |   |         | 8,483      |         |   | 5,746        |   |         | 4,880      |         |   | 6,965 |   |   | 10,285 |   |
| Investment                  activities                                                                                          |   |         | (4,960     | )            |   | (902         | )      |         | (1,266     | )            |   | (5,263 | ) |   | (5,360 | ) |
| Financing                  activities                                                                                           |   |         | (4,713     | )            |   | (3,609       | )      |         | (2,836     | )            |   | (4,034 | ) |   | (2,747 | ) |
| **Net                  increase(decrease) in cash and equivalents**                                                             |   |         | **(1,190** | **)**        |   | **1,235**    |   |         | **778**    |         |   | **(2,332** | **)** |   | **2,178** |   |

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*Table            of Contents*

|                                                         |   | **2004**     |        | **2003**     |   | **2002**     |   | **2001**     |        | **2000**     |   |
|--------------------------------------------------------------|--------|--------------|-------------|--------------|--------|--------------|--------|--------------|-------------|--------------|--------|
| **Venezuela's                  proved reserves (mmbls) (1)** |   |    |        |    |   |    |   |    |        |    |   |
| Crude                  Oil                                   |   |         | 80,582      |         |   | 77,140       |   |         | 77,157      |         |   | 77,783 |   |   | 77,685 |   |
| Natural                  gas in boe (2)                      |   |         | 26,117      |         |   | 25,869       |   |         | 25,364      |         |   | 25,568 |   |   | 25,446 |   |
| **Hydrocarbons                  in boe**                     |   |         | **106,699** |         |   | **103,009**  |   |         | **102,521** |         |   | **103,351** |   |   | **103,131** |   |
|                                                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **PDVSA's                  production (mbpd)**               |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Crude                  Oil (3)                               |   |         | 2,733       |         |   | 2,451        |   |         | 2,659       |         |   | 3,094 |   |   | 3,085 |   |
| Liquid                  petroleum gas                        |   |         | 166         |         |   | 144          |   |         | 173         |         |   | 173 |   |   | 167 |   |
| Natural                  gas in boe (2)                      |   |         | 658         |         |   | 592          |   |         | 633         |         |   | 706 |   |   | 686 |   |
| **Hydrocarbons                  in boe**                     |   |         | **3,557**   |         |   | **3,187**    |   |         | **3,465**   |         |   | **3,973** |   |   | **3,938** |   |
|                                                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **Average                  production cost ($/boe)**         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Incl.                  operating service agreements (4)      |   |         | 3.77        |         |   | 3.85         |   |         | 3.92        |         |   | 3.38 |   |   | 3.48 |   |
| Excl.                  operating service agreements (4)      |   |         | 3.29        |         |   | 2.06         |   |         | 2.42        |         |   | 2.17 |   |   | 2.22 |   |
|                                                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **PDVSA's                  refining capacity (mbpd) (5)**    |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Venezuela,                  incl. Isla Refinery              |   |         | 1,638       |         |   | 1,628        |   |         | 1,628       |         |   | 1,628 |   |   | 1,620 |   |
| United                  States                               |   |         | 1,205       |         |   | 1,205        |   |         | 1,205       |         |   | 1,205 |   |   | 1,198 |   |
| Europe                                                       |   |         | 259         |         |   | 259          |   |         | 251         |         |   | 251 |   |   | 251 |   |
| **Total                  refining capacity**                 |   |         | **3,102**   |         |   | **3,092**    |   |         | **3,084**   |         |   | **3,084** |   |   | **3,069** |   |
|                                                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **Sales                  volume exported (mbpd)**            |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Crude                  oil                                   |   |         | 1,774       |         |   | 1,648        |   |         | 1,764       |         |   | 2,065 |   |   | 1,998 |   |
| Refined                  products                            |   |         | 660         |         |   | 502          |   |         | 647         |         |   | 697 |   |   | 825 |   |
| **Total                  exports**                           |   |         | **2,434**   |         |   | **2,150**    |   |         | **2,411**   |         |   | **2,762** |   |   | **2,823** |   |
|                                                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **Average                  sales export price ($/bl)**       |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Crude                  oil                                   |   |         | 32.22       |         |   | 24.35        |   |         | 21.19       |         |   | 18.95 |   |   | 24.94 |   |
| Refined                  products                            |   |         | 34.66       |         |   | 26.53        |   |         | 24.23       |         |   | 23.94 |   |   | 28.40 |   |
| **Total                  exports**                           |   |         | **32.88**   |         |   | **24.89**    |   |         | **21.94**   |         |   | **20.21** |   |   | **25.91** |   |

| (1) | Proved                  reserves include both proved developed and undeveloped reserves,                  includes                  portion relating to operating service agreements and initiatives                  involving                  private sector participation. See “Item 4.b Business overview— Initiatives                  involving private sector                  participation”. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Natural                  Gas production is net of natural gas used for reinjection purposes.                  Natural gas is converted to boe at a ratio of 5.8 thousand cubic                  feet of                  natural gas per one barrel of crude                  oil. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Excludes                  Petrozuata equity participation (49.9%) of 61.9 mbpd in                  2004. |
|-----|----------------------------------------------------------------------------------------------------------|

| (4) | Calculated                  by dividing total costs (excluding depreciation and depletion)                  and                  expenses of crude oil, natural gas and liquid natural gas producing                  activities by total crude oil, liquid petroleum gas and net natural                  gas                  (boe) produced. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Amounts                  represent PDVSA’s interest in the refining capacity of all refineries in                  which it holds equity or leasehold interest. See “Item 4.b Business                  overview—refining and marketing.” |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.b** | **Capitalization                  and indebtedness** |
|---------|------------------------------------------------------|

| **3.c** | **Reasons                  for the offer and use of                  proceeds** |
|---------|---------------------------------------------------------------------------------|

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*Table            of Contents*

| **3.d** | **Risk                  factors** |
|---------|-----------------------------------|

**Our        business depends substantially on international prices for oil and oil products        and such prices are volatile. A decrease in such prices could materially        and        adversely affect our business.**

|   | · | Changes                  in global supply and demand for crude oil and refined petroleum                  products; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Political                  events in major oil producing and consuming                  nations; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Agreements                  among OPEC members; |
|--------|--------|-------------------------------------------------|

|   | · | Availability                  and price of competing products; |
|--------|--------|----------------------------------------------------------------|

|   | · | Actions                  of commodity markets, participants and                  competitors; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | International                  economic trends; |
|--------|--------|-------------------------------------------------|

|   | · | Technological                  advancements and developments in the                  industry; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Domestic                  and foreign government regulations that directly impact the supply                  of                  crude oil and refined petroleum products;                  and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inflation. |
|--------|--------|------------|

**Risks        related to the ownership, regulation and supervision of        PDVSA.**

----

*Table            of Contents*

**We        do not own any of the hydrocarbon reserves that we develop and        operate.**

**Our        business requires substantial capital expenditures.**

**We        are subject to production, equipment, transportation and other risks that        are        common to oil and gas companies.**

**Venezuelan        crude oil and natural gas reserve estimates involve some degree of uncertainty        and may prove to be incorrect over time, which could adversely affect our        ability to generate income.**

**We        are subject to numerous domestic environmental and health regulations that        may        become more stringent and result in increased liabilities and increased capital        expenditures.**

----

*Table            of Contents*

**Item        4. Information on the Company**

| **4.a** | **History                  and development of the                  company** |
|---------|------------------------------------------------------------------------------|

| **4.b** | **Business                  overview** |
|---------|----------------------------------------|

|   | · | Exploration,                  production and upgrading of crude oil and natural gas or upstream                  operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | Exploration,                  production of natural gas from offshore sources, including the                  possibility                  for LNG export; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Refining,                  marketing and transportation of crude oil and refined petroleum                  products                  and the processing, marketing and transportation of natural gas,                  or                  downstream operations; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Production                  and marketing of petrochemicals. The Venezuelan government decided                  in June                  2005 to transfer the activities, assets and shares held by PDVSA                  in                  Pequiven, our main petrochemical business unit, to the Ministry                  of Energy                  and Petroleum and to submit this transfer for approval by the shareholder                  of PDVSA. The transfer was made in accordance with the Petrochemical                  Act,                  dated December 1, 2005, effective as of February 2006;                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Production                  and marketing of Orimulsion®, Venezuela’s derivative of heavy and                  extra-heavy crude, which will be produced until expiration of the                  current                  supply agreement. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | · | Operating                  refineries and marketing of crude oil and refined petroleum products                  in                  Venezuela under the PDV brand name and under the CITGO brand name                  for the                  eastern and Midwestern regions of the United                  States; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating                  a business in the Caribbean through the Isla Refinery (a refinery                  and                  storage terminal which PDVSA leases in                  Curaçao); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating                  storage terminals in Bonaire and the Bahamas in the                  Caribbean; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | Owning                  equity interests in three refineries (one that is 50%-owned by                  ExxonMobil,                  one that is 58.75%-owned by Lyondell and one that is 50%-owned                  by Hess)                  and in a coker/vacuum crude distillation unit (50%-owned by                  ConocoPhillips) through joint ventures in the United                  States; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Owning                  equity interests in eight refineries and market petroleum products                  in                  Germany, United Kingdom and Sweden through two joint ventures (one                  that is                  50%-owned by Deutsche BP and one that is 50%-owned by Neste                  Oil); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Processing,                  marketing and transporting of all natural gas in Venezuela;                  and |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | · | Conducting                  shipping activities. |
|--------|--------|--------------------------------------------------|

----

*Table            of Contents*

|                                 | **Company** | **(MBPD)** |
|--------------------------------------|-------------|------------|
|                                 |        |       |
| Dominican                  Republic  | REFIDOMSA   | 50         |
|                                 |        |       |
| Argentina                            | CAMMESA     | 9          |
|                                 |        |       |
| Paraguay                             | PETROPAR    | 19         |
|                                 |        |       |
| Bolivia                              | YPFB        | 2          |
|                                 |        |       |
| Jamaica                              | PETROJAM    | 21         |
|                                 |        |       |
| Caribbean                  countries | Various     | 28         |

----

*Table            of Contents*

**Business        Strategy**

|   | · | *Exploration                  of condensate, light and medium crude oil.*                  PDVSA’s financial resources will be primarily concentrated on the                  traditional producing areas. All other exploration regions, either                  onshore                  or offshore, are opened for third party participation, under the                  umbrella                  of the Venezuelan *Organic                  Hydrocarbon Law*                  and the National Constitution. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | · | *Production                  and marketing of heavy and extra-heavy crude oil, including the                  large                  reserves in the Orinoco Oil Belt*. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of the Orinoco Oil Belt Magna Reserves.*                  The Orinoco Oil Belt area has been divided in 27 blocks (18,220                  km2) for                  reserves quantification and certification purposes. We expect that                  the                  certification process will confirm that Venezuela has the world’s largest                  oil reserves. Additionally, PDVSA and the Minister of Energy and                  Petroleum                  will identify requirements for new technologies and provide the                  technical                  basis for economic analysis of new business opportunities. PDVSA                  and the                  Minister of Energy and Petroleum will also leverage the development                  of the                  country’s northeast and                  Orinoco-Apure. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Expansion                  of the Orinoco Project.*                  This expansion will consist of the development of extra heavy oil                  reserves                  in the Orinoco Oil Belt including new upgrading facilities and                  pipelines                  to terminals. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of the gas sector.*PDVSA                  is planning fast track development of this business segment with                  third                  party participation both onshore and offshore under the framework                  of                  Venezuela’s Gas Hydrocarbons Law. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *In                  the downstream business, we seek a balance between our overseas                  and local                  assets in order to assure domestic supply and quality for customers,                  while                  at the same time maximizing the value of Venezuelan oil and gas                  resources.* |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of a large-scale, sustainable social plan aligned with the Social                  Plan of                  the Venezuelan Government.*                  PDVSA’s social plan includes education, agriculture, infrastructure and                  local/regional development projects, which will generate about                  1.7 million                  direct and indirect jobs and benefit 8.4 million people in                  Venezuela. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of the Delta Caribe.*                  This development will consist of the development of the Northeast                  Delta                  Caribbean Project and the Rafael Urdaneta Project in western offshore                  Venezuela. The first project involves the development of reserves                  located                  north of Paria (Mariscal Sucre Project), Plataforma Deltana, Gulf                  of                  Paria, Guarapiche, Punta Pescador and Delta Centro area. All blocks                  will                  be linked by a gas pipeline network to the future Güíria Hub, where the                  industrial complex CIGMA will be developed. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Production                  Growth in Traditional Areas.*                  Venezuela is investing in order to achieve an oil production capacity                  of                  5,800 mbpd by the year 2012. The production forecast by the year                  2012                  includes the following: areas where PDVSA is 100% operator, 4,019                  mbpd;                  partnership PDVSA-IOC blocks, 460 mbpd; existing association agreements                  in                  Orinoco Oil Belt, 622 mbpd; shared profits agreements, 112 mbpd;                  additional PDVSA-IOC, 9 mbpd; and new Orinoco Oil Belt developments,                  615                  mbpd. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of Major Projects in Refineries.*                  This development is focused on the expansion of refinery capacity                  from 3.1                  mmbpd (1.3/1.8 mmbpd Venezuela/Overseas capacity) to 3.8 mmbpd                  by the year                  2012 (1.8/2.0 mmbpd Venezuela/Overseas capacity). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Development                  of Infrastructure.*                  This development is focused on multiple projects in order to assure                  the                  development of the reserves considered in this period. In the area                  of oil                  handling, this includes the building of about 9.3 million barrels                  of oil                  storage capacity, 3 additional loading docks and approximately                  650 km of                  oil pipelines. In products distribution for the domestic market                  4 new                  distribution facilities will be constructed with associated pipelines.                  In                  the gas sector, existing pipelines will be expanded and new pipelines                  will                  be constructed for an estimated length of 6,210                  km. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Marketing                  of Crude and Products.*                  We                  will focus on guaranteeing the appropriate marketing of all crude                  and                  products forecasted in the plan, there is an accelerated renewal                  and                  expansion process of PDVSA’s tanker fleet. PDV Marina, a PDVSA’s                  subsidiary, would increase its tankers capacity from current 1,348,000                  dwt                  (Dead Weight Ton) to 4,151,000 dwt by                  2012. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

----

*Table            of Contents*

|                                  |   |       |   |                                |   |
|---------------------------------------|--------|------------|--------|-------------------------------------|--------|
|                                  |   | **Actual** |   | **Plan                  2006-2012** |   |
|                                  |   | **2005**   |   | **2006**                            |   | **2007** |   | **2008** |   | **2009** |   | **2010** |   | **2011** |   | **2012** |   | **Total** |   |
|                                  |   |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                           |   |       | 241    |                                |   | 389 |   |   | 409 |   |   | 505 |   |   | 413 |   |   | 284 |   |   | 228 |   |   | 216 |   |   | 2,444 |   |
| Production                            |   |       | 2,012  |                                |   | 2,466 |   |   | 2,581 |   |   | 2,387 |   |   | 2,400 |   |   | 2,485 |   |   | 2,240 |   |   | 2,140 |   |   | 16,699 |   |
| OS                  Agmnts. (1)       |   |       | 444    |                                |   | 708 |   |   | 680 |   |   | 527 |   |   | 467 |   |   | 361 |   |   | 190 |   |   | 120 |   |   | 3,053 |   |
| Orinoco                  Actual (2)   |   |       | 0      |                                |   | 449 |   |   | 291 |   |   | 309 |   |   | 388 |   |   | 320 |   |   | 328 |   |   | 406 |   |   | 2,491 |   |
| Orinoco                  New (2)      |   |       | 0      |                                |   | 16 |   |   | 14 |   |   | 1,576 |   |   | 4,533 |   |   | 3,542 |   |   | 3,662 |   |   | 3,120 |   |   | 16,463 |   |
| PSA’s                  (3)      |   |       | 52     |                                |   | 412 |   |   | 298 |   |   | 174 |   |   | 369 |   |   | 380 |   |   | 20 |   |   | 14 |   |   | 1,667 |   |
| Gas                                   |   |       | 744    |                                |   | 2,256 |   |   | 2,543 |   |   | 2,197 |   |   | 2,534 |   |   | 2,201 |   |   | 2,499 |   |   | 1,966 |   |   | 16,196 |   |
| Refining                              |   |       | 192    |                                |   | 624 |   |   | 3,356 |   |   | 3,733 |   |   | 3,834 |   |   | 3,290 |   |   | 1,170 |   |   | 279 |   |   | 16,286 |   |
| Proesca                               |   |       | 105    |                                |   | 27 |   |   | 66 |   |   | 67 |   |   | 248 |   |   | 488 |   |   | 276 |   |   | 0 |   |   | 1,172 |   |
| Supply                  & Trading |   |       | 88     |                                |   | 219 |   |   | 132 |   |   | 73 |   |   | 117 |   |   | 126 |   |   | 188 |   |   | 14 |   |   | 869 |   |
| Total                                 |   |       | 3,878  |                                |   | 7,566 |   |   | 10,370 |   |   | 11,548 |   |   | 15,303 |   |   | 13,477 |   |   | 10,801 |   |   | 8,275 |   |   | 77,340 |   |

| (1) | PDVSA’s                  Operating Service Agreements |
|-----|-------------------------------------------------------------|

| (2) | Orinoco                  Oil Belt Associations |
|-----|------------------------------------------------|

| (3) | Profit                  Sharing Agreements |
|-----|--------------------------------------------|

|   | · | Exploration,                  production and upgrading - |
|--------|--------|----------------------------------------------------------|

|   | · | Incorporate                  reserves of light and medium gravity crude                  oil. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Increase                  our overall recovery factor. |
|--------|--------|--------------------------------------------------------|

|   | · | Continue                  the development of our Orinoco Belt extra-heavy crude oil                  projects. |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | Leverage                  existing technology in order to maximize the return on our                  investments. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Refining                  and marketing - |
|--------|--------|-------------------------------------------|

|   | · | Assure                  product enhancement and environmental compliance in Venezuela and                  abroad. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | Expand                  and diversify our markets into Latin America, Caribbean and Asia,                  including China and India. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Improve                  the efficiency of our refining processes and marketing                  activities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | Natural                  gas - |
|--------|--------|--------------------------------|

|   | · | Actively                  promote national and international private sector participation                  in onshore                  and offshore non-associated gas reserves exploration, exploitation                  and                  processing. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Enhance                  our distribution processes in order to increase the breadth of                  our                  domestic and international markets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Assure                  participation in the liquefied natural gas (LNG)                  markets. |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | Petrochemicals                  - |
|--------|--------|-----------------------------------|

|   | · | Provide                  feed stock and other raw materials to Pequiven in a timely manner                  and                  continue to evaluate opportunities for petrochemical product development                  in our refineries abroad. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Exploration,        production and upgrading.**

**Refining.**

**International        marketing.**

**Domestic        marketing.**

**Gas.**

----

*Table            of Contents*

**The        Ministry of Energy and Petroleum.**

**Orimulsion®.**

**Exploration,        Production and Upgrading**

----

*Table            of Contents*

|                                                  |   | **Proved                  (1)**          |       | **Proved****developed** |   | **2004****Production** |   | **Ratio****Res/Prod** |      |
|-------------------------------------------------------|--------|------------------------------------------|------------|-------------------------|--------|------------------------|--------|-----------------------|-----------|
|                                                  |   | **(mmb                  at 12/31/2004)** |       | **(mbpd)**              |   | **(years)**            |   |
| **Crude                  Oil (2):**                   |   |                                     |       |                    |   |                   |   |                  |      |
| Western                  Zulia                        |   |                                     | 21,409     |                    |   | 6,295                  |   |                  | 1,237     |   |   | 47 |   |
| Central                  Southern Barinas & Apure |   |                                     | 1,843      |                    |   | 940                    |   |                  | 85        |   |   | 59 |   |
| Eastern                                               |   |                                     | 57,330     |                    |   | 10,040                 |   |                  | 1,847     |   |   | 85 |   |
| **Total                  Crude Oil**                  |   |                                     | **80,582** |                    |   | **17,275**             |   |                  | **3,169** |   |   | **69** |   |
| *of                  which Extra Heavy*               |   |                                     | *38,690*   |                    |   | *4,076*                |   |                  | *524*     |   |   | *202* |   |
|                                                  |   |                                     |       |                    |   |                   |   |                  |      |   |   |   |   |
| **Natural                  Gas in boe (3):**          |   |                                     |       |                    |   |                   |   |                  |      |   |   |   |   |
| Western                  Zulia                        |   |                                     | 6,170      |                    |   | 4,319                  |   |                  | 210       |   |   | 80 |   |
| Central                  Southern Barinas & Apure |   |                                     | 40         |                    |   | 28                     |   |                  | 1         |   |   | 109 |   |
| Eastern                  (4)                          |   |                                     | 19,907     |                    |   | 13,935                 |   |                  | 447       |   |   | 122 |   |
| **Total                  Natural Gas in boe**         |   |                                     | **26,117** |                    |   | **18,282**             |   |                  | **658**   |   |   | **108** |   |

| (1) | Developed                  and undeveloped. |
|-----|---------------------------------------------|

| (2) | Production                  obtained from the top of wells, includes                  condensates. |
|-----|----------------------------------------------------------------------------------------------------|

| (3) | Net                  natural gas production (gross production less natural gas                  reinjected). |
|-----|--------------------------------------------------------------------------------------------------------------|

| (4) | Includes                  proved reserves of natural gas in the Orinoco Belt, estimated to                  be 2.64                  billion boe at December 31, 2004. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Name                  of field** | **Location**                    | **2004****production** | **Year                  of****discovery** | **Proved****Reserves** | **Ratio****Res/Prod** |
|------------------------------------|---------------------------------|------------------------|-------------------------------------------|------------------------|-----------------------|
|                               | **(State                  of)** | **(mbpd)**             |                                      | **(mmb)**              | **(years)**           |
|                               |                            |                   |                                      |                   |                  |
| Zuata                  Principal   | Anzoátegui                 | 298                    | 1985                                      | 14,508                 | 133                   |
| Cerro                  Negro       | Anzoátegui                 | 142                    | 1979                                      | 7,183                  | 139                   |
| Cerro                  Negro       | Monagas                         | 36                     | 1979                                      | 6,371                  | 487                   |
| Tia                  Juana         | Zulia                           | 216                    | 1925                                      | 5,112                  | 65                    |
| Huyapari                           | Anzoátegui                 | 106                    | 1980                                      | 3,808                  | 98                    |
| Bachaquero                         | Zulia                           | 159                    | 1930                                      | 2,295                  | 39                    |
| Lagunillas                         | Zulia                           | 141                    | 1925                                      | 2,501                  | 48                    |
| Mulata                             | Monagas                         | 220                    | 1941                                      | 2,025                  | 25                    |
| Bare                               | Anzoátegui                 | 62                     | 1950                                      | 1,992                  | 88                    |
| Bloque                  VII Ceuta  | Zulia                           | 112                    | 1956                                      | 1,910                  | 47                    |
| El                  Furrial        | Monagas                         | 375                    | 1986                                      | 1,862                  | 14                    |
| Urdaneta                  Oeste    | Zulia                           | 138                    | 1955                                      | 1,527                  | 30                    |
| Boscan                             | Zulia                           | 112                    | 1946                                      | 1,568                  | 38                    |
| Santa                  Barbara     | Monagas                         | 140                    | 1941                                      | 1,519                  | 30                    |
| Uverito                            | Monagas                         | 0                      | 1981                                      | 1,216                  | -                     |
| Jobo                               | Monagas                         | 25                     | 1956                                      | 1,067                  | 118                   |

**Reserves**

----

*Table            of Contents*

***Crude        Oil.***

***Natural        Gas.***

----

*Table            of Contents*

|                                                                    |   | **2004**     |        | **2003**     |   | **2002**     |   | **2001**     |        | **2000**     |   |
|-------------------------------------------------------------------------|--------|--------------|-------------|--------------|--------|--------------|--------|--------------|-------------|--------------|--------|
|                                                                    |   |    |        |    |   |    |   |    |        |    |   |
| **Proved                  reserves:**                                   |   |    |        |    |   |    |   |    |        |    |   |
| Condensate                                                              |   |         | 1,867       |         |   | 1,919        |   |         | 1,900       |         |   | 1,723 |   |   | 1,772 |   |
| Light                                                                   |   |         | 9,830       |         |   | 10,078       |   |         | 10,012      |         |   | 10,345 |   |   | 10,244 |   |
| Medium                                                                  |   |         | 12,487      |         |   | 12,340       |   |         | 12,450      |         |   | 12,891 |   |   | 12,804 |   |
| Heavy                                                                   |   |         | 17,708      |         |   | 17,617       |   |         | 17,414      |         |   | 17,266 |   |   | 17,177 |   |
| Extra-heavy(1)                                                          |   |         | 38,690      |         |   | 35,186       |   |         | 35,381      |         |   | 35,558 |   |   | 35,688 |   |
| **Total                  crude oil**                                    |   |         | **80,582**  |         |   | **77,140**   |   |         | **77,157**  |         |   | **77,783** |   |   | **77,685** |   |
| **Ratio                  Res/Prod (years)**                             |   |         | **69**      |         |   | **74**       |   |         | **70**      |         |   | **63** |   |   | **64** |   |
|                                                                    |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Natural                  gas (bcf) (2)                                  |   |         | 151,479     |         |   | 150,040      |   |         | 147,111     |         |   | 148,294 |   |   | 147,587 |   |
| Natural                  gas in boe (2)                                 |   |         | 26,117      |         |   | 25,869       |   |         | 25,364      |         |   | 25,568 |   |   | 25,446 |   |
| **Total                  hydrocarbons in boe**                          |   |         | **106,699** |         |   | **103,009**  |   |         | **102,521** |         |   | **103,351** |   |   | **103,131** |   |
|                                                                    |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **Proved                  developed reserves:**                         |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Condensate                                                              |   |         | 387         |         |   | 416          |   |         | 419         |         |   | 747 |   |   | 814 |   |
| Light                                                                   |   |         | 2,772       |         |   | 2,760        |   |         | 2,716       |         |   | 3,590 |   |   | 3,803 |   |
| Medium                                                                  |   |         | 5,471       |         |   | 5,419        |   |         | 5,533       |         |   | 5,568 |   |   | 5,928 |   |
| Heavy                                                                   |   |         | 4,569       |         |   | 4,683        |   |         | 4,877       |         |   | 5,504 |   |   | 5,453 |   |
| Extra-heavy                  (1)                                        |   |         | 4,076       |         |   | 3,010        |   |         | 2,154       |         |   | 1,963 |   |   | 1,375 |   |
| **Total                  crude oil**                                    |   |         | **17,275**  |         |   | **16,288**   |   |         | **15,699**  |         |   | **17,372** |   |   | **17,373** |   |
|                                                                    |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| Natural                  gas (bcf)                                      |   |         | 106,035     |         |   | 105,030      |   |         | 102,190     |         |   | 103,808 |   |   | 103,310 |   |
| Natural                  gas in boe                                     |   |         | 18,282      |         |   | 18,109       |   |         | 17,619      |         |   | 17,898 |   |   | 17,812 |   |
| **Total                  hydrocarbons in boe**                          |   |         | **35,557**  |         |   | **34,397**   |   |         | **33,318**  |         |   | **35,270** |   |   | **35,185** |   |
|                                                                    |   |         |        |         |   |         |   |         |        |         |   |   |   |   |   |   |
| **Percent                  of proved developed to total reserves (3):** |   |         |        |         |   |         |   |         |        |         |   |   |
| Crude                  Oil                                              |   |         | 21          | %            |   | 21           | %      |         | 20          | %            |   | 22 | % |   | 22 | % |
| Natural                  gas                                            |   |         | 70          | %            |   | 70           | %      |         | 69          | %            |   | 70 | % |   | 70 | % |

| (1) | Proved                  reserves of extra-heavy crude oil located in the Orinoco Belt have                  a low                  development grade. Of the total proved reserves to be exploited                  under the                  Orinoco Belt Project, on December 31, 2004, approximately 4,076                  mmbls were                  developed under four association agreements in which we have an                  equity                  interest of less than 50%. See “Item 4.b Business overview—Initiatives                  Involving Private Sector                  Participation. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes                  13,649 bcf, 12,427 bcf, 12,454 bcf, 12,476 bcf and 12,505 bcf in                  each of                  2004, 2003, 2002, 2001 and 2000, respectively, associated with                  extra-heavy                  crude oil reserves. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Proved                  developed reserves divided by total proved                  reserves. |
|-----|-----------------------------------------------------------------------------------------------|

***New        Hydrocarbon Findings.***
* *

----

*Table            of Contents*

**Operations**

|                                            |   | **2004**     |    | **2003**     |   | **2002**     |   | **2001**     |    | **2000**     |   |
|-------------------------------------------------|--------|--------------|---------|--------------|--------|--------------|--------|--------------|---------|--------------|--------|
| **Exploration                  wells:**         |   |    |    |    |   |    |   |    |    |    |   |
| Completed                                       |   |         | 1       |         |   | 3            |   |         | 3       |         |   | 3 |   |   | 2 |   |
| Suspended                                       |   |         | 0       |         |   | 1            |   |         | 2       |         |   | 0 |   |   | 2 |   |
| Under                  evaluation               |   |         | 1       |         |   | 0            |   |         | 0       |         |   | 3 |   |   | 5 |   |
| In                  progress                    |   |         | 2       |         |   | 3            |   |         | 3       |         |   | 3 |   |   | 1 |   |
| Dry                  or abandoned               |   |         | 1       |         |   | 0            |   |         | 2       |         |   | 2 |   |   | 4 |   |
| **Total**                                       |   |         | **5**   |         |   | **7**        |   |         | **10**  |         |   | **11** |   |   | **14** |   |
| of                  which are carry-overs       |   |         | 1       |         |   | 5            |   |         | 7       |         |   | 5 |   |   | 9 |   |
|                                            |   |         |    |         |   |         |   |         |    |         |   |   |   |   |   |   |
| **Development                  wells drilled:** |   |         | **313** |         |   | **206**      |   |         | **366** |         |   | **479** |   |   | **474** |   |

| (1) | Includes                  wells in progress, even if they were wells spud in previous years,                  and                  injector wells. Does not include 26 development wells from PDVSA                  Gas and                  62 development wells (including 2 injector wells) attributable                  to our                  operating service agreements located in the Eastern Division. See                  “Initiatives Involving Private Sector Participation—Operating Service                  Agreements” below. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

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*Table            of Contents*

|                                                          |   | **2004**     |      | **2003**     |   | **2002**     |   | **2001**     |      | **2000**     |   |
|---------------------------------------------------------------|--------|--------------|-----------|--------------|--------|--------------|--------|--------------|-----------|--------------|--------|
|                                                          |   |    |      |    |   |    |   |    |      |    |   |
| **Production**                                                |   |    |      |    |   |    |   |    |      |    |   |
| **Crude                  oil:**                               |   |    |      |    |   |    |   |    |      |    |   |
| Condensate                                                    |   |         | 25        |         |   | 22           |   |         | 46        |         |   | 48 |   |   | 50 |   |
| Light                                                         |   |         | 767       |         |   | 727          |   |         | 774       |         |   | 1,135 |   |   | 1,174 |   |
| Medium                                                        |   |         | 1,001     |         |   | 914          |   |         | 962       |         |   | 1,018 |   |   | 1,047 |   |
| Heavy                                                         |   |         | 940       |         |   | 788          |   |         | 877       |         |   | 893 |   |   | 814 |   |
| **Total                  crude oil**                          |   |         | **2,733** |         |   | **2,451**    |   |         | **2,659** |         |   | **3,094** |   |   | **3,085** |   |
| Liquid                  petroleum gas                         |   |         | 166       |         |   | 144          |   |         | 173       |         |   | 173 |   |   | 167 |   |
| **Total                  crude oil and LPG**                  |   |         | **2,899** |         |   | **2,595**    |   |         | **2,832** |         |   | **3,267** |   |   | **3,252** |   |
|                                                          |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| **Natural                  gas (mmcfd):**                     |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| Gross                  production                             |   |         | 6,566     |         |   | 5,938        |   |         | 6,023     |         |   | 6,000 |   |   | 5,946 |   |
| Less:                  Reinjected                             |   |         | 2,747     |         |   | 2,506        |   |         | 2,351     |         |   | 1,907 |   |   | 1,967 |   |
| Net                  natural gas (mmcfd)                      |   |         | **3,819** |         |   | **3,432**    |   |         | **3,672** |         |   | **4,093** |   |   | **3,979** |   |
| **Net                  natural gas (in mbpd boe)**            |   |         | 658       |         |   | 592          |   |         | 633       |         |   | 706 |   |   | 686 |   |
| **Total                  hydrocarbons in boe**                |   |         | **3,557** |         |   | **3,187**    |   |         | **3,465** |         |   | **3,973** |   |   | **3,938** |   |
|                                                          |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| **PDVSA's                  crude oil production by basin:**   |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| Western                  Zulia Basin                          |   |         | 1,237     |         |   | 1,121        |   |         | 1,332     |         |   | 1,567 |   |   | 1,536 |   |
| Western                  Barinas - Apure Basin                |   |         | 85        |         |   | 86           |   |         | 93        |         |   | 109 |   |   | 115 |   |
| Eastern                  Basin                                |   |         | 1,411     |         |   | 1,244        |   |         | 1,234     |         |   | 1,418 |   |   | 1,434 |   |
| **Total                  crude oil**                          |   |         | **2,733** |         |   | **2,451**    |   |         | **2,659** |         |   | **3,094** |   |   | **3,085** |   |
|                                                          |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| **Natural                  gas production by basin (mmcfd):** |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| Western                  Zulia Basin                          |   |         | 1,187     |         |   | 1,031        |   |         | 1,261     |         |   | 1,408 |   |   | 1,665 |   |
| Western                  Barinas - Apure Basin                |   |         | 4         |         |   | 6            |   |         | 8         |         |   | 7 |   |   | 7 |   |
| Eastern                  Basin                                |   |         | 5,375     |         |   | 4,901        |   |         | 4,754     |         |   | 4,585 |   |   | 4,274 |   |
| **Total                  natural gas**                        |   |         | **6,566** |         |   | **5,938**    |   |         | **6,023** |         |   | **6,000** |   |   | **5,946** |   |
|                                                          |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| **Average                  export price (2):**                |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| Crude                  oil ($ per barrel)                     |   |         | 32.22     |         |   | 24.35        |   |         | 21.19     |         |   | 18.95 |   |   | 24.94 |   |
| Gas                  ($ per mcf)                              |   |         | 0.74      |         |   | 0.61         |   |         | 0.71      |         |   | 0.88 |   |   | 0.90 |   |
|                                                          |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| **Average                  production cost ($/boe) (3)**      |   |         |      |         |   |         |   |         |      |         |   |   |   |   |   |   |
| Including                  operating service agreements       |   |         | 3.77      |         |   | 3.85         |   |         | 3.92      |         |   | 3.38 |   |   | 3.48 |   |
| Excluding                  operating service agreements       |   |         | 3.29      |         |   | 2.06         |   |         | 2.42      |         |   | 2.17 |   |   | 2.22 |   |

| (1) | See                  “Item 4.b Business overview—Initiatives Involving Private Sector                  Participation—Operating Service                  Agreements.” |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Including                  sales to subsidiaries and                  affiliates. |
|-----|-----------------------------------------------------------------------------------|

| (3) | The                  combined average production cost per barrel (for crude oil, natural                  gas                  and liquid petroleum gas), is calculated by dividing the sum of                  all direct                  and indirect production costs (including our own consumption but                  not                  including depreciation and depletion); by the combined total production                  volumes of crude oil, natural gas and liquid petroleum                  gas. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Venezuelan        Crude Oil Production: **

----

*Table            of Contents*

**Initiatives        Involving Private Sector Participation**

***Operating        Service Agreements:***

|                                               |   | **2004**     |   | **2003**     |   | **2002**     |   | **2001**     |   | **2000**     |   |
|----------------------------------------------------|--------|--------------|--------|--------------|--------|--------------|--------|--------------|--------|--------------|--------|
|                                               |   |    |   |    |   |    |   |    |   |    |   |
| Proved                  reserves (mmbls) (1)       |   |         | 5,491  |         |   | 5,446        |   |         | 5,501  |         |   | 5,600 |   |   | 5,479 |   |
| Proved                  developed reserves (mmbls) |   |         | 1,167  |         |   | 1,267        |   |         | 1,935  |         |   | 1,523 |   |   | 1,413 |   |
| Production                  (mbpd)                 |   |         | 519    |         |   | 465          |   |         | 481    |         |   | 502 |   |   | 466 |   |

| (1) | Portion                  of reserves in fields assigned to operating service agreements                  as of                  December 31 of the year in which each such operating agreement                  went into                  effect. Such agreements will not necessarily result in the exploitation                  of                  100% of those reserves during their term. It included 50 mmbls                  at Socorro                  field and 70 mmbls at Mara field related to Operating Service Agreement                  with National Universities. See “Item 4.B Business overview—Initiatives                  Involving Private Sector Participation—Operating Service                  Agreements.” |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  First and Second Rounds. A total of 27 oil companies (grouped in                  different                  consortiums) were awarded rights to drill 15 oil fields. Since                  then, some                  companies have changed their participation in the different consortiums.                  In 2003, Anadarko bought the participation of Union Pacific in                  the                  Oritupano-Leona field; ExxonMobil bought the participation of Ampolex                  in                  Quiamare-La Ceiba field and Repsol-YPF bought the participation                  of Union                  Pacific in the West Guarico field. An average of 320 mbpd of crude                  oil was                  produced from these fields in 2004. As of December 31, 2004, these                  fields                  had estimated proved reserves of approximately 4.0 billion barrels                  of                  crude oil. Under this initiative, foreign companies have invested                  $5,779                  million since 1992 until December                  2005. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

|   | · | The                  Third Round. We auctioned the right to reactivate, rehabilitate,                  develop                  and additionally explore certain hydrocarbon reservoirs in 17 fields,                  one                  of which is currently inactive. In 2003, ENI bought the participation                  of                  Lasmo in the Dación field. An average of 199 mbpd of crude oil was                  produced from these fields in 2004. As of December 31, 2004, these                  fields                  had estimated proved reserves of approximately 1.4 billion barrels                  of                  crude oil. Under this initiative, the operator companies have invested                  $3,599 million since 1997 until December                  2005. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

| **Area**                                      | **Consortium                  (Operator)**                                                                                                               | **mmbls                  (1)** |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|
| **First                  and Second Rounds:** |                                                                                                                                                     |                           |
| Boscán                                   | Chevron                  Global Technology Services Co.                                                                                                  | 1,620.6                        |
| Urdaneta/West                                 | Shell                  Venezuela S.A.                                                                                                                    | 856.4                          |
| DZO                                           | B.P.                  Venezuela Holdings, Ltd.                                                                                                           | 363.8                          |
| Oritupano/Leona                               | Petrobras                  Energía Venezuela, S.A., Servicios Corod de Venezuela,                  Anadarko                                         | 277.0                          |
| Colón                                    | Tecpetrol                  Venezuela, CMS Oil and Gas, Coparex                                                                                           | 124.2                          |
| Quiamare/                  La Ceiba           | Repsol-YPF                  Venezuela, S.A., Tecpetrol Venezuela, ExxonMobil                                                                             | 90.4                           |
| Quiriquire                                    | Repsol-YPF                  Venezuela, S.A.                                                                                                              | 58.0                           |
| Pedernales                                    | Perenco                                                                                                                                                  | 114.0                          |
| Monagas                  Sur                  | Benton                  Oil & Gas, Vinccler                                                                                                     | 145.1                          |
| Sanvi/Güere                              | Teikoku                  Oil De Sanvi Güere, C.A.                                                                                                   | 83.8                           |
| Guárico                  East            | Teikoku                  Oil De Venezuela C.A.                                                                                                           | 66.0                           |
| Jusepín                                  | Total                  Oil and Gas de Venezuela, B.V., B.P. Venezuela Holding,                  Ltd.                                                     | 121.3                          |
| Guárico                  West            | Repsol-YPF                  Venezuela, S.A.                                                                                                              | 42.1                           |
| Falcón                  East             | Vinccler                                                                                                                                                 | 16.6                           |
| Falcón                  West             | West                  Falcon Samson                                                                                                                      | 3.5                            |
| **Subtotal**                                  |                                                                                                                                                     | **3,982.8**                    |
| **Third                  Round:**             |                                                                                                                                                     |                           |
| Boquerón                                 | B.P.                  Venezuela Holding, Ltd., Preussag Energie GmbH                                                                                     | 82.4                           |
| LL-652                                        | Chevron                  Global Technology, Statoil, B.P. Venezuela Holding, Ltd., Petróleo y Gas                  Inversiones, C.A.                | 168.6                          |
| Dación                                   | ENI                                                                                                                                                      | 184.9                          |
| Intercampo                  norte             | China                  National Petroleum Corp.                                                                                                          | 62.6                           |
| Caracoles                                     | China                  National Petroleum Corp.                                                                                                          | 110.6                          |
| B2X                  68/79                    | Nimir                  Petroleum Company Limited, Ehcopek Petróleo, S.A., Cartera de Inversiones                  Petroleras II, C.A.               | 106.8                          |
| Mene                  grande                  | Repsol-YPF                  Venezuela, S.A.                                                                                                              | 116.5                          |
| Mata                                          | Inversora                  Mata, Petrobras Energía de Venezuela, S.A., Petrolera Mata                                                               | 88.1                           |
| B2X                  70/80                    | Pancanadian                  Petroleum Venezuela, S.A., Nimir Petroleum Company Limited                                                                  | 76.3                           |
| Kaki                                          | Inemaka,                  Inversiones Polar, Petróleo y Gas Inversiones, C.A.                                                                       | 37.5                           |
| Ambrosio                                      | Perenco,                  Petróleo y Gas Inversiones, C.A.                                                                                          | 51.3                           |
| Onado                                         | Compañía                  General Combustibles, Carmanah Resources, Korea Petroleum, Bco                  Popular Del                  Ecuador | 50.7                           |
| La                  Concepción           | Petrobras                  Energía de Venezuela, S.A., Williams Companies, Inc.                                                                | 119.0                          |
| Cabimas                                       | Preussag                  Energy GmbH, Suelopetrol                                                                                                       | 54.5                           |
| Casma                  Anaco                  | Cosa-Ingenieros                  Consultores, Cartera de Inversiones Venezolanas, Phoenix International,                  C.A., Rosewood North Sea, Open | 11.8                           |
| Maulpa                                        | Inemaka,                  Inversiones Polar, Petróleo y Gas Inversiones, C.A.                                                                       | 32.2                           |
| Acema                                         | Coroil,                  Petrobras Energía de Venezuela, S.A.                                                                                       | 34.1                           |
| **Subtotal**                                  |                                                                                                                                                     | **1,387.9**                    |
| **Total**                                     |                                                                                                                                                     | **5,370.7**                    |

| (1) | These                  proved crude oil reserves correspond to the fields assigned to                  each of the                  operating service agreements and are included in our total proved                  crude                  oil reserves. Such operating service agreements will not necessarily                  result in the exploitation of 100% of those reserves during their                  term.                  See “Item 4.b Business overview—Exploration and                  Production—Reserves.” |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

***Migration        of Operating Service Agreements to Empresas Mixtas***

| **Migration                  Fields**    | **Previous                  Operator** | **PDVSA’s                  Participation in the****Empresas                  Mixtas** |
|------------------------------------------|----------------------------------------|---------------------------------------------------------------------------------------------|
| Kaki                                     | Inemaka                                | 60%                                                                                         |
| Cabimas                                  | Suelopetrol                            | 60%                                                                                         |
| Onado                                    | CGC                                    | 60%                                                                                         |
| Guárico                  Oriental   | Teikoku                                | 70%                                                                                         |
| Mene                  Grande             | Repsol                                 | 60%                                                                                         |
| Quiriquire                               | Repsol                                 | 60%                                                                                         |
| Boscán                              | Chevron                                | 60%                                                                                         |
| LL-652                                   | Chevron                                | 75%                                                                                         |
| Falcón                  Este        | Vinccler                               | 60%                                                                                         |
| Falcón                  Oeste       | Vinccler                               | 60%                                                                                         |
| Casma                  Anaco             | Open                                   | 60%                                                                                         |
| Colón                               | Tecpetrol                              | 60%                                                                                         |
| Uradaneta                                | Shell                                  | 60%                                                                                         |
| Acema                                    | Petrobrás                         | 60%                                                                                         |
| La                  Concepción      | Petrobrás                         | 60%                                                                                         |
| Mata                                     | Petrobrás                         | 60%                                                                                         |
| Oritupano-Leona                          | Petrobrás                         | 60%                                                                                         |
| Pedernales                               | Parenco                                | 60%                                                                                         |
| Ambrosio                                 | Parenco                                | 60%                                                                                         |
| B2X                  70/80               | Hocol                                  | 80%                                                                                         |
| Monagas                  Sur             | Harvest                                | 60%                                                                                         |
| Cara                  Coles              | CNPC                                   | 75%                                                                                         |
| Intercampo                  Norte        | CNPC                                   | 75%                                                                                         |
| DZO                                      | BP                                     | 60%                                                                                         |
| Boquerón                            | BP                                     | 60%                                                                                         |
| **Returned                  Fields**     | **Previous                  Operator** | **PDVSA'S                  Participation****in                  the Empresas Mixtas**       |
| B2X                  68/79               | Hocal                                  | 100%                                                                                        |
| Maulpa                                   | Inemaka                                | 100%                                                                                        |
| Sanvi                  Guere             | Teikoku                                | 100%                                                                                        |
| Guárico                  Occidental | Repsol                                 | 100%                                                                                        |
| Quiamare-La                  Ceiba       | Repsol                                 | 100%                                                                                        |
| **No                  Agreement**        | **Previous                  Operator** | **PDVSA's                  Paricipation****in                  the Empresas Mixtas**        |
| Dación                              | ENI                                    | 100%                                                                                        |
| Jusepín                             | Total                                  | 100%                                                                                        |
|                                     |                                   |                                                                                        |

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*Table            of Contents*

***Exploration        and Production in New Areas under Operation Service        Agreements.***

| **Field**                           |   | **CVP                  Partners**                               |   | **Mixed                  companies**                                   |
|-------------------------------------|--------|-----------------------------------------------------------------|--------|------------------------------------------------------------------------|
| Western                  Paria Gulf |   | Conoco                  Venezuela, C.A. - ENI - OPIC (1)        |   | Compañía                  Agua Plana, S.A.                   |
|                                |   |                                                            |   |                                                                   |
| Eastern                  Paria Gulf |   | Ineparia                  - Conoco Venezuela, C.A. - ENI - OPIC |   | Administradora                  del Golfo de Paria Este, S.A.          |
| La                  Ceiba           |   | ExxonMobil                  - PetroCanada                       |   | Administradora                  Petrolera La Ceiba, C.A.               |
| San                  Carlos (1)     |   | Petrobras                  Venezuela                            |   | Compañía                  Anónima Mixta San Carlos S.A. |

| (1) | A                  gas license was granted in 2002. |
|-----|-----------------------------------------------------|

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*Table            of Contents*

***Orinoco        Belt Extra-Heavy Crude Oil Projects.***

|   | · | The                  Petrozuata Joint Venture. Petrozuata is a company owned by PDVSA                  Petróleo                  (a subsidiary of PDVSA) and ConocoPhillips. The construction of                  facilities                  at Petrozuata began in 1997. Initial production of extra-heavy                  crude oil                  commenced in September 1998. Upgraded facilities were completed                  in 2001.                  During 2004, Petrozuata produced 124 mbpd of extra-heavy crude                  oil and 104                  mbpd of upgraded crude oil with an average API gravity ranging                  from 16° to                  19°. Under the terms of the joint venture agreement, ConocoPhillips                  has                  agreed to undertake the refining process at its Lake Charles refinery,                  in                  Lake Charles, Louisiana. By December 2005, total investments in                  this                  project amounted to $3,478 million. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Sincor Joint Venture. Sincrudos de Oriente is a joint venture owned                  by                  PDVSA Sincor (a subsidiary of PDVSA), TotalFina and Statoil. In                  2004, this                  joint venture produced 174 mbpd of extra-heavy crude oil and 137                  mbpd of                  upgraded crude oil with an average API gravity ranging from 26° to 32°. We                  anticipate that this joint venture will reach a production level                  of 170                  mbpd of upgraded crude oil by 2007. By December 2005, total investments                  in                  this project amounted to $4,185                  million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Hamaca Joint Venture. Petrolera Hamaca is a company owned by Corpoguanipa                  (a subsidiary of PDVSA), ChevronTexaco and ConocoPhillips. Hamaca                  started                  producing upgraded crude oil in October 2004. In that year, this                  joint                  venture produced 107 mbpd of extra-heavy crude oil and 93 mbpd                  of upgraded                  crude oil with an average API gravity ranging from 24° to 26°, and average                  production of diluted crude oil was 140 mbpd with an average gravity                  of                  16° API. By December 2005, total investments in this project amounted                  to                  $3,481 million, of which, $937 million was invested in                  2004. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  Cerro Negro Joint Venture. Petrolera Cerro Negro is a company owned                  by                  PDVSA Cerro Negro, S.A. (a subsidiary of PDVSA), ExxonMobil and                  BP                  (formerly Veba Oel). Pursuant to the terms of this joint venture                  agreement, we have agreed to sell our share of upgraded crude oil                  produced                  by this joint venture (approximately 80% of total production) to                  Chalmette                  Refining, a refinery in Chalmette, Louisiana, which is an equal                  share                  joint venture between PDVSA and ExxonMobil. During 2004, this joint                  venture produced 119 mbpd of extra-heavy crude oil and 105 mbpd                  of                  upgraded crude oil with an average API gravity of 16°. By December 2005,                  total investments in this project amounted to $2,723 million, and                  include                  only the investments up to the startup of commercial production.                  See “Item                  4.B Business overview—Refining and Marketing—Refining” and note 10(a) to                  our consolidated financial statements, included in “Item 18. Financial                  Statements.” |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

| **Project**                  |   | **Private                  Sector Participants** |   | **PDVSA’s****Interest** |   | **Reserves****(1)** |   | **Production****(2)** |   | **Range                  API****(3)** |
|------------------------------|--------|--------------------------------------------------|--------|-------------------------------|--------|---------------------|--------|-----------------------|--------|---------------------------------------|
|                         |   |                                             |   | **(%)**                       |   | **(mmbls)**         |   | **(mbpd)**            |   | **(degrees)**                         |
|                         |   |                                             |   |                          |   |                |   |                  |   |                                  |   |
| Petrozuata                   |   | ConocoPhillips                                   |   | 49.90                         |   | 2,522               |   | 104                   |   | 16                                    | 19 |
| Sincor                       |   | TotalFina,                  Statoil              |   | 38.00                         |   | 3,434               |   | 137                   |   | 26                                    | 32 |
| Hamaca                       |   | ChevronTexaco,                  ConocoPhillips   |   | 30.00                         |   | 3,808               |   | 93                    |   | 24                                    | 26 |
| Cerro                  Negro |   | ExxonMobil,                  BP (4)              |   | 41.67                         |   | 3,330               |   | 105                   |   | 16                                    | 16 |

| (1) | Gross                  proved reserves |
|-----|----------------------------------------|

| (2) | Estimated                  production of upgraded crude oil |
|-----|-------------------------------------------------------------|

| (3) | Expected                  average API of upgraded crude oil |
|-----|-------------------------------------------------------------|

| (4) | Formerly                  Veba Oel |
|-----|------------------------------------|

***Operating        Service Agreement with National Universities.***

**Overview        of Main Projects with Private Sector Participation.**

***The        Plataforma Deltana Project.***

----

*Table            of Contents*

**Refining        and Marketing**

**Refining**

----

*Table            of Contents*

----

*Table            of Contents*

|                                                      |   |      |                            |                  |   | **Refining                  Capacity**                         |   |
|-----------------------------------------------------------|--------|-----------|---------------------------------|-----------------------|--------|----------------------------------------------------------------|--------|
| **Location**                                              |   | **Owner** |                            | **PDVSA****Interest** |   | **Total                  Rated****Crude                  Oil** |   | **PDVSA****Net                  Interest** |   |
|                                                      |   |      |                            | **(%)**               |   | **(mbpd)**                                                     |   | **(mbpd)** |   |
| **Venezuela:**                                            |   |      |                            |                  |   |                                                           |   |   |   |
| CRP,                  Falcón                         |   |      | PDVSA                           |                  |   | 100                                                            |   |   | 940 |   |   | 940 |   |
| Puerto                  La Cruz, Anzoátegui          |   |      | PDVSA                           |                  |   | 100                                                            |   |   | 203 |   |   | 203 |   |
| El                  Palito, Carabobo (1)                  |   |      | PDVSA                           |                  |   | 100                                                            |   |   | 140 |   |   | 140 |   |
| Bajo                  Grande, Zulia                       |   |      | PDVSA                           |                  |   | 100                                                            |   |   | 15 |   |   | 15 |   |
| San                  Roque, Anzoátegui               |   |      | PDVSA                           |                  |   | 100                                                            |   |   | 5 |   |   | 5 |   |
| **Total                  Venezuela**                      |   |      |                            |                  |   |                                                           |   |   | **1,303** |   |   | **1,303** |   |
|                                                      |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| **Netherlands                  Antilles (Curaçao):** |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| Isla                  (2)                                 |   |      | PDVSA                           |                  |   | 100                                                            |   |   | **335** |   |   | **335** |   |
|                                                      |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| **United                  States:**                       |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| Lake                  Charles, Louisiana                  |   |      | CITGO                           |                  |   | 100                                                            |   |   | 320 |   |   | 320 |   |
| Corpus                  Christi, Texas                    |   |      | CITGO                           |                  |   | 100                                                            |   |   | 157 |   |   | 157 |   |
| Paulsboro,                  New Jersey                    |   |      | CITGO                           |                  |   | 100                                                            |   |   | 84 |   |   | 84 |   |
| Savannah,                  Georgia                        |   |      | CITGO                           |                  |   | 100                                                            |   |   | 28 |   |   | 28 |   |
| Houston,                  Texas                           |   |      | LCR                  (3)        |                  |   | 41                                                             |   |   | 265 |   |   | 109 |   |
| Lemont,                  Illinois                         |   |      | CITGO                           |                  |   | 100                                                            |   |   | 167 |   |   | 167 |   |
| Chalmette,                  Louisiana                     |   |      | Chalmette                  (4)  |                  |   | 50                                                             |   |   | 184 |   |   | 92 |   |
| Saint                  Croix, U.S. Virgin Islands         |   |      | Hovensa                  (5)    |                  |   | 50                                                             |   |   | 495 |   |   | 248 |   |
| **Total                  United States**                  |   |      |                            |                  |   |                                                           |   |   | **1,700** |   |   | **1,205** |   |
|                                                      |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| **Europe:**                                               |   |      |                            |                  |   |                                                           |   |   |   |   |   |   |   |
| Gelsenkirchen,                  Germany                   |   |      | Ruhr                  (6)       |                  |   | 50                                                             |   |   | 230 |   |   | 115 |   |
| Schwedt,                  Germany                         |   |      | Ruhr                  (6)       |                  |   | 19                                                             |   |   | 240 |   |   | 45 |   |
| Neustadt,                  Germany                        |   |      | Ruhr                  (6)       |                  |   | 13                                                             |   |   | 260 |   |   | 33 |   |
| Karlsruhe,                  Germany                       |   |      | Ruhr                  (6)       |                  |   | 12                                                             |   |   | 312 |   |   | 37 |   |
| Nynäshamn,                  Sweden                   |   |      | Nynäs                  (7) |                  |   | 50                                                             |   |   | 29 |   |   | 15 |   |
| Gothenburg,                  Sweden                       |   |      | Nynäs                  (7) |                  |   | 50                                                             |   |   | 11 |   |   | 5 |   |
| Dundee,                  Scotland                         |   |      | Nynäs                  (7) |                  |   | 50                                                             |   |   | 9 |   |   | 4 |   |
| Eastham,                  England                         |   |      | Nynäs                  (7) |                  |   | 25                                                             |   |   | 18 |   |   | 5 |   |
| **Total                  Europe**                         |   |      |                            |                  |   |                                                           |   |   | **1,109** |   |   | **259** |   |
| **Worldwide                  Total**                      |   |      |                            |                  |   |                                                           |   |   | **4,447** |   |   | **3,102** |   |

| (1) | The                  distillation atmospheric unit of El Palito Refinery was increased                  through                  an optimization project performed at the end of                  2002. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Leased                  in 1994. The lease expires in 2019. |
|-----|-------------------------------------------------------------|

| (3) | Lyondell-Citgo                  Refining (LCR), a joint venture with Lyondell Chemical                  Company. |
|-----|------------------------------------------------------------------------------------------------------------------|

| (4) | A                  joint venture with ExxonMobil. |
|-----|---------------------------------------------------|

| (5) | A                  joint venture with Hess. |
|-----|---------------------------------------------|

| (6) | A                  joint venture with Deutsche BP. |
|-----|----------------------------------------------------|

| (7) | A                  joint venture with Neste Oil. |
|-----|--------------------------------------------------|

----

*Table            of Contents*

**Venezuela        and the Caribbean.**

**South        America.**

**United        States. **

----

*Table            of Contents*

----

*Table            of Contents*

**Europe.**

----

*Table            of Contents*

|                                                             |   | **2004** |      | **2003** |     | **2002** |                |
|------------------------------------------------------------------|--------|----------|-----------|----------|----------|----------|---------------------|
|                                                             |   | **mbpd** |           |     | **mbpd** |          |                | **mbpd** |  |   |
|                                                             |   |     |      |     |     |     |                |   |   |   |   |   |   |
| **Total                    Refining Capacity**                   |   |     | **4,447** |     |     |     |                |   | **4,437** |   |   |   |   |   | **4,368** |   |   |   |   |
| **PDVSA's                    net interest in refining capacity** |   |     | **3,102** |     |     |     |                |   | **3,092** |   |   |   |   |   | **3,085** |   |   |   |   |
|                                                             |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Refinery                    input (1)**                        |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Crude                    Oil - Sourced by PDVSA (2)**          |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Light                                                            |   |     | 350       |     |     | 12       | %    |   | 560 |   |   | 20 | %    |   | 565 |   |   | 21 | % |
| Medium                                                           |   |     | 678       |     |     | 24       | %                   |   | 821 |   |   | 30 | % |   | 850 |   |   | 32 | % |
| Heavy                                                            |   |     | 932       |     |     | 33       | %                   |   | 475 |   |   | 17 | % |   | 433 |   |   | 16 | % |
| Sub-total                                                        |   |     | 1,960     |     |     | 69       | %                   |   | 1,856 |   |   | 67 | % |   | 1,848 |   |   | 70 | % |
| **Crude                    Oil - Sourced by Others**             |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Light                                                            |   |     | 378       |     |     | 13       | %                   |   | 308 |   |   | 11 | % |   | 330 |   |   | 12 | % |
| Medium                                                           |   |     | 86        |     |     | 3        | %                   |   | 137 |   |   | 5 | % |   | 84 |   |   | 3 | % |
| Heavy                                                            |   |     | 136       |     |     | 5        | %                   |   | 88 |   |   | 3 | % |   | 26 |   |   | 1 | % |
| Sub-total                                                        |   |     | 600       |     |     | 21       | %                   |   | 533 |   |   | 19 | % |   | 440 |   |   | 17 | % |
| **Other                    Feedstocks**                          |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Sourced                    by PDVSA                              |   |     | 191       |     |     | 7        | %                   |   | 242 |   |   | 9 | % |   | 250 |   |   | 9 | % |
| Sourced                    by Others                             |   |     | 103       |     |     | 4        | %                   |   | 147 |   |   | 5 | % |   | 120 |   |   | 5 | % |
| Sub-total                                                        |   |     | 294       |     |     | 10       | %                   |   | 389 |   |   | 14 | % |   | 370 |   |   | 14 | % |
| **Total                    Refining Input (3)**                  |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Sourced                    by PDVSA                              |   |     | 2,151     |     |     | 75       | %                   |   | 2,098 |   |   | 76 | % |   | 2,098 |   |   | 79 | % |
| Sourced                    by Others                             |   |     | 703       |     |     | 25       | %                   |   | 680 |   |   | 24 | % |   | 560 |   |   | 21 | % |
| **Total                    refinery input**                      |   |     | **2,854** |     |     | **100**  | **%**               |   | **2,778** |   |   | **100** | **%** |   | **2,658** |   |   | **100** | **%** |
| Crude                    Utilization (4)                         |   |     | 83        | %        |     |     |                |   | 77 | % |   |   |   |   | 74 | % |   |   |   |
|                                                             |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Product                    Yield (5)**                         |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Gasoline                    / Naptha                             |   |     | 960       |     |     | 34       | %                   |   | 969 |   |   | 35 | % |   | 951 |   |   | 36 | % |
| Distillate                                                       |   |     | 942       |     |     | 33       | %                   |   | 874 |   |   | 31 | % |   | 817 |   |   | 31 | % |
| Low                    Sulfur Residual                           |   |     | 60        |     |     | 2        | %                   |   | 47 |   |   | 2 | % |   | 30 |   |   | 1 | % |
| High                    Sulfur Residual                          |   |     | 212       |     |     | 7        | %                   |   | 339 |   |   | 12 | % |   | 273 |   |   | 10 | % |
| Asphalt                    / Coke                                |   |     | 147       |     |     | 5        | %                   |   | 182 |   |   | 7 | % |   | 177 |   |   | 7 | % |
| Naphthenic                    Specialty Oil                      |   |     | 14        |     |     | 0        | %                   |   | 9 |   |   | 0 | % |   | 12 |   |   | 0 | % |
| Petrochemicals                                                   |   |     | 88        |     |     | 3        | %                   |   | 110 |   |   | 4 | % |   | 92 |   |   | 3 | % |
| Others                                                           |   |     | 500       |     |     | 18       | %                   |   | 170 |   |   | 6 | % |   | 225 |   |   | 8 | % |
| **Net                    output**                                |   |     | **2,923** |     |     | **102**  | **%**               |   | **2,700** |   |   | **97** | **%** |   | **2,577** |   |   | **97** | **%** |
| Consumption,                    net (gain)/loss                  |   |     | (69       | )        |     | -2       | %                   |   | 78 |   |   | 3 | % |   | 81 |   |   | 3 | % |
| **Total                    yield**                               |   |     | **2,854** |     |     | **100**  | **%**               |   | **2,778** |   |   | **100** | **%** |   | **2,658** |   |   | **100** | **%** |

| (1) | Our                  refineries sourced 75%, 78% and 81% of our total crude oil requirements                  from crude oil produced by us in 2004, 2003 and 2002,                  respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Sourced                  by us (including supplies from entities that are not subject to                  our                  control). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes                  our interest in crude oil and other                  feedstock. |
|-----|-------------------------------------------------------------------------------------------|

| (4) | Crude                  oil refinery input divided by the net interest in refining                  capacity. |
|-----|--------------------------------------------------------------------------------------------------------------|

| (5) | Our                  interest in product yield. |
|-----|-------------------------------------------------|

----

*Table            of Contents*

**Marketing**

|                                            |   | **2004** |      | **2003** |     | **2002** |                |
|-------------------------------------------------|--------|----------|-----------|----------|----------|----------|---------------------|
|                                            |   | **mbpd** |           |     | **mbpd** |          |                | **mbpd** |  |   |
| **Crude                  oil (1)**              |   |     |      |     |     |     |                |   |   |   |   |   |   |
| Light                                           |   |     | 624       |     |     | 35       | %    |   | 657 |   |   | 40 | %    |   | 672 |   |   | 38 | % |
| Medium                                          |   |     | 298       |     |     | 17       | %                   |   | 299 |   |   | 18 | % |   | 360 |   |   | 20 | % |
| Heavy                  and extra-heavy          |   |     | 852       |     |     | 48       | %                   |   | 692 |   |   | 42 | % |   | 732 |   |   | 42 | % |
| **Sub-total                  crude oil**        |   |     | **1,774** |     |     | **100**  | **%**               |   | **1,648** |   |   | **100** | **%** |   | **1,764** |   |   | **100** | **%** |
|                                            |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Refined                  products**           |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Gasoline                  / naphta              |   |     | 103       |     |     | 16       | %                   |   | 108 |   |   | 22 | % |   | 137 |   |   | 21 | % |
| Distilates                  (2)                 |   |     | 178       |     |     | 27       | %                   |   | 167 |   |   | 33 | % |   | 231 |   |   | 36 | % |
| High                  sulfur residual           |   |     | 185       |     |     | 28       | %                   |   | 134 |   |   | 27 | % |   | 149 |   |   | 23 | % |
| Liquid                  petroleum gas           |   |     | 49        |     |     | 7        | %                   |   | 51 |   |   | 10 | % |   | 56 |   |   | 9 | % |
| Other                                           |   |     | 145       |     |     | 22       | %                   |   | 42 |   |   | 8 | % |   | 74 |   |   | 11 | % |
| **Sub-total                  products**         |   |     | **660**   |     |     | **100**  | **%**               |   | **502** |   |   | **100** | **%** |   | **647** |   |   | **100** | **%** |
|                                            |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total                  Exports (3)**          |   |     | **2,434** |     |     |     |                |   | **2,150** |   |   |   |   |   | **2,411** |   |   |   |   |
|                                            |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Average                  Sales Price ($/Bl)** |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude                  oil:                     |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Light                  crudes                   |   |     | 36.57     |     |     |     |                |   | 27.16 |   |   |   |   |   | 23.46 |   |   |   |   |
| Medium,                  heavy and extra-heavy  |   |     | 29.86     |     |     |     |                |   | 22.56 |   |   |   |   |   | 20.24 |   |   |   |   |
| Crude                  oil                      |   |     | 32.22     |     |     |     |                |   | 24.35 |   |   |   |   |   | 21.19 |   |   |   |   |
| Refined                  products               |   |     | 34.66     |     |     |     |                |   | 26.53 |   |   |   |   |   | 24.23 |   |   |   |   |
| **Average                  export price**       |   |     | **32.88** |     |     |     |                |   | **24.89** |   |   |   |   |   | **21.94** |   |   |   |   |

| (1) | Includes                  sales of crude oil to subsidiaries and affiliated refineries (including                  to                  the Isla Refinery in Curaçao) of 1,158 mbpd, 1,117 mbpd and 1,099 mbpd in                  2004, 2003 and 2002, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes                  kerosene. |
|-----|-------------------------------------|

| (3) | Does                  not include Orimulsion export volumes of 53 mbpd, 91 mbpd and 93                  mbpd in                  2004, 2003 and 2002, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|                                                          |   | **2004** |      | **2003** |     | **2002** |                |
|---------------------------------------------------------------|--------|----------|-----------|----------|----------|----------|---------------------|
|                                                          |   | **mbpd** |           |     | **mbpd** |          |                | **mbpd** |  |   |
| **Crude                  Oil by Area**                        |   |     |      |     |     |     |                |   |   |   |   |   |   |
| **United                  States and Canada**                 |   |     |      |     |     |     |                |   |   |   |   |   |   |
| Affiliates                                                    |   |     | 696       |     |     | 39       | %    |   | 579 |   |   | 35 | %    |   | 678 |   |   | 38 | % |
| Third                  Parties                                |   |     | 328       |     |     | 18       | %                   |   | 344 |   |   | 21 | % |   | 375 |   |   | 21 | % |
| Sub-Total                  United States and Canada           |   |     | 1,024     |     |     | 58       | %                   |   | 923 |   |   | 56 | % |   | 1,053 |   |   | 60 | % |
| **Europe**                                                    |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Affiliates                                                    |   |     | 56        |     |     | 3        | %                   |   | 65 |   |   | 4 | % |   | 61 |   |   | 3 | % |
| Third                  Parties                                |   |     | 8         |     |     | 0        | %                   |   | 23 |   |   | 1 | % |   | 73 |   |   | 4 | % |
| Sub-Total                  Europe                             |   |     | 64        |     |     | 4        | %                   |   | 88 |   |   | 5 | % |   | 134 |   |   | 8 | % |
| **Caribbean                  and Central America**            |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Affiliates                                                    |   |     | 406       |     |     | 23       | %                   |   | 473 |   |   | 29 | % |   | 360 |   |   | 20 | % |
| Third                  Parties                                |   |     | 239       |     |     | 13       | %                   |   | 99 |   |   | 6 | % |   | 140 |   |   | 8 | % |
| Sub-Total                  Europe                             |   |     | 645       |     |     | 36       | %                   |   | 572 |   |   | 35 | % |   | 500 |   |   | 28 | % |
| **South                  America and Others**                 |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| Affiliates                                                    |   |     | 0         |     |     | 0        | %                   |   | 0 |   |   | 0 | % |   | 0 |   |   | 0 | % |
| Third                  Parties                                |   |     | 41        |     |     | 2        | %                   |   | 65 |   |   | 4 | % |   | 77 |   |   | 4 | % |
| Sub-Total                  Europe                             |   |     | 41        |     |     | 2        | %                   |   | 65 |   |   | 4 | % |   | 77 |   |   | 4 | % |
| **Total                  Crude Oil**                          |   |     | **1,774** |     |     | **100**  | **%**               |   | **1,648** |   |   | **100** | **%** |   | **1,764** |   |   | **100** | **%** |
|                                                          |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Crude                  Oil and Refined Petroleum Products** |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Light                  Crude Oil**                          |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| United                  States and Canada                     |   |     | 236       |     |     | 13       | %                   |   | 273 |   |   | 17 | % |   | 256 |   |   | 15 | % |
| Others                                                        |   |     | 388       |     |     | 22       | %                   |   | 384 |   |   | 23 | % |   | 416 |   |   | 24 | % |
| Sub-Total                  Light                              |   |     | 624       |     |     | 35       | %                   |   | 657 |   |   | 40 | % |   | 672 |   |   | 38 | % |
| **Medium                  / Heavy Crude Oil**                 |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| United                  States and Canada                     |   |     | 788       |     |     | 44       | %                   |   | 651 |   |   | 40 | % |   | 797 |   |   | 45 | % |
| Others                                                        |   |     | 362       |     |     | 20       | %                   |   | 340 |   |   | 21 | % |   | 295 |   |   | 17 | % |
| Sub-Total                  Medium / Heavy Crude Oil           |   |     | 1,150     |     |     | 65       | %                   |   | 991 |   |   | 60 | % |   | 1,092 |   |   | 62 | % |
| **Total                  Crude Oil**                          |   |     | **1,774** |     |     | 100      | %                   |   | **1,648** |   |   | 100 | % |   | **1,764** |   |   | 100 | % |
|                                                          |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Refined                  Petoleum Products**                |   |     |      |     |     |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| United                  States and Canada                     |   |     | 277       |     |     | 42       | %                   |   | 260 |   |   | 52 | % |   | 216 |   |   | 33 | % |
| Others                                                        |   |     | 383       |     |     | 58       | %                   |   | 242 |   |   | 48 | % |   | 431 |   |   | 67 | % |
| **Total                  Refined Petroleum Products**         |   |     | 660       |     |     | 100      | %                   |   | 502 |   |   | 100 | % |   | 647 |   |   | 100 | % |
| **Total                  Exports of Crude and Products**      |   |     | **2,434** |     |     | **n.a.** |                |   | **2,150** |   |   | **n.a.** |   |   | **2,411** |   |   | **n.a.** |   |

| (1) | Includes                  condensate. |
|-----|---------------------------------------|

| (2) | Crude                  oils can also be classified by sulfur content (by weight). “Sour” crudes                  contain 0.5% or greater sulfur content (by weight) and “sweet” crudes                  contain less than 0.5% sulfur content (by weight). Substantially                  all of                  our exports are classified as sour                  crude. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|                                        |   | **2004** |      | **2003** |   | **2002** |                |
|---------------------------------------------|--------|----------|-----------|----------|--------|----------|---------------------|
|                                        |   | **mbpd** |      |     |   | **mbpd** |                |   |   | **mbpd** |   |   |   |
|                                        |   |     |      |     |   |     |                |   |   |   |   |   |   |
| Crude                  oil                  |   |     | 1,159     |     |   | 30       | %    |   | 1,413 |   |   | 37 | %    |   | 1,782 |   |   | 41 | % |
| Refined                  petroleum products |   |     | 2,648     |     |   | 70       | %                   |   | 2,371 |   |   | 63 | % |   | 2,583 |   |   | 59 | % |
| **Total**                                   |   |     | **3,807** |     |   | **100**  | **%**               |   | **3,784** |   |   | **100** | **%** |   | **4,365** |   |   | **100** | **%** |
|                                        |   |     |      |     |   |     |                |   |   |   |   |   |   |   |   |   |   |   |   |
| **Average                  price**          |   |     | **42.11** |     |   |     |                |   | **32.08** |   |   |   |   |   | **26.56** |   |   |   |   |

**Marketing        in the United States**

***Sales        of Crude Oil to Affiliates.***

***Sales        of Crude Oil to Third Parties.***

***Sales        of Refined Products.***

----

*Table            of Contents*

***Crude        Oil and Refined Product Purchases.***

**Marketing        in Europe.**

**Marketing        in Latin America and the Caribbean.**

----

*Table            of Contents*

**Marketing        in Venezuela.**

|                                           |   | **2004**     |    | **2003**     |   | **2002**     |   |
|------------------------------------------------|--------|--------------|---------|--------------|--------|--------------|--------|
|                                           |   |    |    |    |   |    |   |
| **Refined                  Products:**         |   |    |    |    |   |    |   |
| Liquefied                  petroleum gas       |   |         | 69      |         |   | 58           |   |   | 59 |   |
| Motor                  gasoline                |   |         | 232     |         |   | 209          |   |   | 207 |   |
| Diesel                                         |   |         | 115     |         |   | 98           |   |   | 91 |   |
| Other                                          |   |         | 69      |         |   | 67           |   |   | 63 |   |
| **Total                  refined products**    |   |         | **485** |         |   | **432**      |   |   | **420** |   |
|                                           |   |         |    |         |   |         |   |   |   |   |
| Natural                  gas (MMCF)            |   |         | 2,055   |         |   | 1,751        |   |   | 1,879 |   |
| **Natural                  gas in boe**        |   |         | 354     |         |   | 302          |   |   | 324 |   |
| **Total                  hydrocarbons in boe** |   |         | **839** |         |   | **734**      |   |   | **744** |   |
|                                           |   |         |    |         |   |         |   |   |   |   |
| **Unit                  Sale Prices:**         |   |         |    |         |   |         |   |   |   |   |
| Refined                  products ($/barrel)   |   |         | 7.44    |         |   | 6.61         |   |   | 6.73 |   |
| Natural                  gas ($/mcf)           |   |         | 0.74    |         |   | 0.61         |   |   | 0.71 |   |
| Natural                  gas ($/boe)           |   |         | 4.29    |         |   | 3.20         |   |   | 4.34 |   |

**Gas**

----

*Table            of Contents*

**Petrochemicals**

|                                                           |   | **2004**     |   | **2003**     |   | **2002**     |   |
|----------------------------------------------------------------|--------|--------------|--------|--------------|--------|--------------|--------|
|                                                           |   |    |   |    |   |    |   |
| Sales                  volume (thousands of metric tons)       |   |         | 3,515  |         |   | 2,734        |   |   | 4,127 |   |
| Consolidated                  revenues (1)                     |   |         | 1,421  |         |   | 784          |   |   | 919 |   |
| Net                  property, plant and equipment at year end |   |         | 1,772  |         |   | 1,808        |   |   | 1,925 |   |
| Capital                  expenditures                          |   |         | 87     |         |   | 48           |   |   | 53 |   |

| (1) | Includes                  $571 million, $492 million and $268 million of sales to affiliates                  for                  2004, 2003 and 2002, respectively; and sales to PDVSA’s subsidiaries,                  which are eliminated in our consolidated financial                  statements. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Extra-Heavy        Crude**

----

*Table            of Contents*

| **Geographic                  location** |   | **%                  of sales** |
|------------------------------------------|--------|---------------------------------|
| Canada                                   |   | 28                              |
| Korea                                    |   | 22                              |
| Japan                                    |   | 16                              |
| Guatemala                                |   | 12                              |
| China                                    |   | 10                              |
| Italy                                    |   | 8                               |
| Others                                   |   | 4                               |

|                                                     |   | **2004**     |   | **2003**     |   | **2002**     |   |
|----------------------------------------------------------|--------|--------------|--------|--------------|--------|--------------|--------|
|                                                     |   |    |   |    |   |    |   |
| Raw                  material production (m metric tons) |   |         | 3,329  |         |   | 3,426        |   |   | 4,041 |   |
| Production                  (m metric tons)              |   |         | 3,184  |         |   | 5,175        |   |   | 5,451 |   |
| Orimulsion                  sales volume (m metric tons) |   |         | 3,082  |         |   | 5,201        |   |   | 5,575 |   |
| Consolidated                  revenues                   |   |         | 213    |         |   | 186          |   |   | 186 |   |
| Net                  property, plant and equipment       |   |         | 444    |         |   | 537          |   |   | 544 |   |
| Capital                  expenditure                     |   |         | 54     |         |   | 18           |   |   | 9 |   |

**Overview        of Main Projects 100% Owned by PDVSA**

**Complejo        Industrial Gran Mariscal de Ayacucho (CIGMA) Project**
***.***

**The        Anaco Gas Project.**

----

*Table            of Contents*

**The        ICO Project.**

|   | · | facilitate                  the supply of gas to the western region of                  Venezuela; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | expand                  the delivery of gas to other regions and cities within the country;                  and |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | promote                  industrial and commercial development in the areas along the gas                  transmission pipeline to be built in connection with this                  project. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**The        Jose 250 Project.**

**The        Complejo Cryogenic de Occidente Project.**

**The        Integral Ceuta-Tomoporo Project.**

----

*Table            of Contents*

**The        Mariscal Sucre for Liquefied Natural Gas Project. **

**Deep        Conversion Project at Puerto La Cruz Refinery**

**Deep        Conversion Project at El Palito Refinery**

**Deep        Conversion Project at CRP Complex**

**New        Refinery Projects: Cabruta, Batalla de Santa Ines and        Caripito**

**Antonio        Ricaurte Trans-Caribbean Gas Pipeline**

----

*Table            of Contents*

**Transportation        and Infrastructure**

**Pipelines        and Storage.**

**United        States**

**Europe**

**Shipping.**

**Research        and Development**

----

*Table            of Contents*

|   | · | To                  support and improve composition of resources base incorporating                  new                  technologies through exploration, integrated studies and certification                  analysis; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                  maximize recovery factor of reservoirs through technological development                  and acquisition of new knowledge for value                  creation; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                  generate technological solutions in the heavy and extra-heavy oil                  business; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | To                  support the development of offshore                  gas; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | To                  adapt fuels to new quality and environmental                  regulations; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | To                  support the optimization of operations in the refining                  process; |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | To                  promote operations that support PDVSA’s image as an                  environmentally-friendly company;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                  promote and support economical activities in the operating areas                  based on                  technology as a tool for national                  development. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Environmental        and Safety Matters**

**Environmental.**

----

*Table            of Contents*

----

*Table            of Contents*

**Safety.**

| **4.c** | **Organizational                  structure** |
|---------|-----------------------------------------------|

**PDVSA        Petróleo:**

**Carbozulia:**

**Palmaven:**

**BITOR:**

**Cied:**

**PDVSA        Trading:**

**PDVSA        Gas:**

----

*Table            of Contents*

**CVP:**

**Interven:**

**Pequiven:**

**DELTAVEN:**

**PDV        Caribe:**

**PDV        UK, S.A.:**

**International        subsidiaries:**

----

*Table            of Contents*

| **Companies**                                                        |   | **%                  Owner-****ship** |   | **Principal                  Activities**               |   | **Country                  of Incorporation** |
|----------------------------------------------------------------------|--------|---------------------------------------|--------|---------------------------------------------------------|--------|-----------------------------------------------|
|                                                                 |   |                                  |   |                                                    |   |                                          |
| AB                  Nynäs Petroleum                             |   | 50                                    |   | Refining                  and marketing                 |   | Sweden                                        |
| Bonaire                  Petroleum Corporation N. V.                 |   | 100                                   |   | Storage                                                 |   | Netherlands                  Antilles         |
| Chalmette                  Refining, L.L.C.                          |   | 50                                    |   | Refining                                                |   | United                  States                |
| CITGO                  Petroleum Corporation                         |   | 100                                   |   | Refining,                  marketing and transportation |   | United                  States                |
| Corpoguanipa,                  S.A.                                  |   | 100                                   |   | Production,                  upgrading and marketing    |   | Venezuela                                     |
| Corporación                  Venezolana del Petróleo, S.A. |   | 100                                   |   | Exploration                  and production             |   | Venezuela                                     |
| Deltaven,                  S.A.                                      |   | 100                                   |   | Marketing                  (in Venezuela)               |   | Venezuela                                     |
| Hovensa,                  L.L.C.                                     |   | 50                                    |   | Refining                                                |   | U.S.                  Virgin Islands          |
| Intevep,                  S.A.                                       |   | 100                                   |   | Research                  and development               |   | Venezuela                                     |
| Lyondell-Citgo                  Refining L.P.                        |   | 41                                    |   | Refining                                                |   | United                  States                |
| PDV                  America, Inc.                              |   | 100                                   |   | Refining,                  marketing and transportation |   | United                  States                |
| PDV                  Europa B.V.                                     |   | 100                                   |   | Refining                  and marketing                 |   | Netherlands                                   |
| PDV                  Holding, Inc.                              |   | 100                                   |   | Refining,                  marketing and transportation |   | United                  States                |
| PDV                  Insurance Company Ltd.                          |   | 100                                   |   | Insurance                                               |   | Bermuda                                       |
| PDV                  Marina, S.A.                                    |   | 100                                   |   | Shipping                                                |   | Venezuela                                     |
| PDV                  Midwest Refining, L.L.C.                        |   | 100                                   |   | Refining                  and marketing                 |   | United                  States                |
| PDVSA                  Cerro Negro, S.A.                             |   | 100                                   |   | Production,                  upgrading and marketing    |   | Venezuela                                     |
| PDVSA                  Finance Ltd.                                  |   | 100                                   |   | Financing                                               |   | Cayman                  Islands               |
| PDVSA                  Gas, S.A.                                     |   | 100                                   |   | Gas                  production, processing and distr.  |   | Venezuela                                     |
| PDVSA                  Petróleo, S.A.                           |   | 100                                   |   | Integrated                  oil operations              |   | Venezuela                                     |
| PDVSA                  Sincor, S.A.                                  |   | 100                                   |   | Production,                  upgrading and marketing    |   | Venezuela                                     |
| Petroquímica                  de Venezuela, S.A.                |   | 100                                   |   | Chemicals                  and petrochemicals           |   | Venezuela                                     |
| Petrolera                  Zuata, C.A.                               |   | 49.9                                  |   | Production,                  upgrading and marketing    |   | Venezuela                                     |
| Refineria                  Isla (Curazao), S.A.                      |   | 100                                   |   | Refining                  and Storage                   |   | Venezuela                                     |
| Ruhr                  Oel GmbH                                       |   | 50                                    |   | Refining                  and marketing                 |   | Germany                                       |
| The                  Bahamas Oil Refining Co. Int. Ltd               |   | 100                                   |   | Storage                                                 |   | The                  Bahamas                  |

| **4.d** | **Property,                  plants and equipment** |
|---------|-----------------------------------------------------|

**Item        5. Operating and Financial Review and        Prospects**

**Effects,        Losses and Damages resulting from the Work Stoppage and Other Events in the        Petroleum Sector**

----

*Table            of Contents*

|                                             |   | **2004** |         | **2003                  (1)** |   | **2002(1)**  |   | **2001(2)** |         |
|--------------------------------------------------|--------|----------|--------------|-------------------------------|--------|--------------|--------|-------------|--------------|
| **Monthly                  exports (Mbls)**      |   |     |         |                          |   |         |   |        |         |
| January                                          |   |     | 72,224       |                          |   | 15,535       |   |        | 81,841       |   |   | 93,580 |   |
| February                                         |   |     | 75,049       |                          |   | 30,380       |   |        | 73,424       |   |   | 82,980 |   |
| March                                            |   |     | 73,671       |                          |   | 62,055       |   |        | 74,527       |   |   | 92,567 |   |
| April                                            |   |     | 72,049       |                          |   | 66,734       |   |        | 59,595       |   |   | 82,843 |   |
| May                                              |   |     | 74,450       |                          |   | 51,481       |   |        | 66,501       |   |   | 86,470 |   |
| June                                             |   |     | 71,031       |                          |   | 108,028      |   |        | 74,467       |   |   | 82,833 |   |
| July                                             |   |     | 77,317       |                          |   | 65,973       |   |        | 85,352       |   |   | 90,853 |   |
| August                                           |   |     | 73,438       |                          |   | 70,344       |   |        | 89,638       |   |   | 86,880 |   |
| September                                        |   |     | 72,097       |                          |   | 62,610       |   |        | 82,691       |   |   | 79,035 |   |
| October                                          |   |     | 69,451       |                          |   | 82,475       |   |        | 87,754       |   |   | 83,981 |   |
| November                                         |   |     | 72,958       |                          |   | 68,326       |   |        | 74,823       |   |   | 81,191 |   |
| December                                         |   |     | 77,222       |                          |   | 76,777       |   |        | 19,860       |   |   | 83,058 |   |
| **Total**                                        |   |     | **880,957**  |                          |   | **760,718**  |   |        | **870,473**  |   |   | **1,026,271** |   |
|                                             |   |     |    |                          |   |    |   |        |    |   |   |    |   |
| **Average                  export price ($/Bl)** |   |     | **32.96**    |                          |   | **24.78**    |   |        | **21.84**    |   |   | **20.14** |   |

| (1) | The                  work stoppage commenced in December 2002 and continued into                  2003. |
|-----|---------------------------------------------------------------------------------------------------------|

| (2) | The                  management of PDVSA has determined that 2001 is the base year since                  it was                  not affected by the work stoppage. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Exploration,        Production and Upgrading.**

**Refining,        Supply and Marketing.**

**Other        Effects on the Operations of PDVSA and its Venezuelan        Subsidiaries.**

**Overview        and Trends**

----

*Table            of Contents*

**Impact        of Inflation and Devaluation**

|                                                                                                                                                                                     |   | **2005** |     | **2004** |   | **2003** |   | **2002** |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|----------|----------|
| Exchange                  rates at year-end derived from exchange agreement with the BCV                  (Bs./$1)(see                  note 2 to our consolidated financial statements) |   |     | 2,150.00 |     |   | 1,920.00 |   |     | 1,600.00 |   |   | 1,403.00 |   |
| Average                  annual exchange rates (Bs./$1)                                                                                                                                  |   |     | 2,110.00 |     |   | 1,885.93 |   |     | 1,611.32 |   |   | 1,163.91 |   |
| Interannual                  increments in the exchange rate (%)                                                                                                                         |   |     | 12.00    |     |   | 20.00    |   |     | 14.04    |   |   | 82.18 |   |
| Interannual                  increments in the CPI* (%)                                                                                                                                  |   |     | 14.36    |     |   | 19.18    |   |     | 27.10    |   |   | 31.22 |   |

**Impact        of Taxes on Net Income and Cash Flows**

----

*Table            of Contents*

**Royalty        and Production tax**

**Surface        tax**

**General        consumption tax**

**Extraction        tax:**

**Export        registration tax:**

***Income        Tax***

----

*Table            of Contents*

**Value        Added Tax (VAT**
***)***

|                                        |   | **2004** |   | **2003** |   | **2002** |   |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Income                  taxes               |   |     | 4,753  |     |   | 1,602    |   |   | 149 |   |
| Production                  and other taxes |   |     | 9,247  |     |   | 6,428    |   |   | 5,748 |   |
|                                        |   |     | 14,000 |     |   | 8,030    |   |   | 5,897 |   |

***Basis        of Presentation***

----

*Table            of Contents*

| **5.a** | **Operating                  Results** |
|---------|----------------------------------------|

**Executive        Summary**

|   | · | The                  number of active rigs, production levels by field, recovery                  factors; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | The                  incorporation of crude oil and gas reserves, reservoirs energy                  levels;                  and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Quantity                  and quality of key professionals such as petroleum engineers and                  geologists. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Utilization                  rates of the refinery and petrochemical                  equipment; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | The                  yield of products from crude oil input;                  and |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | The                  cost of other key components such as natural gas and                  electricity. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Benchmarking; |
|--------|--------|---------------|

|   | · | Refining                  margin; |
|--------|--------|-----------------------------------|

|   | · | Return                  on capital employed and economic value                  added; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | Free                  cash flow; |
|--------|--------|----------------------------------|

|   | · | Operational                  costs per barrel of oil produced;                  and |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Gross                  margins, etc. |
|--------|--------|--------------------------------------|

----

*Table            of Contents*

----

*Table            of Contents*

**Results        of Operations 2004 compared to 2003**

**Production**

**Total        Revenues**

***Net        Sales***

----

*Table            of Contents*

***Export        Revenues of Crude Oil and Refined Products***

|                                           |   | **2004** |   | **2003** |   | **Increase** |   |
|------------------------------------------------|--------|----------|--------|----------|--------|--------------|--------|
| United                  States and Canada      |   |     | 1,301  |     |   | 1,183        |   |   | 10 | % |
| Caribbean                  and Central America |   |     | 777    |     |   | 675          |   |   | 15 | % |
| South                  America & Others    |   |     | 356    |     |   | 292          |   |   | 22 | % |

***Sales        Revenues of International Subsidiaries***

***Domestic        Sales***

***Petrochemical        and Other Sales***

***Equity        in Earnings of Non-consolidated Investees***

----

*Table            of Contents*

**Costs        and Expenses**

***Purchase        of Crude Oil and Products***

***Operating        Expenses***

***Exploration        Expenses***

***Asset        Impairment***

***Financing        Expenses***

***Social        Programs Expenses***

**Results        of Operations 2003 compared to 2002**

**Production**

----

*Table            of Contents*

**Total        Revenues**

***Net        Sales***

***Export        Revenues of Crude Oil and Refined Products***

|                                           |   | **2003**                                               |   | **2002** |   | **Increase**** (Decrease)** |   |
|------------------------------------------------|--------|--------------------------------------------------------|--------|----------|--------|----------------------------------|--------|
|                                           |   | (mbpd,                  except as otherwise indicated) |   |
|                                           |   |                                                   |   |     |   |
| United                  States and Canada      |   |                                                   | 1,183  |     |   | 1,269                            |   |   | (7 | )% |
| Caribbean                  and Central America |   |                                                   | 675    |     |   | 739                              |   |   | (9 | )% |
| South                  America & Others    |   |                                                   | 292    |     |   | 403                              |   |   | (38 | )% |

***Sales        Revenues of International Subsidiaries***

----

*Table            of Contents*

***Domestic        Sales***

***Petrochemical        and Other Sales***

***Equity        in Earnings of Non-consolidated Investees***

**Costs        and expenses**

***Purchase        of Crude Oil and Products***

***Operating        Expenses***

***Exploration        Expenses***

----

*Table            of Contents*

***Depreciation        and Depletion***

***Asset        Impairment***

***Selling,        Administrative and General Expenses***

***Financing        Expenses***

| **5.b** | **Liquidity                  and Capital Resources** |
|---------|------------------------------------------------------|

**Liquidity**

**Cash        Flows from Operating Activities**

**Cash        Flows from Investing Activities**

----

*Table            of Contents*

|                                        |   | **2004** |   | **2003** |   | **2002** |   |
|---------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| In                  Venezuela:              |   |     |   |     |   |     |   |
| Exploration                  and Production |   |     | 1,912  |     |   | 1,276    |   |   | 1,556 |   |
| Refining                                    |   |     | 345    |     |   | 237      |   |   | 365 |   |
| Petrochemicals                  and others  |   |     | 457    |     |   | 99       |   |   | 83 |   |
|                                        |   |     | 2,714  |     |   | 1,612    |   |   | 2,004 |   |
| Foreign-Refining                            |   |     | 246    |     |   | 357      |   |   | 739 |   |
|                                        |   |     | 2,960  |     |   | 1,969    |   |   | 2,743 |   |

**Restricted        Cash**

**FEM        (formerly the FIEM)**

**Funds        for Extra-heavy Crude Oil Projects in the Orinoco Belt**

**Trusts        in BANDES**

|   | · | ***Trust                  for Programs and Projects of Housing and Infrastructure                  Development***.                  On August 21, 2003, the subsidiary CVP and BANDES signed a contract                  of                  trusteeship, the objective of which is the administration and investment                  of the trust fund in operations, adjusted to the principles of                  liquidity,                  security and profitability. This trust fund will attend to the                  commitments                  acquired by CVP for the implementation of programs and projects                  for                  housing and infrastructure development, established through the                  agreements                  that were signed with designated public organizations, and will                  be                  recognized as expenditures as the projects are implemented. The                  trust                  fund, approved by the Board of Directors on August 25, 2003, consisted                  of                  contributions of 480 billion bolivars, equivalent to $300 million,                  and                  will have duration of one year, automatically renewable for equal                  periods.                  During 2004, the Company has made contributions of 960 billion                  bolivars,                  equivalent to $500 million, and has made payments of $116 million                  which                  correspond to reimbursable payments that are registered in long-term                  accounts receivable, as agreed in the signed contracts of cooperation                  for                  the transfer and reimbursement of resources between the implementing                  entities and PDVSA. As of December 31, 2004 and 2003, this fund                  has                  generated interest of $24 million and $2 million respectively and                  has                  generated expenses for trust fund commissions and other expenses                  in 2004                  of $127 million. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | · | ***Trust                  for the Programs and Projects related to Ezequiel Zamora Fund for                  Agricultural Investment***.                  On March 10, 2004, the subsidiary CVP and BANDES signed a trust                  fund                  contract, the objective of which is the administration and investment                  of                  the trust fund in operations, adjusted to the principles of liquidity,                  security and profitability. This trust fund will attend to the                  commitments                  acquired by CVP for the implementation of programs and projects                  for                  agricultural development, established through the agreements that                  were                  signed with the designated public organizations, and will be recognized                  as                  expenditures as the projects are implemented. This trust fund,                  approved by                  the Board of Directors on January 15, 2004, was constituted in                  dollars,                  with $600 million, payable in bolivars, through partial contributions.                  During 2004, the Company has made payments of $429 million which                  correspond to reimbursable payments which are registered in long-term                  accounts receivable, as agreed in the signed contracts of cooperation                  for                  the transfer and reimbursement of resources between the implementing                  entities and PDVSA. As of December 31, 2004, this has generated                  $5 million                  in net financial revenues and has generated expenses for trust                  fund                  commissions and other expenses of $275                  million. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | ***Trust                  for Programs and Projects of the Works, Goods and Services destined                  for                  the Development of Infrastructure, Agricultural Activity, Highways,                  Health                  and Education (FONDESPA)***.                  In May 2004, the subsidiary CVP and BANDES signed a fiduciary contract,                  the objective of which is the administration and investment of                  the trust                  fund in operations, adjusted to the principles of liquidity, security                  and                  profitability. This trust fund will attend to the commitments acquired                  by                  CVP related to the implementation of programs and projects for                  the                  development of education, health, agriculture, industry and highways,                  among others. The trust fund is named Fondo para el Desarrollo                  Económico y                  Social del País (FONDESPA), comprising extraordinary income, net of                  royalties and taxes provided by the export of crudes and refined                  products                  exceeding the average price of $23 per barrel. This fund is comprised                  of                  an initial contribution of $1,000 million, and a contribution in                  bolivars                  equivalent to $1,000 million. As of December 31, 2004, payments                  for $464                  million were made of which $240 million correspond to reimbursable                  payments which are registered in long-term accounts receivable,                  $23                  million that has been assumed as costs by the subsidiary and as                  agreed in                  the contracts of cooperation for the transfer and reimbursement                  of                  resources between the implementing entities and PDVSA. As of December                  31,                  2004, this has generated $13 million in net financial revenues                  and has                  generated expenses for Fiduciary commissions and other expenses                  of $242                  million. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 12, 2005, the Board of Directors of CVP approved the establishment                  of a trust among CVP, BANDES and Fondo de Desarrollo Agropecuario,                  Pesquero, Forestal y Afines (FONDAFA), to execute projects and                  programs of                  the Bolivarian missions and other social projects established through                  agreements with designated public organizations. This trust fund                  was                  established with an initial contribution of $30 million, with a                  duration                  of one year, renewable automatically for similar periods. During                  2005,                  PDVSA transferred $72 million to this                  trust. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 26, 2005, the Board of Directors of CVP approved the establishment                  of a trust among CVP, BANDES y FONDAFA to finance the cooperatives                  of the                  Vuelvan Caras Mission, established through agreements with designated                  public organizations. This trust was established with contributions                  of $88                  million, with a duration of one year, renewable automatically for                  similar                  periods. During 2005, PDVSA transferred $88 million to this                  trust. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | · | On                  June 21, 2005, the Board of Directors of CVP approved the creation                  of a                  trust between CVP and BANDES in order to finance sustainable development                  projects to be executed in the east and west of the Country through                  agreements to be signed with the designated public entities. This                  trust                  was incorporated with an initial contribution of $611 thousand                  and will                  have a duration of one year, extendable automatically for equal                  periods.                  During 2005, PDVSA transferred $5 million to this                  trust. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  July 26, 2005, the Board of Directors of CVP approved the establishment                  of                  a trust between CVP and BANDES to execute programs and projects                  for the                  Sowing and Production Plan 2005, through agreements with designated                  public                  organizations. This trust was established with an initial contribution                  of                  $70 million with a duration of one year, renewable automatically                  for                  similar periods. During 2005, PDVSA transferred $326 million to                  this                  trust. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  October 8, 2005, CVP’s Board of Directors approved the incorporation of a                  trust between CVP and the Banco del Tesoro, Banco Universal in                  order to                  finance the operations of the Empresas de Producción Social (EPS) (social                  production companies), by means of loans recoverable under special                  conditions to finance infrastructure projects, acquisition of capital                  goods, access to technology, obtaining qualified resources and                  training                  until achieving economic autonomy and improving their operating                  efficiency. This will allow them to fulfill their obligations with                  the                  trust in order to guarantee the financing of other EPS’s. This trust was                  incorporated with an initial contribution of $100 million and will                  have a                  one-year duration, extendable automatically for equal periods.                  During                  2005, PDVSA transferred $100 million to this                  trust. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  January 13, 2006, the agreement for the incorporation of a trust                  between                  CVP and Banfoandes, Banco Universal, C.A., was approved by the                  Board of                  Directors of CVP on January 10, 2006, for the creation of the                  Investigation Fund, Development and Innovation, as an economic                  support                  mechanism, not reimbursable, addressed to entrepreneurs, inventors,                  associations, micro, small and middle sized companies and the networks                  of                  productive innovation, which will carry out the development phases                  of                  prototypes and short research and development (R&D) projects. This                  trust was incorporated with an initial contribution of $50 million                  and                  with a one-year duration, extendable automatically for equal periods. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  March 7, 2006, an agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP for the implenmentation                  of                  “Ciencia Misión”. This trust was incorporated with an initial contribution                  of $438 million, dated August 25, 2006, and it was decided to reduce                  the                  trust amount to $230 million and, the remaining amount was reserved                  for                  other social programs upon authorization of the National Government.                  This                  trust will have one-year duration, extendable automatically for                  equal                  periods. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  March 13, 2006, the agreement for the incrporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on March 7, 2006, for                  execution                  of the Plan Vialidad 2006. This trust will be incorporated with                  an initial                  contribution of $47 million, with a one-year duration, extendable                  automatically for equal periods. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 7, 2006, for the incorporation of a trust was subscribed                  between CVP                  and Banco del Tesoro, C.A., Banco Universal, and approved by the                  Board of                  Directors of CVP on October 8, 2005, for the creation of a Social                  Fund for                  health, education, housing and contributions to the communities                  in a state                  of extreme social exclusion, and other social plans and projects                  presented                  in the social offers by PDVSA’s contractors. This trust will be                  incorporated with an initial contribution of $465 million with                  a one-year                  duration, extendable automatically for equal periods. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 7, 2006, the agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on March 13, 2006, for                  the                  creation of the Fondo Social Fronterizo, in order to make the necessary                  payments to finance social projects for education, health, water                  supply,                  among others, to be carried out in frontier areas. This trust will                  be                  incorporated with an initial contribution of $595 thousand with                  a one-year                  duration, extendable automatically for equal periods. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

|   | · | On                  April 28, 2006, the agreement for the incorporation of a trust                  was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on April 18, 2006, for                  the                  execution of works in the electrical sector nationwide to support                  the                  Barrio Adentro II Misión. This trust will be incorporated with an initial                  contribution of $9 million with a one-year duration, extendable                  automatically for equal periods. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  May 24, 2006, the agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on May 23, 2006, for                  the                  creation of the Fondo de Garantías Nacionales, to guarantee individual                  credits, mining technology and telecommunication sectors, among                  others.                  This trust wil be created with an initial contribution of $50 million                  with                  a one-year duration, extendable automatically for equal periods. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                  2006, PDVSA transferred funds for social programs for approximately                  $298                  million to Programs and Projects for Housing and Infrastructure                  Development, $349 million to Programs and Projects related to the                  Ezequiel                  Zamora Fund for Agricultural Investment, $229 million to FONDESPA                  and                  $6,136 million to FONDEN (see note 2, 4 and 23-g). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                  2005, PDVSA transferred $689 million to “Programs and Projects for Housing                  and Infrastructure Development” and $2,000 million to FONDESPA (see note 4                  to our consolidated financial statements, included in “Item 18. Financial                  Statements”). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Cash        Flows from Financing Activities**

----

*Table            of Contents*

***Secured        Revolving Credit Facility***

***Senior        Secured Term Loan***

***Shelf        Registration - Senior Notes***

|   | · | all                  of its outstanding 11.375% senior notes due                  2011; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | all                  of its outstanding 9.30% private placement senior notes due 2006;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | all                  of its outstanding master shelf agreement senior notes due 2006                  through                  2009 with interest rates ranging from 7.17% to                  8.94%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.875%                  Senior notes due 2006                             |   |   | 136 |   |
|---------------------------------------------------------------------------|--------|--------|-----|--------|
| 6%                  Senior notes due 2011                                 |   |   | 250 |   |
| 11.375%                  Senior notes due 2011                            |   |   | 7   |   |
| 9.30%                  Privide placement Senior notes due 2006            |   |   | 23  |   |
| 7.17%                  to 8.95% Senior notes under master shelf agreement |   |   | 165 |   |
|                                                                      |   |   | 581 |   |

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*Table            of Contents*

*** ***

| **Notes**                                   |   | **CUSIP/ISIN                  No** |                                                                                                         | **Outstanding                  principal amount before tender offer** |    | **Principal                  amount validly tendered** |   | **Outstanding                  principal amount after tender offer** |        |
|---------------------------------------------|--------|------------------------------------|--------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|---------|--------------------------------------------------------|--------|----------------------------------------------------------------------|-------------|
| 6.250%                  Euro Notes due 2006 |   |                               | Xs0096444749                                                                                                 |                                                                  | € |  88,400,000                                       |   | €                                                              | 87,449,258  |   | € | 950,742 |   |
| 6.650%                  Notes due 2006      |   |                               | 693300AE5                  / US693300AE52                                                                    |                                                                  | $       | 300,000,000                                            |   | $                                                                    | 291,693,000 |   | $ | 8,307,000 |   |
| 9.375%                  Notes due 2007      |   |                               | 693300AP0/                  US693300AP00 G6954PAJ9/ USG6954PAJ96                                             |                                                                  | $       | 250,000,000                                            |   | $                                                                    | 243,980,000 |   | $ | 6,020,000 |   |
| 6.800%                  Notes Due 2008      |   |                               | 693300AF2                  / US693300AF28 693300AC9 / US693300AC96 G6954PAC4 /                  USG6954PAC44 |                                                                  | $       | 300,000,000                                            |   | $                                                                    | 293,859,000 |   | $ | 6,141,000 |   |
| 9.750%                  Notes Due 2010      |   |                               | 693300AR6                  / US693300AR65 G6954PAK6 / USG6954PAK69                                           |                                                                  | $       | 250,000,000                                            |   | $                                                                    | 225,810,000 |   | $ | 24,190,000 |   |
| 8.500%                  Notes Due 2012      |   |                               | 693300AU9                  / US693300AU94                                                                    |                                                                  | $       | 500,000,000                                            |   | $                                                                    | 471,133,000 |   | $ | 28,867,000 |   |
| 7.400%                  Notes Due 2016      |   |                               | 693300AJ4                  / US693300AJ40                                                                    |                                                                  | $       | 400,000,000                                            |   | $                                                                    | 387,335,000 |   | $ | 12,665,000 |   |
| 9.950%                  Notes Due 2020      |   |                               | 693300AT2                  / US693300AT22 693300AS4 / US693300AS49                                           |                                                                  | $       | 100,000,000                                            |   | $                                                                    | 97,050,000  |   | $ | 2,950,000 |   |
| 7.500%                  Notes Due 2028      |   |                               | 693300AK1                  / US693300AK13                                                                    |                                                                  | $       | 400,000,000                                            |   | $                                                                    | 394,790,000 |   | $ | 5,210,000 |   |

----

*Table            of Contents*

**Capital        Resources**

| **5.c** | **Research                  and development, patents and                  licenses** |
|---------|--------------------------------------------------------------------------------------|

| **5.d** | **Trend                  information** |
|---------|----------------------------------------|

|                                  |   | **2005** |   | **2006** |   | **2007** |   | **2008** |   | **2009** |   |
|---------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Venezuela                             |   |     | 3,878  |     |   | 7,566    |   |     | 10,370 |     |   | 11,548 |   |   | 15,303 |   |
| United                  States        |   |     | 515    |     |   | 475      |   |     | 475    |     |   | 475 |   |   | 475 |   |
| Europe                  and Caribbean |   |     | 223    |     |   | 203      |   |     | 203    |     |   | 203 |   |   | 203 |   |
|                                  |   |     | 4,616  |     |   | 8,244    |   |     | 11,048 |     |   | 12,226 |   |   | 15,981 |   |

----

*Table            of Contents*

| **5.e** | **Off-balance                  sheet arrangements** |
|---------|-----------------------------------------------------|

| **5.f** | **Tabular                  disclosure of contractual                  obligations** |
|---------|-------------------------------------------------------------------------------------|

|                                                      |   | **Total** |   | **Less                  than****1                  year** |   | **1-3                  years** |   | **3-5                  years** |   | **More                  than****5                  years** |   |
|-----------------------------------------------------------|--------|-----------|--------|-----------------------------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|------------------------------------------------------------|--------|
| Long-term                  debt                           |   |      | 3,720  |                                                      |   | 1,004                          |   |                           | 817    |                                                       |   | 653 |   |   | 1,246 |   |
| Capital                  lease obligations                |   |      | 73     |                                                      |   | 8                              |   |                           | 16     |                                                       |   | 16 |   |   | 33 |   |
| Operating                  leases                         |   |      | 1,179  |                                                      |   | 241                            |   |                           | 421    |                                                       |   | 337 |   |   | 180 |   |
| Estimated                  crude purchase obligations (1) |   |      | 13,003 |                                                      |   | 2,719                          |   |                           | 4,114  |                                                       |   | 4,114 |   |   | 2,057 |   |
| Estimated                  product purchase obligations   |   |      | 12,164 |                                                      |   | 4,413                          |   |                           | 3,359  |                                                       |   | 4,392 |   |   | (* | ) |
| Other                  commitments                        |   |      | 4,850  |                                                      |   | 785                            |   |                           | 1,132  |                                                       |   | 1,033 |   |   | 1,900 |   |
| Total                  Contractual Cash Obligations       |   |      | 34,989 |                                                      |   | 9,170                          |   |                           | 9,859  |                                                       |   | 10,545 |   |   | 5,416 |   |

| (1) | Obligations                  for Ruhr Oel |
|-----|-------------------------------------------|

| (*) | PDVSA,                  through CITGO, intends to continue purchasing a portion of its                  refined                  product supply from related                  parties. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Company**                               |   | **Delivery                  obligation** |   | **Year                  of termination**                      |
|-------------------------------------------|--------|------------------------------------------|--------|---------------------------------------------------------------|
|                                      |   |                                     |   |                                                          |
| Ruhr                  Oel                 |   | 237                                      |   | 2022                                                          |
| Nynäs                  Petroleum     |   | 57                                       |   | 2005                                                          |
| Lyondell-Citgo                            |   | 230                                      |   | 2011                                                          |
| Chalmette                  Refining       |   | 90                                       |   | Duration                  of the strategic association period |
| ConocoPhillips                            |   | 172                                      |   | 2020                                                          |
| Hovensa                                   |   | 270                                      |   | Between                  2008 and 2022                        |
| Hamaca                  Marketing Company |   | 129                                      |   | Duration                  of the strategic association period |
|                                      |   | 1,185                                    |   |                                                          |

**Critical        Accounting Policies**

----

*Table            of Contents*

**Impairment        of Long-Lived Assets and Long-Lived Assets to be Disposed**

**Environmental        Expenditures**

**Litigation**

**Oil        and Gas Reserves**

**Recently        Issued Accounting Standards**

----

*Table            of Contents*

----

*Table            of Contents*

----

*Table            of Contents*

**Item        6. Directors, Senior Management and        Employees**

| **6.a** | **Directors                  and senior management** |
|---------|------------------------------------------------------|

----

*Table            of Contents*

| **Name**                                          |   | **Age** |   | **Position                  with PDVSA** |   | **Date                  of Appointment** |
|---------------------------------------------------|--------|---------|--------|------------------------------------------|--------|------------------------------------------|
| Rafael                  Ramírez Carreño |   | 43      |   | President                                |   | 2004                                     |
| Luis                  Vierma                      |   | 53      |   | Vice-President                           |   | 2005                                     |
| Alejandro                  Granado                |   | 51      |   | Vice-President                           |   | 2005                                     |
| Eudomario                  Carruyo                |   | 61      |   | Internal                  Director       |   | 2005                                     |
| Asdrúbal                  Chávez        |   | 52      |   | Internal                  Director       |   | 2005                                     |
| Eulogio                  del Pino                 |   | 50      |   | Internal                  Director       |   | 2005                                     |
| Déster                  Rodríguez       |   | 44      |   | Internal                  Director       |   | 2003                                     |
| Jesús                  Villanueva            |   | 58      |   | Internal                  Director       |   | 2005                                     |
| Iván                  Orellana               |   | 54      |   | External                  Director       |   | 2005                                     |
| Carlos                  Martínez Mendoza     |   | 51      |   | External                  Director       |   | 2005                                     |
| Bernard                  Mommer                   |   | 63      |   | External                  Director       |   | 2005                                     |
| Antonio                  Simancas Cardozo         |   | 58      |   | Chief                  Financial Officer |   | 2005                                     |

**Rafael        Ramírez Carreño, Minister of Energy and Petroleum of Venezuela and President of        PDVSA**

**Luis        Vierma, Vice-President of PDVSA**

----

*Table            of Contents*

**Alejandro        Granado, Vice-President of PDVSA**

**Eudomario        Carruyo, Director of PDVSA**

**Asdrúbal        Chávez, Director of PDVSA**

----

*Table            of Contents*

**Eulogio        Del Pino, Director of PDVSA**

**Déster        Rodríguez, Director of PDVSA**

**Jesús        Villanueva, Director of PDVSA**

**Iván        Orellana, Director of PDVSA**

----

*Table            of Contents*

**Carlos        Martínez Mendoza, Director of PDVSA**

**Bernard        Mommer, Director of PDVSA**

**Antonio        Simancas Cardozo, Chief Financial Officer**

----

*Table            of Contents*

| **6.b** | **Compensation** |
|---------|------------------|

| **6.c** | **Board****practices** |
|---------|------------------------|

**Audit        Committee Structure and Objectives**

**Basic        Function**

|   | · | Risk                  analysis for the different                  businesses. |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | Follow                  up of the elements of the internal control system, in the Venezuelan                  and                  International operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  performance of PDVSA’s corporate control                  units. |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Meeting                  of the requirements of laws and regulations, including the requirements                  of                  the Securities and Exchange Commission and the Sarbanes-Oxley Act                  of 2002                  and the norms and procedures of                  PDVSA. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  results of the internal and external                  audits. |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | Quality                  and adequacy of corporate financial                  information. |
|--------|--------|--------------------------------------------------------------------------------------------|

**Authority**

**Organization**

**Main        Functions:**

|  | · | To                  assure the adequacy of the internal control system including the                  control                  environment, structure and activities, and the monitoring and information                  processes. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

|   | · | To                    recommend to PDVSA’s Board of Directors any course of action regarding the                    main issues of the internal control system, including actions                    required to                    improve corporate information                    systems. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                    set guidelines and support the activities of the corporate control                    units                    of PDVSA. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                    review and approve the internal audit policy and norms, including                    the                    relationship between the Corporate Internal Audit Organization                    and the                    audit units within subsidiaries or joint                    ventures. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                    ensure the application of general auditing standards issued by                    the                    Venezuelan government. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                    ensure the independence and objectivity of the internal audit                    function. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | To                    review the external auditors’ opinion of the Company’s financial                    statements, the quality of the internal control system, the main                    risk                    areas and the adequacy of the financial                    reports. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | To                    evaluate on an annual basis the performance of the external                    auditors. |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | To                    review the annual performance of the Committee and to submit                    its activity                    report to the Board of Directors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.d** | **Employees** |
|---------|---------------|

|                                       |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| In                  Venezuela              |   |     | 43,807 |     |   | 33,281   |   |   | 28,841 |   |
| Abroad                                     |   |     | 5,373  |     |   | 5,238    |   |   | 5,157 |   |
| Total                  number of employees |   |     | 49,180 |     |   | 38,519   |   |   | 33,998 |   |
|                                       |   |     |   |     |   |     |   |   |   |   |
| **Contractors                  (*)**       |   |     | 10,498 |     |   | 25,930   |   |   | 38,166 |   |

| **6.e** | **Share                  ownership** |
|---------|--------------------------------------|

----

*Table            of Contents*

**Item        7. Major Shareholders and Related Party        Transactions**

| **7.a** | **Major                  Shareholders** |
|---------|-----------------------------------------|

**Control        of Registrant**

**Ownership        of Reserves**

| **7.b** | **Related                  party transactions** |
|---------|-------------------------------------------------|

**Item        8. Financial Information**

| **8.a** | **Consolidated                  Statements and Other Financial                  Information** |
|---------|-----------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Legal        proceedings**

**LYONDELL-CITGO**

**Employment        actions related to the work stoppage**

**Action        against PDVSA and Bitor**

----

*Table            of Contents*

**Additional        legal actions**

| **8.b** | **Significant                  changes** |
|---------|------------------------------------------|

**Item        9 The Offer and Listing**

| **9.a** | **Offer                  and listing details** |
|---------|------------------------------------------------|

| **9.b** | **Plan                  of Distribution** |
|---------|-------------------------------------------|

| **9.c** | **Markets** |
|---------|-------------|

----

*Table            of Contents*

| **9.d** | **Selling                  Shareholders** |
|---------|-------------------------------------------|

| **9.e** | **Dilution** |
|---------|--------------|

| **9.f** | **Expenses                  of the issue** |
|---------|--------------------------------------------|

**Item        10. Additional Information**

| **10.a** | **Share                  capital** |
|----------|------------------------------------|

| **10.b** | **Memorandum                  and articles of                  association** |
|----------|------------------------------------------------------------------------------|

| **10.c** | **Material                  contracts** |
|----------|-----------------------------------------|

| **10.d** | **Exchange                  controls** |
|----------|----------------------------------------|

|                                         |   |                            |     |
|----------------------------------------------|--------|---------------------------------|----------|
| **Year                  ended December 31,** |   | **Period                  End** |     | **Average                  (1)** |   | **High** |   | **Low** |   |
|                                         |   |                            |     |   |   |   |   |   |   |
| 2000                                         |   |                            | 698.23   |   |   | 679.80 |   |   |   |   |   |   |   |
| 2001                                         |   |                            | 770.09   |   |   | 722.01 |   |   |   |   |   |   |   |
| 2002                                         |   |                            | 1,403.00 |   |   | 1,163.91 |   |   |   |   |   |   |   |
| 2003                                         |   |                            | 1,600.00 |   |   | 1,611.32 |   |   |   |   |   |   |   |
| 2004(2)                                      |   |                            | 1,920.00 |   |   | 1,885.93 |   |   |   |   |   |   |   |
| 2005(3)                                      |   |                            | 2,150.00 |   |   | 2,110.00 |   |   |   |   |   |   |   |
| October,                  2006               |   |                            |     |   |   |   |   |   | 2,150.00 |   |   | 2,144.60 |   |

| (1) | Represents                  the average exchange rate for each full month during the year,                  calculated                  based on the average daily exchange rate established by the BCV                  pursuant                  to the foreign exchange agreement referred to                  above. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The                  exchange rate for the sale and purchase of the bolivar relative                  to the                  dollar was fixed by the Venezuelan government pursuant to a new                  foreign                  exchange regime of Bs.1,920.00 to $1 and Bs.1,915.20 to $1, respectively,                  commencing February 7, 2004. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                  exchange rate for the sale and purchase of the bolivar relative                  to the                  dollar was fixed by the Venezuelan government pursuant to a new                  foreign                  exchange regime at Bs.2,150.00 to $1 and Bs.2,144.60 to $1, respectively,                  commencing March 2, 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

**Foreign        Exchange Budget**

| **10.e** | **Taxation** |
|----------|--------------|

| **10.f** | **Dividends                  and paying agents** |
|----------|--------------------------------------------------|

| **10.g** | **Statement                  by experts** |
|----------|-------------------------------------------|

----

*Table            of Contents*

| **10.h** | **Documents                  on Display** |
|----------|-------------------------------------------|

| **10.i** | **Subsidiary                  Information** |
|----------|---------------------------------------------|

**Item        11. Quantitative and Qualitative Disclosures about Market        Risk**

**Commodity        Derivative Instruments**

| **Non                  Trading Commodity Derivatives 2004** |   |
|-------------------------------------------------------------|--------|
| **Commodity**                                               |   | **Derivative** |   | **Maturity****Date** |   | **Number                  of contracts****Long/Short** |   | **Contract                  Value** |   | **Market                  Value (2)** |   |
|                                                        |   |   |   |   |   |   |   | **Asset/Liability** |   |
|                                                        |   |   |   |   |   |   |   | ($                  in millions) |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |
| No                  Lead Gasoline (1)                       |   |   | Futures                  Purchased |   |   | 2005 |   |   | 600 |   |   | 33.5 |   |   | 31.1 |   |
|                                                        |   |   | Forward                  Purchase Contracts |   |   | 2005 |   |   | 2,600 |   |   | 90.9 |   |   | 89.2 |   |
|                                                        |   |   | Forward                  Sale Contracts |   |   | 2005 |   |   | (1,864 | ) |   | (67.3 | ) |   | (64.6 | ) |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distillates                  (1)                            |   |   | Futures                  Purchased |   |   | 2005 |   |   | 1,885 |   |   | 92.2 |   |   | 96.6 |   |
|                                                        |   |   | Futures                  Purchased |   |   | 2006 |   |   | 30 |   |   | 1.4 |   |   | 1.5 |   |
|                                                        |   |   | Futures                  Sold |   |   | 2005 |   |   | (700 | ) |   | (35.4 | ) |   | (33.7 | ) |
|                                                        |   |   | Forward                  Purchase Contracts |   |   | 2005 |   |   | 967 |   |   | 57.9 |   |   | 54.0 |   |
|                                                        |   |   | Forward                  Sale Contracts |   |   | 2005 |   |   | (2,457 | ) |   | (122.3 | ) |   | (120.4 | ) |
|                                                        |   |   | Forward                  Sale Contracts |   |   | 2006 |   |   | (17 | ) |   | (0.9 | ) |   | (0.8 | ) |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude                  Oil (1)                              |   |   | Forward                  Purchase Contracts |   |   | 2005 |   |   | 446 |   |   | 17.9 |   |   | 17.4 |   |
|                                                        |   |   | Forward                  Sale Contracts |   |   | 2005 |   |   | (446 | ) |   | (18.7 | ) |   | (18.5 | ) |

| (1) | 1,000                  barrels per contract |
|-----|---------------------------------------------|

| (2) | Based                  on actively quoted prices. |
|-----|---------------------------------------------------|

----

*Table            of Contents*

**Debt        Related Instruments**

**Interest        Rate Risk**

| **Variable                  Rate Index** |   | **Expiration                  Date** |                           | **Fixed                  Rate Paid (%)** |   | **Notional                  Principal Amount** |   |
|------------------------------------------|--------|--------------------------------------|--------------------------------|------------------------------------------|--------|------------------------------------------------|--------|
|                                     |   |                                 |                           |                                     |   | ($                  million)                   |   |
| J.J.                  Kenny              |   |                                 | February                  2005 |                                     |   | 5.30                                           |   |   | 12 |   |
| J.J.                  Kenny              |   |                                 | February                  2005 |                                     |   | 5.27                                           |   |   | 15 |   |
| J.J.                  Kenny              |   |                                 | February                  2005 |                                     |   | 5.49                                           |   |   | 15 |   |
|                                     |   |                                 |                           |                                     |   |                                           |   |   | 42 |   |

| **Expected                  Maturities** |   | **Fixed                  Rate Debt** |   | **Average                  Fixed Interest Rate** |   | **Variable                  Rate Debt** |   | **Average                  Variable Interest Rate** |   |
|------------------------------------------|--------|--------------------------------------|--------|--------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------------------|--------|
|                                     |   | ($                  in millions)     |   | %                                                |   | ($                  in millions)        |   | %                                                   |   |
|                                     |   |                                 |   |                                             |   |                                    |   |                                                |   |
| 2005                                     |   |                                 | 560    |                                             |   | 6.03                                    |   |                                                | 444    |   |   | 3.79 |   |
| 2006                                     |   |                                 | 167    |                                             |   | 7.50                                    |   |                                                | 184    |   |   | 3.41 |   |
| 2007                                     |   |                                 | 151    |                                             |   | 7.41                                    |   |                                                | 315    |   |   | 2.96 |   |
| 2008                                     |   |                                 | 116    |                                             |   | 7.21                                    |   |                                                | 320    |   |   | 3.00 |   |
| 2009                                     |   |                                 | 109    |                                             |   | 7.04                                    |   |                                                | 108    |   |   | 3.56 |   |
| Thereafter                               |   |                                 | 404    |                                             |   | 5.69                                    |   |                                                | 842    |   |   | 5.17 |   |
| Total                                    |   |                                 | 1,507  |                                             |   | 6.49                                    |   |                                                | 2,213  |   |   | 4.02 |   |
| Fair                  Value              |   |                                 | 1,536  |                                             |   |                                    |   |                                                |   |   |   |   |   |

----

*Table            of Contents*

| **Expected                  Maturities** |   | **Fixed                  Rate Debt** |   | **Average                  Fixed Interest Rate** |   | **Variable                  Rate Debt** |   | **Average                  Variable Interest Rate** |   |
|------------------------------------------|--------|--------------------------------------|--------|--------------------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------------------|--------|
|                                     |   | ($                  in millions)     |   | %                                                |   | ($                  in millions)        |   | %                                                   |   |
|                                     |   |                                 |   |                                             |   |                                    |   |                                                |   |
| 2004                                     |   |                                 | 376    |                                             |   | 7.65                                    |   |                                                | 373    |   |   | 2.54 |   |
| 2005                                     |   |                                 | 417    |                                             |   | 8.24                                    |   |                                                | 335    |   |   | 2.31 |   |
| 2006                                     |   |                                 | 417    |                                             |   | 8.13                                    |   |                                                | 432    |   |   | 4.48 |   |
| 2007                                     |   |                                 | 296    |                                             |   | 8.23                                    |   |                                                | 340    |   |   | 2.00 |   |
| 2008                                     |   |                                 | 397    |                                             |   | 7.95                                    |   |                                                | 334    |   |   | 1.32 |   |
| Thereafter                               |   |                                 | 2,549  |                                             |   | 8.41                                    |   |                                                | 748    |   |   | 3.68 |   |
| Total                                    |   |                                 | 4,452  |                                             |   | 8.25                                    |   |                                                | 2,562  |   |   | 2.94 |   |
| Fair                  Value              |   |                                 | 4,361  |                                             |   |                                    |   |                                                |   |   |   |   |   |

**Foreign        Exchange Risk**

|                                 |   | **At                  December 31, 2004** |   |
|--------------------------------------|--------|-------------------------------------------|--------|
| **Currency**                         |   | **Assets**                                |   | **Liabilities** |   | **Net** |   |
| ($                  in millions)     |   |
| Venezuelan                  bolivars |   |                                      | 7,094  |   |   | 8,706 |   |   | (1,612 | ) |
| Euros                                |   |                                      | 78     |   |   | 5 |   |   | 73 |   |
| Other                  currencies    |   |                                      | 143    |   |   | 571 |   |   | (428 | ) |

|                                 |   | **At                  December 31, 2003** |   |
|--------------------------------------|--------|-------------------------------------------|--------|
| **Currency**                         |   | **Assets**                                |   | **Liabilities** |   | **Net** |   |
| ($                  in millions)     |   |
| Venezuelan                  bolivars |   |                                      | 6,260  |   |   | 4,459 |   |   | 1,801 |   |
| Euros                                |   |                                      | 52     |   |   | 150 |   |   | (98 | ) |
| Other                  currencies    |   |                                      | 78     |   |   | 320 |   |   | (242 | ) |

| **Currency** |   | **At                  December 31, 2004** |   | **At                  December 31, 2003** |   |
|--------------|--------|-------------------------------------------|--------|-------------------------------------------|--------|
|         |   | ($                  in millions)          |   | ($                  in millions)          |   |
| Bolivars     |   |                                      | 45     |                                      |   | 3 |   |
| Euros        |   |                                      | 1      |                                      |   | 113 |   |
| Yen          |   |                                      | 388    |                                      |   | 280 |   |

**Item        12. Description of Securities Other than Equity        Securities**

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*Table            of Contents*

**PART        II**

**Item        13. Defaults, Dividend Arrearages and        Delinquencies**

**Item        14. Material Modifications to the Rights of Security Holders and        Use of Proceeds**

**Item        15. Controls and Procedures**

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*Table            of Contents*

**Item        16. [Reserved]**

**Item        16A. **
**Audit        Committee Financial Expert**

**Item        16B. **
**Code        of Ethics**

**Item        16C. **
**Principal        Accountant Fees and Services**

----

*Table            of Contents*

|                                                       |   | **2004**     |      | **2003**     |   |
|------------------------------------------------------------|--------|--------------|-----------|--------------|--------|
|                                                       |   |    |      |    |   |
| Audit                  Fees (PDVSA, PDV Europe, Caribbean) |   |         | 4,732     |         |   | 1,510 |   |
| Audit                  Fees (CITGO)                        |   |         | 2,718     |         |   | 1,899 |   |
| Audit-Related                  Fees (1)                    |   |         | 244       |         |   | 450 |   |
| Tax                  Fees                                  |   |         | 132       |         |   | 127 |   |
| All                  Other Fees                            |   |         | 328       |         |   | 0 |   |
| **Total**                                                  |   |         | **8,154** |         |   | **3,986** |   |

| (1) | Audit                  Related Fees in 2004 include approximately $139,000 in fees related                  to                  CITGO’s registration of $250 million 6% unsecured senior notes. Audit                  Related Fees in 2003 include approximately $360,000 in fees related                  to                  CITGO’s registration of $550 million 11 3/8 unsecured senior                  notes. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item        16D. **
**Exemptions        from the Listing Standards for Audit        Committees**

**Item        16E. **
**Purchase        of Equity Securities by the Issuer and Affiliated        Purchasers**

----

*Table            of Contents*

**PART        III**

**Item        17. Financial Statements**

**Item        18. Financial Statements**

|   | Report                    of Independent Registered Public Accounting Firm of Alcaraz Cabrera                    Vázquez (a member firm of KPMG International)     |   | F-1    |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|   |                                                                                                                                                                    |   |   |
|   | Independent                    Auditors’ Report of Deloitte & Touche LLP                                                                                      |   | F-2    |
|   |                                                                                                                                                                    |   |   |
|   | Consolidated                    Balance Sheets at December 31, 2004 and 2003                                                                                            |   | F-3    |
|   |                                                                                                                                                                    |   |   |
|   | Consolidated                    Statements of Income for the years ended December 31, 2004, 2003                    and                    2002                         |   | F-4    |
|   |                                                                                                                                                                    |   |   |
|   | Consolidated                    Statements of Stockholder’s Equity and Comprehensive Loss for the years                    ended December 31, 2004, 2003 and 2002 |   | F-5    |
|   |                                                                                                                                                                    |   |   |
|   | Consolidated                    Statements of Cash Flows for the years ended December 31, 2004,                    2003 and                    2002                     |   | F-6    |
|   |                                                                                                                                                                    |   |   |
|   | Notes                    to Consolidated Financial Statements:                                                                                                          |   |   |
| 1.     | Operations                    and summary of significant accounting policies                                                                                            |   | F-7    |
| 2.     | Foreign                    exchange agreement with the Central Bank of Venezuela                    (BCV)                                                               |   | F-16   |
| 3.     | Transactions                    and balances in currencies other than the dollar                                                                                        |   | F-17   |
| 4.     | Restricted                    cash                                                                                                                                      |   | F-18   |
| 5.     | Notes                    and accounts receivable                                                                                                                        |   | F-21   |
| 6.     | Inventories                                                                                                                                                             |   | F-21   |
| 7.     | Investments                    in non-consolidated investees                                                                                                            |   | F-22   |
| 8.     | Property,                    Plant and Equipment, Net                                                                                                                   |   | F-23   |
| 9.     | Long                    - Term Accounts Receivable and Other Assets                                                                                                     |   | F-26   |
| 10.    | Joint                    Development Activities                                                                                                                         |   | F-27   |
| 11.    | Accounts                    payable to suppliers                                                                                                                        |   | F-33   |
| 12.    | Taxes                                                                                                                                                                   |   | F-33   |
| 13.    | Financial                    and derivative instruments                                                                                                                 |   | F-38   |
| 14.    | Long-term                    debt                                                                                                                                       |   | F-41   |
| 15.    | Capital                    stock and reserves                                                                                                                           |   | F-44   |
| 16.    | Employee                    benefit plans                                                                                                                               |   | F-44   |
| 17.    | Asset                    retirement obligations                                                                                                                         |   | F-53   |
| 18.    | Accrued                    and other liabilities                                                                                                                        |   | F-54   |
| 19.    | Related                    party transactions                                                                                                                           |   | F-54   |
| 20.    | Operating                    segments and geographic data                                                                                                               |   | F-57   |
| 21.    | Commitments                    and contingencies                                                                                                                        |   | F-61   |
| 22.    | Effects                    of the work stoppage on PDVSA                                                                                                                |   | F-64   |
| 23.    | Subsequent                    events                                                                                                                                    |   | F-65   |
| 24.    | Supplementary                    Information on oil and gas exploration and production activities                    (unaudited)                                        |   | F-78   |

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*Table                of Contents*

**Item        19. Exhibits**

| Exhibit                  No:   |   | Description                                                                                                                                                                                                                                                                                                                                |
|--------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  1.1   |   | Memorandum                  and articles of association of PDVSA (incorporated herein by reference                  to                  the Registration Statement on Form F-1 filed by us on June 2,                  1993).                                                                                                              |
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  12.1* |   | Certification                  of the Principal Executive Officer required by Rule 13a-14(a) or                  Rule                  15d-14(a) of the Securities Exchange Act of 1934.                                                                                                                                                   |
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  12.2* |   | Certification                  of the Principal Financial Officer required by Rule 13a-14(a) or                  Rule                  15d-14(a) of the Securities Exchange Act of 1934.                                                                                                                                                   |
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  13.1* |   | Certification                  of the Principal Executive Officer required by Rule 13a-14(b) or                  Rule                  15d-14(b) of the Securities Exchange Act of 1934 and Section 1350                  of                  Chapter 63 of Title 18 of the United States Code (18 U.S.C.                  1350).          |
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  13.2* |   | Certification                  of the Principal Financial Officer required by Rule 13a-14(b) or                  Rule                  15d-14(b) of the Securities Exchange Act of 1934 and Section 1350                  of                  Chapter 63 of Title 18 of the United States Code (18 U.S.C.                  1350).          |
|                           |   |                                                                                                                                                                                                                                                                                                                                       |
| Exhibit                  14.1  |   | Annual                  Report on Form 20-F of PDVSA Finance Ltd. for the year ended December                  31,                  2004 as first filed with the U.S. Securities and Exchange Commission                  (Commission file No. 333-09678) on X, 2006 (incorporated herein                  by                  reference). |

| * | Filed                  Herewith |
|---|---------------------------------|

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*Table            of Contents*

**SIGNATURES**

|                                   | PDVSA,                  S.A. |
|----------------------------------------|------------------------------|
|                                   |                         |   |
|                                   |                         |   |
|                                   | By:                          | /s/                  Rafael Ramírez Carreño |
|                                   |                         | Name:                  Rafael Ramírez Carreño |
|                                   |                         | Title:                  President |
| Date:                November 17, 2006 |

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*Table              of Contents*

**Report        of Independent Registered Public Accounting Firm**

----

*Table              of Contents*

**INDEPENDENT        AUDITORS’ REPORT**

| /s/                  DELOITTE & TOUCHE LLP |   |
|-----------------------------------------------------|--------|

----

*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                        |   | **December                  31** |   |
|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
| **Assets**                                                                                                  |   | **2004**                         |   | **2003** |   |
| Current                  assets:                                                                            |   |                             |   |   |   |
| Cash                  and cash equivalents (note 1-q)                                                       |   |                             | 1,748  |   |   | 2,938 |   |
| Restricted                  cash (note 4)                                                                   |   |                             | 709    |   |   | 659 |   |
| Notes                  and accounts receivable (note 5)                                                     |   |                             | 5,135  |   |   | 4,955 |   |
| Inventories                  (note 6)                                                                       |   |                             | 2,824  |   |   | 2,382 |   |
| Prepaid                  expenses and other assets                                                          |   |                             | 904    |   |   | 777 |   |
| Deferred                  income taxes (note 12)                                                            |   |                             | 719    |   |   | 257 |   |
| Total                  current assets                                                                       |   |                             | 12,039 |   |   | 11,968 |   |
| Restricted                  cash (note 4)                                                                   |   |                             | 3,039  |   |   | 1,000 |   |
| Recoverable                  value added tax (note 12-d)                                                    |   |                             | 3,056  |   |   | 2,150 |   |
| Investments                  in non-consolidated investees (note 7)                                         |   |                             | 3,419  |   |   | 3,072 |   |
| Property,                  plant and equipment, net (note 8)                                                |   |                             | 34,712 |   |   | 34,720 |   |
| Deferred                  income taxes (note 12)                                                            |   |                             | 1,746  |   |   | 1,049 |   |
| Long-term                  accounts receivable and other assets (note 9)                                    |   |                             | 2,294  |   |   | 1,396 |   |
|                                                                                                        |   |                             | 60,305 |   |   | 55,355 |   |
| **Liabilities                  and Stockholder’s Equity**                                             |   |                             |   |   |   |   |   |
| Current                  liabilities:                                                                       |   |                             |   |   |   |   |   |
| Accounts                  payable to suppliers (note 11)                                                    |   |                             | 4,571  |   |   | 3,365 |   |
| Current                  portion of long-term debt (note 14)                                                |   |                             | 1,004  |   |   | 750 |   |
| Income                  taxes payable                                                                       |   |                             | 3,367  |   |   | 624 |   |
| Deferred                  income taxes (note 12)                                                            |   |                             | 370    |   |   | 28 |   |
| Employee                  termination, pension and other postretirement benefits (note                  16) |   |                             | 289    |   |   | 263 |   |
| Accrued                  and other liabilities (note 18)                                                    |   |                             | 2,535  |   |   | 2,293 |   |
| Total                  current liabilities                                                                  |   |                             | 12,136 |   |   | 7,323 |   |
| Long-term                  debt, net of current portion (note 14)                                           |   |                             | 2,716  |   |   | 6,265 |   |
| Employee                  termination, pension and other postretirement benefits (note                  16) |   |                             | 2,083  |   |   | 1,908 |   |
| Deferred                  income taxes (note 12)                                                            |   |                             | 1,359  |   |   | 1,066 |   |
| Accrued                  and other liabilities (note 18)                                                    |   |                             | 1,540  |   |   | 1,282 |   |
| Total                  liabilities                                                                          |   |                             | 19,834 |   |   | 17,844 |   |
| Minority                  interests                                                                         |   |                             | 67     |   |   | 93 |   |
| Stockholder’s                  equity                                                                 |   |                             | 40,404 |   |   | 37,418 |   |
|                                                                                                        |   |                             | 60,305 |   |   | 55,355 |   |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                                             |   | **Years                  ended December 31** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                                                                             |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Sales                  of crude oil and products:                                                                                                                                |   |                                         |   |   |   |   |   |
| Exports                  and international markets                                                                                                                               |   |                                         | 59,951 |   |   | 44,178 |   |   | 39,875 |   |
| In                  Venezuela                                                                                                                                                    |   |                                         | 1,227  |   |   | 961 |   |   | 1,236 |   |
| Petrochemical                  and other sales                                                                                                                                   |   |                                         | 1,517  |   |   | 1,071 |   |   | 1,201 |   |
| Equity                  in earnings of non-consolidated investees (note 7)                                                                                                       |   |                                         | 1,041  |   |   | 379 |   |   | 268 |   |
|                                                                                                                                                                             |   |                                         | 63,736 |   |   | 46,589 |   |   | 42,580 |   |
|                                                                                                                                                                             |   |                                         |   |   |   |   |   |   |   |   |
| Costs                  and expenses:                                                                                                                                             |   |                                         |   |   |   |   |   |   |   |   |
| Purchases                  of crude oil and products                                                                                                                             |   |                                         | 25,448 |   |   | 21,016 |   |   | 17,956 |   |
| Operating                  expenses                                                                                                                                              |   |                                         | 13,685 |   |   | 9,338 |   |   | 9,299 |   |
| Exploration                  expenses                                                                                                                                            |   |                                         | 60     |   |   | 27 |   |   | 133 |   |
| Depreciation                  and depletion (note 8)                                                                                                                             |   |                                         | 2,829  |   |   | 2,824 |   |   | 3,038 |   |
| Asset                  impairment (note 8)                                                                                                                                       |   |                                         | 6      |   |   | 296 |   |   | 722 |   |
| Selling,                  administrative and general expenses                                                                                                                    |   |                                         | 1,289  |   |   | 1,247 |   |   | 1,854 |   |
| Production                  and other taxes (notes 12-b, 12-c, 12-f)                                                                                                             |   |                                         | 9,247  |   |   | 6,428 |   |   | 5,748 |   |
| Financing                  expenses                                                                                                                                              |   |                                         | 456    |   |   | 627 |   |   | 763 |   |
| Other                  (income) expenses, net                                                                                                                                    |   |                                         | 301    |   |   | (25 | ) |   | 323 |   |
|                                                                                                                                                                             |   |                                         | 53,321 |   |   | 41,778 |   |   | 39,836 |   |
| Income                  before social development expenses, income taxes, minority interests                  and                  cumulative effect of accounting change        |   |                                         | 10,415 |   |   | 4,811 |   |   | 2,744 |   |
| Social                  development expenses (note 19)                                                                                                                           |   |                                         | 1,242  |   |   | 249 |   |   | - |   |
| Income                  before income taxes, minority interests and cumulative effect of                  accounting change                                                      |   |                                         | 9,173  |   |   | 4,562 |   |   | 2,744 |   |
| Income                  taxes (note 12)                                                                                                                                          |   |                                         | 4,753  |   |   | 1,602 |   |   | 149 |   |
| Minority                  interests                                                                                                                                              |   |                                         | 11     |   |   | 6 |   |   | 5 |   |
| Income                  before cumulative effect of accounting change                                                                                                            |   |                                         | 4,409  |   |   | 2,954 |   |   | 2,590 |   |
| Cumulative                  effect of accounting change for asset retirement obligations, net                  of                  deferred tax benefit of 175 in 2003 (note 17) |   |                                         | -      |   |   | 234 |   |   | - |   |
| Net                  income                                                                                                                                                      |   |                                         | 4,409  |   |   | 2,720 |   |   | 2,590 |   |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                               |   | **Capital****stock** |   | **Legal****reserves****and                  other** |   | **Accumulated****losses** |   | **Accumulated****other****comprehensive****loss** |    | **Total****stockholder's****equity** |   |
|------------------------------------------------------------------------------------|--------|----------------------|--------|-----------------------------------------------------|--------|---------------------------|--------|---------------------------------------------------|---------|--------------------------------------|--------|
| Balances                  at December 31, 2001                                     |   |                 | 39,094 |                                                |   | 7,982                     |   |                                              | (9,601  | )                                    |   | (377 | ) |   | 37,098 |   |
| Comprehensive                  income:                                             |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   |   |   |
| Net                  income 2002                                                   |   |                 | -      |                                                |   | -                         |   |                                              | 2,590   |                                 |   | - |   |   | 2,590 |   |
| Change                  in additional minimum pension liability, net of tax of 377 |   |                 | -      |                                                |   | -                         |   |                                              | -       |                                 |   | 352 |   |   | 352 |   |
| Total                  comprehensive income                                        |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   | 2,942 |   |
| Transfer                  to reserves                                              |   |                 | -      |                                                |   | 66                        |   |                                              | (66     | )                                    |   | - |   |   | - |   |
| Cash                  dividends                                                    |   |                 | -      |                                                |   | -                         |   |                                              | (2,752  | )                                    |   | - |   |   | (2,752 | ) |
| Balances                  at December 31, 2002                                     |   |                 | 39,094 |                                                |   | 8,048                     |   |                                              | (9,829  | )                                    |   | (25 | ) |   | 37,288 |   |
| Comprehensive                  income:                                             |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   |   |   |
| Net                  income 2003                                                   |   |                 | -      |                                                |   | -                         |   |                                              | 2,720   |                                 |   | - |   |   | 2,720 |   |
| Change                  in additional minimum pension liability, net of nil tax    |   |                 | -      |                                                |   | -                         |   |                                              | -       |                                 |   | 4 |   |   | 4 |   |
| Total                  comprehensive income                                        |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   | 2,724 |   |
| Transfer                  to reserves                                              |   |                 | -      |                                                |   | 328                       |   |                                              | (328    | )                                    |   | - |   |   | - |   |
| Cash                  dividends                                                    |   |                 | -      |                                                |   | -                         |   |                                              | (2,343  | )                                    |   | - |   |   | (2,343 | ) |
| Non-cash                  dividends                                                |   |                 | -      |                                                |   | -                         |   |                                              | (251    | )                                    |   | - |   |   | (251 | ) |
| Balances                  at December 31, 2003                                     |   |                 | 39,094 |                                                |   | 8,376                     |   |                                              | (10,031 | )                                    |   | (21 | ) |   | 37,418 |   |
| Comprehensive                  income:                                             |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   |   |   |
| Net                  income 2004                                                   |   |                 | -      |                                                |   | -                         |   |                                              | 4,409   |                                 |   | - |   |   | 4,409 |   |
| Change                  in additional minimum pension liability, net of nil tax    |   |                 | -      |                                                |   | -                         |   |                                              | -       |                                 |   | (5 | ) |   | (5 | ) |
| Total                  comprehensive income                                        |   |                 |   |                                                |   |                      |   |                                              |    |                                 |   |   |   |   | 4,404 |   |
| Spin-off                  of subsidiary                                            |   |                 | -      |                                                |   | -                         |   |                                              | (116    | )                                    |   | - |   |   | (116 | ) |
| Advances                  of dividends                                             |   |                 | -      |                                                |   | -                         |   |                                              | (1,302  | )                                    |   | - |   |   | (1,302 | ) |
| Transfer                  from reserves                                            |   |                 | -      |                                                |   | (44                       | )      |                                              | 44      |                                 |   | - |   |   | - |   |
| Balances                  at December 31, 2004                                     |   |                 | 39,094 |                                                |   | 8,332                     |   |                                              | (6,996  | )                                    |   | (26 | ) |   | 40,404 |   |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                                 |   | **Years                  ended December 31** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                                                                 |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Cash                  flows from operating activities:                                                                                                               |   |                                         |   |   |   |   |   |
| Net                  income                                                                                                                                          |   |                                         | 4,409  |   |   | 2,720 |   |   | 2,590 |   |
| Adjustment                  to reconcile net income to net cash provided by operating                  activities:                                                   |   |                                         |   |   |   |   |   |   |   |   |
| Depreciation                  and depletion                                                                                                                          |   |                                         | 2,829  |   |   | 2,824 |   |   | 3,038 |   |
| Asset                  impairment                                                                                                                                    |   |                                         | 6      |   |   | 296 |   |   | 722 |   |
| Cost                  of asset retirement obligations                                                                                                                |   |                                         | -      |   |   | 234 |   |   | - |   |
| Deferred                  income taxes                                                                                                                               |   |                                         | (524   | ) |   | (53 | ) |   | (552 | ) |
| Provision                  for (reversal of) employee termination, pension and other postretirement                  benefits                                        |   |                                         | 1,049  |   |   | (407 | ) |   | 1,340 |   |
| Equity                  in earnings of non-consolidated investees                                                                                                    |   |                                         | (1,041 | ) |   | (379 | ) |   | (268 | ) |
| Dividends                  received from non-consolidated investees                                                                                                  |   |                                         | 605    |   |   | 240 |   |   | 228 |   |
| Change                  in operating assets:                                                                                                                         |   |                                         |   |   |   |   |   |   |   |   |
| Notes                  and accounts receivable                                                                                                                       |   |                                         | (620   | ) |   | (1,691 | ) |   | (235 | ) |
| Inventories                                                                                                                                                          |   |                                         | (442   | ) |   | (119 | ) |   | (55 | ) |
| Prepaid                  expenses and other assets                                                                                                                   |   |                                         | (892   | ) |   | 892 |   |   | 374 |   |
| Recoverable                  value added tax                                                                                                                         |   |                                         | (1,264 | ) |   | (217 | ) |   | 217 |   |
| Change                  in operating liabilities:                                                                                                                    |   |                                         |   |   |   |   |   |   |   |   |
| Accounts                  payable to suppliers                                                                                                                       |   |                                         | 1,206  |   |   | 515 |   |   | (193 | ) |
| Income                  taxes payable, accrued and other liabilities and minority                  interests                                                         |   |                                         | 3,656  |   |   | 1,135 |   |   | (1,266 | ) |
| Payments                  of employee termination, pension and other postretirement benefits                                                                         |   |                                         | (494   | ) |   | (244 | ) |   | (1,060 | ) |
| Net                  cash provided by operating activities                                                                                                           |   |                                         | 8,483  |   |   | 5,746 |   |   | 4,880 |   |
| Cash                  flows from investing activities:                                                                                                               |   |                                         |   |   |   |   |   |   |   |   |
| Capital                  expenditures, net                                                                                                                           |   |                                         | (2,960 | ) |   | (1,969 | ) |   | (2,743 | ) |
| (Increase) decrease                  in restricted cash, net of contributions to trust funds of 3,100                  in 2004                  and 300 in 2003 |   |                                         | (2,089 | ) |   | 1,146 |   |   | 1,472 |   |
| Investments                                                                                                                                                          |   |                                         | 89     |   |   | (79 | ) |   | 5 |   |
| Net                  cash used in investing activities                                                                                                               |   |                                         | (4,960 | ) |   | (902 | ) |   | (1,266 | ) |
| Cash                  flows from financing activities:                                                                                                               |   |                                         |   |   |   |   |   |   |   |   |
| Proceeds                  from issuance of debt                                                                                                                      |   |                                         | 616    |   |   | 962 |   |   | 1,175 |   |
| Debt                  payments                                                                                                                                       |   |                                         | (3,911 | ) |   | (2,245 | ) |   | (1,359 | ) |
| Spin-off                  of subsidiary                                                                                                                              |   |                                         | (116   | ) |   | - |   |   | - |   |
| Advances                  of dividends                                                                                                                               |   |                                         | (1,302 | ) |   | - |   |   | - |   |
| Dividends                  paid                                                                                                                                      |   |                                         | -      |   |   | (2,326 | ) |   | (2,652 | ) |
| Net                  cash used in financing activities                                                                                                               |   |                                         | (4,713 | ) |   | (3,609 | ) |   | (2,836 | ) |
| Net                  increase (decrease) in cash and cash equivalents                                                                                                |   |                                         | (1,190 | ) |   | 1,235 |   |   | 778 |   |
| Cash                  and cash equivalents at beginning of year                                                                                                      |   |                                         | 2,938  |   |   | 1,703 |   |   | 925 |   |
| Cash                  and cash equivalents at end of year                                                                                                            |   |                                         | 1,748  |   |   | 2,938 |   |   | 1,703 |   |
| SUPPLEMENTAL                  DISCLOSURE:                                                                                                                            |   |                                         |   |   |   |   |   |   |   |   |
| Cash                  paid during the year for:                                                                                                                      |   |                                         |   |   |   |   |   |   |   |   |
| Interest,                  net of capitalized amounts                                                                                                                |   |                                         | 528    |   |   | 502 |   |   | 615 |   |
| Income                  taxes                                                                                                                                        |   |                                         | 2,388  |   |   | 1,315 |   |   | 911 |   |
| Non-cash                  activities:                                                                                                                                |   |                                         |   |   |   |   |   |   |   |   |
| Offset                  of accounts                                                                                                                                  |   |                                         | 398    |   |   | 264 |   |   | 57 |   |
| Payment                  of dividends using trade notes receivable                                                                                                   |   |                                         | -      |   |   | 251 |   |   | - |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(1)** | **Operations                  and Summary of Significant Accounting                  Policies** |
|---------|-------------------------------------------------------------------------------------------------|

|   | ***(a)*** | ***Operations*** |
|--------|-----------|------------------|

|   | § | Production                  tax or royalty increased from 16 2/3% to 30% of the volume of extracted                  hydrocarbons. For mature reservoirs or extra-heavy crude oil from                  the                  Orinoco Belt, the percentage ranges from 20% to 30%, and from 16                  2/3% to                  30% for bitumen, based on the profitability of those                  reservoirs. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Other                  taxes: |
|--------|--------|-------------------------------|

|   | - | Surface                  tax: equal to 100 tax units for each square kilometer or fraction                  thereof                  for each year, determined based on the concession area not under                  production; with an annual increase of 2% for five years and 5%                  in                  subsequent years. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | General                  consumption tax: applicable to each liter of hydrocarbon-derived                  product                  sold in the domestic market, the rate for which shall be fixed                  annually in                  the Budget Law at between 30% and 50% of the price paid by the                  final                  consumer. For the years 2004 and 2003 the applicable tax rate was                  30%. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Tax                  on the Company’s own consumption: equivalent to 10% of the value of each                  cubic meter of hydrocarbon-derived product, produced and consumed                  as fuel                  oil in the organization’s operations, calculated based on the final sale                  price. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Basis                  of Presentation*** |
|--------|-----------|----------------------------------------------|

|   | ***(c)*** | ***Estimates,                  Risks and                  Uncertainties*** |
|--------|-----------|----------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(d)*** | ***Consolidation*** |
|--------|-----------|---------------------|

***Subsidiaries***

***Non-Consolidated        Investees***

***Transactions        Eliminated on Consolidation***

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Jointly        Controlled Entities***

***Investments        at Cost***

|   | ***(e)*** | ***Revenue                  Recognition*** |
|--------|-----------|--------------------------------------------|

|   | ***(f)*** | ***Trade                  Accounts Receivable*** |
|--------|-----------|--------------------------------------------------|

|   | ***(g)*** | ***Inventories*** |
|--------|-----------|-------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(h)*** | ***Property,                  Plant and Equipment*** |
|--------|-----------|------------------------------------------------------|

|   | ***(i)*** | ***Impairment                  of Long-Lived Assets*** |
|--------|-----------|--------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|  | ***(j)*** | ***Accounting                  for Income Taxes*** |
|--|-----------|----------------------------------------------------|

|   | ***(k)*** | ***Employee                  Termination, Pension and Other Postretirement                  Benefits*** |
|--------|-----------|---------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(l)*** | ***Environmental                  Expenditures*** |
|--------|-----------|---------------------------------------------------|

|   | ***(m)*** | ***Commodity                  and Interest Rate                  Derivatives*** |
|--------|-----------|---------------------------------------------------------------------------------|

|   | ***(n)*** | ***Costs                  Related to Asset Retirement                  Obligations*** |
|--------|-----------|---------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(o)*** | ***Research                  and Development Costs*** |
|--------|-----------|-------------------------------------------------------|

|   | ***(p)*** | ***Segment                  Information*** |
|--------|-----------|--------------------------------------------|

|   | ***(q)*** | ***Cash                  and Cash Equivalents*** |
|--------|-----------|--------------------------------------------------|

|   | ***(r)*** | ***Reclassifications*** |
|--------|-----------|-------------------------|

|   | ***(s)*** | ***Recently                  Issued Accounting                  Standards*** |
|--------|-----------|------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(2)** | **Foreign                  Exchange Agreement with the Central Bank of Venezuela                  (BCV)** |
|---------|-----------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(3)** | **Transactions                  and Balances in Currencies Other Than the                  Dollar** |
|---------|-----------------------------------------------------------------------------------------------------|

|                                                                            |   | **December                  31** |   |
|---------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                            |   | **2004**                         |   | **2003** |   |
| Monetary                  assets:                                               |   |                             |   |   |   |   |   |
| Bolivars                                                                        |   |                             | 7,094  |   |   | 6,260 |   |
| Euros                                                                           |   |                             | 78     |   |   | 52 |   |
| Other                  currencies                                               |   |                             | 143    |   |   | 78 |   |
|                                                                            |   |                             | 7,315  |   |   | 6,390 |   |
| Monetary                  liabilities:                                          |   |                             |   |   |   |   |   |
| Bolivars                                                                        |   |                             | 8,706  |   |   | 4,459 |   |
| Euros                                                                           |   |                             | 5      |   |   | 150 |   |
| Other                  currencies                                               |   |                             | 571    |   |   | 320 |   |
|                                                                            |   |                             | 9,282  |   |   | 4,929 |   |
| Net                  monetary (liability) asset position (see notes 2 and 23-b) |   |                             | (1,967 | ) |   | 1,461 |   |

|                                                           |   | **December                  31** |     |
|----------------------------------------------------------------|--------|----------------------------------|----------|
|                                                           |   | **2004**                         |     | **2003** |   | **2002** |   |
| Exchange                  rates at year-end (Bs/$1)            |   |                             | 1,920.00 |   |   | 1,600.00 |   |   | 1,403.00 |   |
| Average                  annual exchange rates (Bs/$1)         |   |                             | 1,885.93 |   |   | 1,611.32 |   |   | 1,163.91 |   |
| Interannual                  increase in the exchange rate (%) |   |                             | 20.00    |   |   | 14.04 |   |   | 82.19 |   |
| Interannual                  increase in the CPI (%)           |   |                             | 19.18    |   |   | 27.10 |   |   | 31.22 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(4)** | **Restricted                  Cash** |
|---------|--------------------------------------|

|                                                                                                                                                                                                  |   | **December                  31** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                                                                  |   | **2004**                         |   | **2003** |   |
| Macroeconomic                  Stabilization Fund (known by its Spanish acronym as FEM), formerly                  Macroeconomic Stabilization Investment Fund (FIEM) ( see note                  19) |   |                             | 705    |   |   | 698 |   |
| Trusts                  in the Bank for Social and Economic Development in Venezuela (known                  by its                  Spanish acronym as BANDES) (see notes 19 and 23-a):              |   |                             |   |   |   |   |   |
| Programs                  and Projects for Housing and Infrastructure Development                                                                                                                     |   |                             | 613    |   |   | 302 |   |
| Programs                  and Projects related to the Ezequiel Zamora Fund for Agricultural                  Investment                                                                               |   |                             | 174    |   |   | - |   |
| Fund                  for the Economic and Social Development of the Country (known by                  its                  Spanish acronym as FONDESPA)                                             |   |                             | 1,547  |   |   | - |   |
|                                                                                                                                                                                                  |   |                             | 2,334  |   |   | 302 |   |
| Funds                  for extra-heavy crude oil projects in the Orinoco Belt                                                                                                                         |   |                             | 694    |   |   | 486 |   |
| Liquidity                  account of PDVSA Finance                                                                                                                                                   |   |                             | 13     |   |   | 166 |   |
| Other                                                                                                                                                                                                 |   |                             | 2      |   |   | 7 |   |
|                                                                                                                                                                                                  |   |                             | 3,748  |   |   | 1,659 |   |
| Less                  current portion                                                                                                                                                                 |   |                             | 709    |   |   | 659 |   |
| Long-term                  portion                                                                                                                                                                    |   |                             | 3,039  |   |   | 1,000 |   |

***Macroeconomic        Stabilization Fund (FEM)***

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

**Trusts        in BANDES**

|   | a) | Programs                  and Projects for Housing and Infrastructure Development, approved                  at the                  Stockholder’s Meeting on August 25, 2003 and established in                  bolivars; |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Programs                  and Projects as part of the                  Ezequiel Zamora Fund for Agricultural Investment, approved                  at the Stockholder’s Meeting on January 15, 2004 and established in US                  dollars; |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | FONDESPA                  approved at the Stockholder’s Meeting on January 23, 2004, established in                  US dollars and to be funded by extraordinary income from the export                  of                  crude oil and products exceeding the average price budgeted per                  barrel,                  net of royalties, taxes and other direct expenses, during                  2004. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Integral                  Agreement of Cooperation with the Republic of Argentina, subscribed                  by the                  Bolivarian Republic of Venezuela and the Republic of Argentina                  and                  approved at PDVSA’s Board of Directors’ meeting on July 15, 2004. This                  trust was incorporated in dollars. This trust will comprise cash                  and                  securities received from the Compañía Administradora del Mercado Mayorista                  Eléctrico Sociedad Anónima (CAMMESA), Argentina’s energy company, for the                  sales of crude oil and products by PDVSA under the agreement. The                  funds                  will be limited to making payments to companies located in the                  Republic of                  Argentina for the imports in Venezuela of products from that country. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **Description**                                                                                               |   | **Housing****and****Infrastructure****Development** |   | **Ezequiel****Zamora****Fund                  for****Agricultural****Investment** |   | **FONDESPA** |   | **Total** |   |
|---------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|--------------|--------|-----------|--------|
|                                                                                                          |   |                                                |   |                                                                              |   |         |   |      |   |
| Assets:                                                                                                       |   |                                                |   |                                                                              |   |         |   |      |   |   |   |   |   |
| Cash                  in banks                                                                                |   |                                                | 613    |                                                                              |   | 174          |   |      | 1,547  |   |   | 2,334 |   |
| Accounts                  receivable from PDVSA                                                               |   |                                                | 41     |                                                                              |   | -            |   |      | -      |   |   | 41 |   |
| Long-term                  accounts receivable (see notes                  9 and 19)                          |   |                                                | 41     |                                                                              |   | 156          |   |      | 202    |   |   | 399 |   |
| Total                  assets                                                                                 |   |                                                | 695    |                                                                              |   | 330          |   |      | 1,749  |   |   | 2,774 |   |
| Contributions:                                                                                                |   |                                                |   |                                                                              |   |         |   |      |   |   |   |   |   |
| Year                  2003                                                                                    |   |                                                | 300    |                                                                              |   | -            |   |      | -      |   |   | 300 |   |
| Year                  2004                                                                                    |   |                                                | 500    |                                                                              |   | 600          |   |      | 2,000  |   |   | 3,100 |   |
| Total                  contributions                                                                          |   |                                                | 800    |                                                                              |   | 600          |   |      | 2,000  |   |   | 3,400 |   |
| Retained                  earnings at beginning of year                                                       |   |                                                | 2      |                                                                              |   | -            |   |      | -      |   |   | 2 |   |
| Result                  for the year 2004                                                                     |   |                                                | (107   | )                                                                                 |   | (270         | )      |      | (251   | ) |   | (628 | ) |
| Deficit                  at year end                                                                          |   |                                                | (105   | )                                                                                 |   | (270         | )      |      | (251   | ) |   | (626 | ) |
| Total                  net contributions                                                                      |   |                                                | 695    |                                                                              |   | 330          |   |      | 1,749  |   |   | 2,774 |   |
| Results                  of operations:                                                                       |   |                                                |   |                                                                              |   |         |   |      |   |   |   |   |   |
| Interest                  income                                                                              |   |                                                | 24     |                                                                              |   | 5            |   |      | 13     |   |   | 42 |   |
| Commissions                  and expenses, net                                                                |   |                                                | (1     | )                                                                                 |   | (2           | )      |      | (2     | ) |   | (5 | ) |
| Expenses                  for social development (see note 19)                                                |   |                                                | (4     | )                                                                                 |   | -            |   |      | (22    | ) |   | (26 | ) |
| Adjustments                  to the fair value of long-term accounts receivable (see note                  9) |   |                                                | (75    | )                                                                                 |   | (273         | )      |      | (240   | ) |   | (588 | ) |
| Exchange                  loss                                                                                |   |                                                | (51    | )                                                                                 |   | -            |   |      | -      |   |   | (51 | ) |
| Net                  results of operations                                                                    |   |                                                | (107   | )                                                                                 |   | (270         | )      |      | (251   | ) |   | (628 | ) |

***Funds        for Extra-heavy Crude Oil Projects in the Orinoco        Belt***

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Liquidity        Account of PDVSA Finance***

| **(5)** | **Notes                  and Accounts Receivable** |
|---------|----------------------------------------------------|

|                                                                   |   | **December                  31** |   |
|------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                   |   | **2004**                         |   | **2003** |   |
| Trade                                                                  |   |                             | 4,305  |   |   | 4,152 |   |
| Related                  parties (see note 19)                         |   |                             | 532    |   |   | 507 |   |
| Other                                                                  |   |                             | 515    |   |   | 421 |   |
|                                                                   |   |                             | 5,352  |   |   | 5,080 |   |
| Less                  allowance for doubtful trade accounts receivable |   |                             | 217    |   |   | 125 |   |
|                                                                   |   |                             | 5,135  |   |   | 4,955 |   |

| **(6)** | **Inventories** |
|---------|-----------------|

|                                                                                                                              |   | **December                  31** |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                                                              |   | **2004**                         |   | **2003** |   |
| Crude                  oil and products                                                                                           |   |                             | 2,229  |   |   | 1,952 |   |
| Fertilizers,                  industrial products, coal, Orimulsion® and other                                               |   |                             | 111    |   |   | 50 |   |
| Materials                  and supplies                                                                                           |   |                             | 560    |   |   | 461 |   |
|                                                                                                                              |   |                             | 2,900  |   |   | 2,463 |   |
| Less                  materials and supplies classified in non-current assets, net (see                  note                  9) |   |                             | 76     |   |   | 81 |   |
|                                                                                                                              |   |                             | 2,824  |   |   | 2,382 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(7)** | **Investments                  in Non-Consolidated                  Investees** |
|---------|---------------------------------------------------------------------------------|

|                                                                                                                              |   | **December                  31**                                     |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|                                                                                                                              |   | **Percentage                  of****Capital                  stock** |   | **Share                  of****equity** |   |
|                                                                                                                              |   | **2004**                                                             |   | **2003** |   | **2004** |   | **2003** |   |
| Foreign                  investees:                                                                                               |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| United                  States of America:                                                                                        |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| CITGO                  investees:                                                                                                 |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| LYONDELL-CITGO                  Refining, LP (LYONDELL-CITGO)                                                                     |   |                                                                 | 41     |   |   | 41 |   |   | 410 |   |   | 455 |   |
| The                  Needle Coker Co. (Needle Coker)                                                                              |   |                                                                 | 25     |   |   | 25 |   |   | - |   |   | 18 |   |
| Other                                                                                                                             |   |                                                                 | -      |   |   | - |   |   | 171 |   |   | 174 |   |
| Chalmette                  Refining L.L.C. (Chalmette Refining)                                                                   |   |                                                                 | 50     |   |   | 50 |   |   | 339 |   |   | 254 |   |
| Merey                  Sweeny L.P. (Merey Sweeny)                                                                                 |   |                                                                 | 50     |   |   | 50 |   |   | 30 |   |   | 19 |   |
| Virgin                  Islands:                                                                                                  |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Hovensa                  L.L.C. (Hovensa)                                                                                         |   |                                                                 | 50     |   |   | 50 |   |   | 1,050 |   |   | 888 |   |
|                                                                                                                              |   |                                                                 |   |   |   |   |   |   | 2,000 |   |   | 1,808 |   |
| Germany:                                                                                                                          |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Ruhr                  Oel GmbH (Ruhr)                                                                                             |   |                                                                 | 50     |   |   | 50 |   |   | 187 |   |   | 172 |   |
| Sweden:                                                                                                                           |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| AB                  Nynäs Petroleum (Nynas)                                                                                  |   |                                                                 | 50     |   |   | 50 |   |   | 135 |   |   | 103 |   |
| Colombia:                                                                                                                         |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Monómeros                  Colombo Venezolanos, S.A. (Monómeros)                                                        |   |                                                                 | 47     |   |   | 47 |   |   | 38 |   |   | 29 |   |
| Other:                                                                                                                            |   |                                                                 |   |   |   |   |   |   |  |   |   |  |   |
| Bitúmenes                  Orinoco, S. A. (BITOR)                                                                            |   |                                                                 | 50     |   |   | 50 |   |   | 5 |   |   | 4 |   |
|                                                                                                                              |   |                                                                 |   |   |   |   |   |   | 2,365 |   |   | 2,116 |   |
| Investees                  in Venezuela:                                                                                          |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Petrolera                  Zuata, C. A. (Petrozuata)                                                                              |   |                                                                 | 50     |   |   | 50 |   |   | 514 |   |   | 419 |   |
| Fertilizantes                  Nitrogenados de Venezuela, C.E.C. (Fertinitro)                                                     |   |                                                                 | 35     |   |   | 35 |   |   | 178 |   |   | 144 |   |
| Metanol                  de Oriente, S. A. (METOR)                                                                                |   |                                                                 | 38     |   |   | 38 |   |   | 116 |   |   | 110 |   |
| Carbones                  del Guasare, S.A., subsidiary of Carbones del Zulia, S. A. (CARBOZULIA)                  (see note 1-d) |   |                                                                 | -      |   |   | 49 |   |   | - |   |   | 76 |   |
| Supermetanol,                  C. A.                                                                                              |   |                                                                 | 35     |   |   | 35 |   |   | 81 |   |   | 64 |   |
| Super                  Octanos, C. A.                                                                                             |   |                                                                 | 49     |   |   | 49 |   |   | 112 |   |   | 101 |   |
| Ceras                  de Venezuela, C. A. (Ceraven)                                                                              |   |                                                                 | 49     |   |   | 49 |   |   | 10 |   |   | 10 |   |
| Propilenos                  de Falcón, C. A. (Profalca)                                                                      |   |                                                                 | 35     |   |   | 35 |   |   | 21 |   |   | 14 |   |
| Tripoliven,                  C. A.                                                                                                |   |                                                                 | 33     |   |   | 33 |   |   | 5 |   |   | 6 |   |
| Aguas                  Industriales de Jose, C. A.                                                                                |   |                                                                 | 25     |   |   | 25 |   |   | 12 |   |   | 11 |   |
| Other                                                                                                                             |   |                                                                 | -      |   |   | - |   |   | 5 |   |   | 1 |   |
| Total                  non-consolidated investees                                                                                 |   |                                                                 |   |   |   |   |   |   | 1,054 |   |   | 956 |   |
|                                                                                                                              |   |                                                                 |   |   |   |   |   |   | 3,419 |   |   | 3,072 |   |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                             |   | **December                  31** |   |
|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                                             |   | **2004**                         |   | **2003** |   |
| PDVSA’s                  investments in non-consolidated investees (see note 19)                           |   |                             | 3,419  |   |   | 3,072 |   |
| PDVSA’s                  equity in net income of non-consolidated investees (see note                  19) |   |                             | 1,041  |   |   | 379 |   |
| Dividends                  and distributions received from non-consolidated investees                            |   |                             | 605    |   |   | 240 |   |
| Investments,                  including exchange effects                                                         |   |                             | (89    | ) |   | 79 |   |

|                                             |   | **December                  31** |   |
|--------------------------------------------------|--------|----------------------------------|--------|
|                                             |   | **2004**                         |   | **2003** |   |
|                                             |   | **Venezuela**                    |   | **Abroad** |   | **Total** |   | **Venezuela** |   | **Abroad** |   | **Total** |   |
| Financial                  position:             |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Current                  assets                  |   |                             | 958    |   |   | 3,162 |   |   | 4,120 |   |   | 844 |   |   | 2,641 |   |   | 3,485 |   |
| Non-current                  assets              |   |                             | 4,775  |   |   | 7,222 |   |   | 11,997 |   |   | 4,846 |   |   | 7,266 |   |   | 12,112 |   |
| Current                  liabilities             |   |                             | (642   | ) |   | (2,515 | ) |   | (3,157 | ) |   | (547 | ) |   | (1,998 | ) |   | (2,545 | ) |
| Long-term                  liabilities           |   |                             | (2,551 | ) |   | (4,163 | ) |   | (6,714 | ) |   | (2,920 | ) |   | (4,504 | ) |   | (7,424 | ) |
| Net                  equity                      |   |                             | 2,540  |   |   | 3,706 |   |   | 6,246 |   |   | 2,223 |   |   | 3,405 |   |   | 5,628 |   |
| Operating                  results for the year: |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                         |   |                             | 2,317  |   |   | 21,599 |   |   | 23,916 |   |   | 1,559 |   |   | 16,142 |   |   | 17,701 |   |
| Operating                  income                |   |                             | 1,099  |   |   | 2,264 |   |   | 3,363 |   |   | 598 |   |   | 1,360 |   |   | 1,958 |   |
| Net                  income                      |   |                             | 618    |   |   | 1,811 |   |   | 2,429 |   |   | 294 |   |   | 798 |   |   | 1,092 |   |

| **(8)** | **Property,                  Plant and Equipment, Net** |
|---------|---------------------------------------------------------|

|                                                         |   | **December                  31** |   |
|--------------------------------------------------------------|--------|----------------------------------|--------|
|                                                         |   | **2004**                         |   | **2003** |   |
| Oil                  and gas production                      |   |                             | 44,526 |   |   | 42,880 |   |
| Refining,                  marketing and transportation      |   |                             | 26,623 |   |   | 25,075 |   |
| Petrochemical                                                |   |                             | 3,337  |   |   | 3,353 |   |
| Other                                                        |   |                             | 899    |   |   | 1,386 |   |
|                                                         |   |                             | 75,385 |   |   | 72,694 |   |
| Less                  accumulated depreciation and depletion |   |                             | 44,631 |   |   | 42,142 |   |
|                                                         |   |                             | 30,754 |   |   | 30,552 |   |
| Land                                                         |   |                             | 351    |   |   | 350 |   |
| Construction                  in progress                    |   |                             | 3,607  |   |   | 3,818 |   |
|                                                         |   |                             | 34,712 |   |   | 34,720 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                    |   | **Years                  Ended ****December                  31** |   |
|-------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                                    |   | **2004**                                                               |   | **2003** |   | **2002** |   |
| Depreciation                  and depletion                             |   |                                                                   | 2,829  |   |   | 2,824 |   |   | 3,038 |   |
| Impairment                  charges                                     |   |                                                                   | 6      |   |   | 296 |   |   | 722 |   |
| Asset                  retirement obligation (see notes 1-n, 17 and 18) |   |                                                                   | 642    |   |   | 537 |   |   | - |   |
| Capitalized                  interest                                   |   |                                                                   | 29     |   |   | 40 |   |   | 51 |   |

|  | (a) | The                  Plataforma Deltana Gas project includes the participation of third                  parties                  to complete the exploration and future development of the area.                  PDVSA                  completed the project’s initial phase, including 3D seismic analyses and                  the drilling of four exploratory wells that culminated in July,                  2003. The                  estimated total capital investment for this project amounted to                  $3,810                  million. At December 31, 2004, total investment in this project                  amounted                  to $140 million (see note 10-d). |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | The                  purpose of the Anaco Gas project is to increase the production                  of gas to                  meet the domestic market’s demand. Currently, the drilling process of                  exploratory wells located north of Anaco, Anzoátegui State is underway.                  This project includes the design and construction of facilities                  to                  increase the daily gas production to 2,400 million cubic feet per                  day                  (MMCFD) and 35 thousand barrels per day (MBPD) of light crude.                  The                  production capacity of this project is expected to reach 2,400                  MMCFD by                  2007. The estimated total capital investment for this project amounted                  to                  $732 million. At December 31, 2004, total investment in this project                  amounted to $118 million. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | The                  main purpose of the Integral Ceuta-Tomoporo project is to maximize                  the                  recoverable crude oil reserves value of Ceuta-Tomoporo, which has                  estimated reserves of 1,000 million barrels of 23.6 API crude oil.                  Total                  investment costs will be approximately $1,200 million, with an                  average                  crude oil production of 90 MBPD to 277 MBPD. At December 31, 2004,                  total                  investment in this project amounted to $174 million. It is estimated                  that                  the development project relating to these reserves will end in                  2021. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | The                  Mariscal Sucre for Liquefied Natural Gas (LNG) project is intended                  to                  develop and exploit the reserves of non-associated offshore gas,                  as well                  as the construction of a liquefied natural gas plant, for projected                  gas                  production of 1,200 MMCFD and the processing of 4.7 million metric                  tons                  per year (MMT/Y) of LNG; 300 MMCFD of methane gas that will be                  used to                  meet the domestic market’s demand, and the remainder of the production is                  expected to be exported. The investment required for the development                  of                  offshore fields, the LNG plant and the associated infrastructure                  is                  estimated to total $2,700 million. At December 31, 2004, total                  investment                  in this project amounted to $12                  million. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | (e) | The                  purpose of the Interconexión Oriente-Occidente (ICO) project is to connect                  the natural gas transmission systems of the central and eastern                  region of                  Venezuela (Anaco, Anzóategui State, Barquisimeto, Lara State) with the                  transmission system located in the country’s western region (Ulé-Amuay,                  Falcón State) in order to cover the gas demand of the country’s western                  region, expand the gas service to other regions nationwide and                  to promote                  the industrial and commercial development in areas near the construction                  of this transmission system. The estimated total investment in                  this                  project is $413 million and it is expected to be completed by 2007.                  At                  December 31, 2004, total investment in this project amounted to                  $47                  million. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | The                  Complejo Industrial Gran Mariscal de Ayacucho (CIGMA) project,                  involves                  the construction of infrastructure in Güiria, Sucre State, for the                  development and industrialization of natural gas in the oriental                  offshore.                  The total cost of the work is estimated at $334 million and the                  income from the project will be from the sale of land lots for                  industrial                  use, duly developed and endowed with all the relevant services.                  This                  complex will gather the diverse gas streams delivered by the offshore                  northern-eastern gas development projects, including the Plataforma                  Deltana, Mariscal Sucre, as well as further medium and long-term                  projects.                  These gas volumes will be primarily destined to supply the Venezuelan                  internal market’s demand and the national industrialization plans. The                  excess gas volumes will be exported as Liquefied Natural Gas (LNG).                  The                  scope of the CIGMA project also includes the installation of a                  LNG plant                  required for this purpose. The estimated total capital investment                  for this                  project amounted to $344 million. At December 31, 2004, total investment                  in this project amounted to $4 million (see note                  10-d). |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (g) | The                  purpose of the Complejo Criogénico de Occidente (CCO) project is to                  optimize the processing of natural gas in the country’s western region.                  The estimated total investment for this project amounted to $600                  million.                  At December 31, 2004, total investment in this project amounted                  to $15                  million. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                     |   | **Leases**    |   |
|----------------------------------------------------------------------------------------------------------|--------|---------------|--------|
| **Years**                                                                                                |   | **Operating** |   | **Capital** |   |
| 2005                                                                                                     |   |          | 259    |   |   | 8 |   |
| 2006                                                                                                     |   |          | 251    |   |   | 8 |   |
| 2007                                                                                                     |   |          | 206    |   |   | 8 |   |
| 2008                                                                                                     |   |          | 194    |   |   | 8 |   |
| 2009                                                                                                     |   |          | 179    |   |   | 8 |   |
| Remaining                  years                                                                         |   |          | 380    |   |   | 33 |   |
| Estimated                  future lease payments                                                         |   |          | 1,469  |   |   | 73 |   |
| Less                  interest                                                                           |   |          |   |   |   | 25 |   |
| Present                  value, included in accrued and other liabilities (see note                  18) |   |          |   |   |   | 48 |   |

| **(9)** | **Long                  - Term Accounts Receivable and Other                  Assets** |
|---------|----------------------------------------------------------------------------------------|

|                                                                              |   | **December                    31** |        |
|-----------------------------------------------------------------------------------|--------|------------------------------------|-------------|
|                                                                              |   | **2004**                           |        | **2003** |   |
| Long-term                    accounts receivable (see note 19)                    |   |                               | 727         |   |   | 680 |   |
| Materials                    and supplies (see note 6)                            |   |                               | 76          |   |   | 81 |   |
| Plan                    turnaround costs, net amortization and short-term portion |   |                               | 662         |   |   | 430 |   |
| Goodwill                                                                          |   |                               | 63          |   |   | 52 |   |
| Intangible                    pension plan asset (see note 16)                    |   |                               | 87          |   |   | 40 |   |
| Funding                  for social programs and projects (see notes 4 and 19)    |   |                               | 399         |   |   | - |   |
| Building                    used by governmental entities (see notes 8 and 19)    |   |                               | 133         |   |   | - |   |
| Others                                                                            |   |                               | 147         |   |   | 133 |   |
|                                                                              |   |                               | 2,294  |   |   | 1,396 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                    |   | **Contractual****value** |   | **Fair****value** |   | **Adjustment****to                  fair****value** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|-------------------|--------|-----------------------------------------------------|--------|
| Programs                  and Projects for Housing and Infrastructure Development                                       |   |                     | 116    |              |   | 41                                                  |   |   | 75 |   |
| Programs                  and Projects related to the Ezequiel Zamora Fund for Agricultural                  Investment |   |                     | 429    |              |   | 156                                                 |   |   | 273 |   |
| FONDESPA                                                                                                                |   |                     | 442    |              |   | 202                                                 |   |   | 240 |   |
|                                                                                                                    |   |                     | 987    |              |   | 399                                                 |   |   | 588 |   |

| **(10)** | **Joint                  Development Activities** |
|----------|---------------------------------------------------|

|   | ***(a)*** | ***Development                  of the Orinoco Belt Extra-Heavy Crude Oil                  Reserves*** |
|--------|-----------|--------------------------------------------------------------------------------------------------------|

|                         |   |                                            |   |                                             |   | **In                  Millions of Dollars**                                          |
|------------------------------|--------|-------------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------------------------------------------------|
| **Association**              |   | **PDVSA ́s****percentage****participation** |   | **Partners**                                     |   | **Estimated                  gross****project                  cost****(unaudited)** |   | **Incurred                  as of****December                  31, 2004****(unaudited)** |   | **Incurred                  as of****December                  31, 2003****(unaudited)** |
| Petrozuata                   |   | 49.90                                           |   | ConocoPhillips                                   |   | 3,085                                                                                |   | 3,478 |   | 3,478 |
| Cerro                  Negro |   | 41.67                                           |   | ExxonMobil-BP                                    |   | 2,018                                                                                |   | 2,723 |   | 2,723 |
| Sincor                       |   | 38.00                                           |   | Total                  Fina - Statoil            |   | 4,260                                                                                |   | 4,185 |   | 4,185 |
| Hamaca                       |   | 30.00                                           |   | ChevronTexaco                  - Conoco Phillips |   | 3,534                                                                                |   | 3,481 |   | 2,544 |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                             |   | **December                  31** |   |
|--------------------------------------------------|--------|----------------------------------|--------|
|                                             |   | **2004**                         |   | **2003** |   |
| Financial                  position:             |   |                             |   |   |   |   |   |
| Current                  assets                  |   |                             | 1,056  |   |   | 862 |   |
| Non-current                  assets              |   |                             | 9,776  |   |   | 9,011 |   |
| Current                  liabilities             |   |                             | (1,008 | ) |   | (596 | ) |
| Long-term                  liabilities           |   |                             | (2,439 | ) |   | (3,544 | ) |
| Net                  equity                      |   |                             | 7,385  |   |   | 5,733 |   |
|                                             |   |                             |   |   |   |   |   |
| Operating                  results for the year: |   |                             |   |   |   |   |   |
| Revenues                                         |   |                             | 2,911  |   |   | 1,840 |   |
| Costs                  and expenses              |   |                             | (1,364 | ) |   | (654 | ) |
| Operating                  income                |   |                             | 1,547  |   |   | 1,186 |   |
| Net                  income                      |   |                             | 1,432  |   |   | 998 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Association                  Agreements in New                  Areas*** |
|--------|-----------|-----------------------------------------------------------------------------|

| **Areas**                             |   | **CVP                    partners**                                                                                        |   | **Jointly                    owned Companies**                                                |
|---------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|
| Eastern                    Paria Gulf |   | Ineparia                    - Conoco Venezuela, C.A. - ENI B.V. (ENI) - OPIC Karimun Corporation                    (OPIC) |   | Administradora                    del Golfo de Paria Este, S. A.                              |
| Western                    Paria Gulf |   | Conoco                    Venezuela, C.A. - ENI - OPIC                                                                     |   | Compañía                    Agua Plana, S.A.                                        |
| La                    Ceiba           |   | Exxon                    Mobil - PetroCanada                                                                               |   | Administradora                    Petrolera La Ceiba, C. A.                                   |
| San                    Carlos (1)     |   | Petrobrás                    Energía de Venezuela, S. A.                                                         |   | Compañía                    Anónima Mixta San Carlos, S.                    A. |

|  | (1) | Changed                  to a gas license in 2002 |
|--|-----|---------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(c)*** | ***Operating                  Agreements*** |
|--------|-----------|---------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                    |   | **Years                  ended December 31** |   |
|-----------------------------------------|--------|----------------------------------------------|--------|
|                                    |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Operating                  fees         |   |                                         | 1,242  |   |   | 959 |   |   | 852 |   |
| Capital                  fees and other |   |                                         | 769    |   |   | 638 |   |   | 629 |   |
| Stipends                                |   |                                         | 1,181  |   |   | 748 |   |   | 620 |   |
|                                    |   |                                         | 3,192  |   |   | 2,345 |   |   | 2,101 |   |

|  | ***(d)*** | ***Projects                  for Development of Offshore Natural Gas - Plataforma                  Deltana*** |
|--|-----------|---------------------------------------------------------------------------------------------------------------|

|  | ***(e)*** | ***Cooperation                  Agreement for                  Orimulsión®*** |
|--|-----------|-----------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|  | ***(f)*** | ***Energy                  Agreements with Latin America and the                  Caribbean*** |
|--|-----------|------------------------------------------------------------------------------------------------|

| **Country**                          |   | **Company** |   | **MBPD** |
|--------------------------------------|--------|-------------|--------|----------|
| Dominican                  Republic  |   | REFIDOMSA   |   | 50       |
| Argentina                            |   | CAMMESA     |   | 9        |
| Paraguay                             |   | PETROPAR    |   | 19       |
| Bolivia                              |   | YPFB        |   | 2        |
| Jamaica                              |   | PETROJAM    |   | 21       |
| Caribbean                  countries |   | Various     |   | 28       |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(11)** | **Accounts                  Payable to Suppliers** |
|----------|----------------------------------------------------|

|                                                  |   | **December                  31** |   |
|-------------------------------------------------------|--------|----------------------------------|--------|
|                                                  |   | **2004**                         |   | **2003** |   |
| Trade                                                 |   |                             | 3,516  |   |   | 2,482 |   |
| Related                  entities (see note 19)       |   |                             | 297    |   |   | 269 |   |
| Operating                  agreements (see note 10-c) |   |                             | 758    |   |   | 614 |   |
|                                                  |   |                             | 4,571  |   |   | 3,365 |   |

| **(12)** | **Taxes** |
|----------|-----------|

|                                        |   | **Years                  ended December 31** |   |
|---------------------------------------------|--------|----------------------------------------------|--------|
|                                        |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Income                  taxes               |   |                                         | 4,753  |   |   | 1,602 |   |   | 149 |   |
| Production                  and other taxes |   |                                         | 9,247  |   |   | 6,428 |   |   | 5,748 |   |
|                                        |   |                                         | 14,000 |   |   | 8,030 |   |   | 5,897 |   |

|   | ***(a)*** | ***Income                  before Income Taxes*** |
|--------|-----------|---------------------------------------------------|

|                          |   | **Years                  ended December 31** |   |
|-------------------------------|--------|----------------------------------------------|--------|
|                          |   | **2004**                                     |   | **2003** |   | **2002** |   |
| In                  Venezuela |   |                                         | 7,292  |   |   | 3,605 |   |   | 2,283 |   |
| Foreign                       |   |                                         | 1,881  |   |   | 957 |   |   | 461 |   |
|                          |   |                                         | 9,173  |   |   | 4,562 |   |   | 2,744 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                    |   | **Years                  ended December 31** |   |
|---------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                    |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Current                  income tax expense:            |   |                                         |   |   |   |   |   |
| In                  Venezuela                           |   |                                         | 4,884  |   |   | 1,556 |   |   | 663 |   |
| Foreign                                                 |   |                                         | 393    |   |   | 99 |   |   | 38 |   |
|                                                    |   |                                         | 5,277  |   |   | 1,655 |   |   | 701 |   |
| Deferred                  income tax (benefit) expense: |   |                                         |   |   |   |   |   |   |   |   |
| In                  Venezuela                           |   |                                         | (522   | ) |   | (194 | ) |   | (613 | ) |
| Foreign                                                 |   |                                         | (2     | ) |   | 141 |   |   | 61 |   |
|                                                    |   |                                         | (524   | ) |   | (53 | ) |   | (552 | ) |
| Income                  tax expense                     |   |                                         | 4,753  |   |   | 1,602 |   |   | 149 |   |

|                                                                                                             |   | **Years                  ended December 31** |   |
|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                             |   | **2004**                                     |   | **2003** |   | **2002** |   |
|                                                                                                             |   | **%**                                        |   | **%** |   | **%** |   |
| In                  Venezuela:                                                                                   |   |                                         |   |   |   |   |   |   |   |   |
| Statutory                  income tax rate for the petroleum sector                                              |   |                                         | 50.0   |   |   | 50.0 |   |   | 50.0 |   |
| Inflation                  adjustment for tax purposes net of effects of translation to                  dollars |   |                                         | 15.0   |   |   | 19.8 |   |   | (75.1 | ) |
| Effects                  of subsidiaries' income taxed at 34% tax rate                                           |   |                                         | (6.8   | ) |   | (1.8 | ) |   | (4.7 | ) |
| Operating                  agreements                                                                            |   |                                         | (4.9   | ) |   | - |   |   | - |   |
| Fair                  value loss on financial instruments                                                        |   |                                         | 7.2    |   |   | - |   |   | - |   |
| Change                  in valuation allowance                                                                   |   |                                         | (5.9   | ) |   | (29.2 | ) |   | - |   |
| Tax                  losses                                                                                      |   |                                         | -      |   |   | - |   |   | 45.8 |   |
| FIEM/FEM                                                                                                         |   |                                         | (0.6   | ) |   | (3.2 | ) |   | (24.8 | ) |
| Transfer                  pricing adjustment                                                                     |   |                                         | 2.0    |   |   | (2.8 | ) |   | 5.2 |   |
| Dividend                  tax                                                                                    |   |                                         | 7.0    |   |   | 5.0 |   |   | 0.1 |   |
| Other                  differences, net                                                                          |   |                                         | (3.2   | ) |   | (1.8 | ) |   | 3.5 |   |
| Effective                  income tax rate in Venezuela                                                          |   |                                         | 59.8   |   |   | 36.0 |   |   | - |   |
|                                                                                                             |   |                                         |   |   |   |   |   |   |   |   |
| Foreign:                                                                                                         |   |                                         |   |   |   |   |   |   |   |   |
| Effects                  of foreign taxation                                                                     |   |                                         | (8.0   | ) |   | (0.9 | ) |   | 5.4 |   |
| Consolidated                  effective income tax rate                                                          |   |                                         | 51.8   |   |   | 35.1 |   |   | 5.4 |   |

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|                                          |   | **Tax                  credits** |   | **Tax                  losses** |   |
|-----------------------------------------------|--------|----------------------------------|--------|---------------------------------|--------|
| **Years                  ended**              |   | **Tax****credits**               |   | **Tax****effect**               |   | **Tax****losses** |   | **Tax****effect** |   |
|                                          |   |                             |   |                            |   |   |   |   |   |
| Year                  ended December 31, 2004 |   |                             | 201    |                            |   | 201 |   |   | 217 |   |   | 108 |   |
| Year                  ended December 31, 2003 |   |                             | 151    |                            |   | 151 |   |   | 1,984 |   |   | 903 |   |

|                         |   | **Years                  ended December 31** |   |
|------------------------------|--------|----------------------------------------------|--------|
|                         |   | **2005**                                     |   | **2006** |   | **2007** |   |
| Tax                  credits |   |                                         | 88     |   |   | 81 |   |   | 130 |   |
| Tax                  losses  |   |                                         | 37     |   |   | 1 |   |   | - |   |

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|                                                               |   | **December                  31** |   |
|--------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                               |   | **2004**                         |   | **2003** |   |
| Deferred                  tax assets:                              |   |                             |   |   |   |   |   |
| Accruals                  for employee benefits                    |   |                             | 1,018  |   |   | 801 |   |
| Accounts                  receivable                               |   |                             | 230    |   |   | - |   |
| Property,                  plant and equipment                     |   |                             | 196    |   |   | 114 |   |
| Production                  tax payable                            |   |                             | 41     |   |   | - |   |
| Deferred                  charges on intercompany transactions     |   |                             | 210    |   |   | 58 |   |
| Investment                  tax credits and tax loss carryforwards |   |                             | 312    |   |   | 371 |   |
| Accruals                  for contingencies                        |   |                             | 379    |   |   | 284 |   |
| Other                                                              |   |                             | 110    |   |   | 49 |   |
|                                                               |   |                             | 2,496  |   |   | 1,677 |   |
| Less                  valuation allowance                          |   |                             | 31     |   |   | 371 |   |
|                                                               |   |                             | 2,465  |   |   | 1,306 |   |
| Deferred                  tax liabilities:                         |   |                             |   |   |   |   |   |
| Property,                  plant and equipment                     |   |                             | 859    |   |   | 779 |   |
| Investments                  in consolidated investees             |   |                             | 328    |   |   | - |   |
| Investments                  in non-consolidated investees         |   |                             | 284    |   |   | 267 |   |
| Inventories                                                        |   |                             | 79     |   |   | - |   |
| Other                                                              |   |                             | 179    |   |   | 48 |   |
|                                                               |   |                             | 1,729  |   |   | 1,094 |   |
| Net                  deferred tax assets                           |   |                             | 736    |   |   | 212 |   |

|                                   |   | **December                  31** |   |
|----------------------------------------|--------|----------------------------------|--------|
|                                   |   | **2004**                         |   | **2003** |   |
| Current                  assets        |   |                             | 719    |   |   | 257 |   |
| Long-term                  assets      |   |                             | 1,746  |   |   | 1,049 |   |
| Current                  liabilities   |   |                             | (370   | ) |   | (28 | ) |
| Long-term                  liabilities |   |                             | (1,359 | ) |   | (1,066 | ) |
|                                   |   |                             | 736    |   |   | 212 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Production                  Tax*** |
|--------|-----------|---------------------------------------|

|   | ***(c)*** | ***Business                  Assets Tax*** |
|--------|-----------|--------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(d)*** | ***Value                  Added Tax*** |
|--------|-----------|----------------------------------------|

|                                                         |   | **Years                  ended December 31** |   |
|--------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                         |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Tax                  credits receivable at beginning of year |   |                                         | 2,150  |   |   | 1,933 |   |   | 2,150 |   |
| Generated                  during the year                   |   |                                         | 1,264  |   |   | 453 |   |   | 753 |   |
| Exchange                  loss                               |   |                                         | (358   | ) |   | (236 | ) |   | (970 | ) |
| Tax                  credits receivable at end of year       |   |                                         | 3,056  |   |   | 2,150 |   |   | 1,933 |   |

|   | ***(e)*** | ***Sales                  and Excise Taxes*** |
|--------|-----------|-----------------------------------------------|

|   | ***(f)*** | ***Surface                  Tax*** |
|--------|-----------|------------------------------------|

| **(13)** | **Financial                  and Derivative Instruments** |
|----------|-----------------------------------------------------------|

|   | ***(a)*** | ***Commodity                  Derivative Activity and Interest Rate Swap and Cap                  Agreements*** |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Concentration                  of Credit Risk*** |
|--------|-----------|-----------------------------------------------------|

|   | ***(c)*** | ***Fair                  Value of Financial                  Instruments*** |
|--------|-----------|-----------------------------------------------------------------------------|

|                                                                                                                |   | **2004**               |   | **2003**          |   |
|---------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|-------------------|--------|
|                                                                                                                |   | **Carrying****amount** |   | **Fair****value** |   | **Carrying****amount** |   | **Fair****value** |   |
| Assets:                                                                                                             |   |                   |   |              |   |   |   |   |   |
| Cash                  and cash equivalents                                                                          |   |                   | 1,748  |              |   | 1,748 |   |   | 2,938 |   |   | 2,938 |   |
| Restricted                  cash                                                                                    |   |                   | 3,748  |              |   | 3,748 |   |   | 1,659 |   |   | 1,659 |   |
| Notes                  and accounts receivable                                                                      |   |                   | 5,135  |              |   | 5,135 |   |   | 4,955 |   |   | 4,955 |   |
| Recoverable                  value added tax                                                                        |   |                   | 3,056  |              |   | 2,728 |   |   | 2,150 |   |   | 1,919 |   |
| Long-term                  accounts receivable (included in other assets)                                           |   |                   | 1,126  |              |   | 1,097 |   |   | 680 |   |   | 680 |   |
| Derivative                  assets (included in prepaid expenses and other)                                         |   |                   | 16     |              |   | 16 |   |   | 20 |   |   | 20 |   |
|                                                                                                                |   |                   |   |              |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                        |   |                   |   |              |   |   |   |   |   |   |   |   |   |
| Accounts                  payable to suppliers                                                                      |   |                   | 4,571  |              |   | 4,571 |   |   | 3,365 |   |   | 3,365 |   |
| Current                  portion of long-term debt                                                                  |   |                   | 1,004  |              |   | 1,006 |   |   | 750 |   |   | 737 |   |
| Long-term                  debt, net of current portion                                                             |   |                   | 2,716  |              |   | 2,743 |   |   | 6,265 |   |   | 6,186 |   |
| Taxes                  and long-term accounts payables (included in accrued and other                  liabilities) |   |                   | 1,881  |              |   | 1,872 |   |   | 1,759 |   |   | 1,733 |   |
| Derivative                  liabilities (included in accrued and other liabilities)                                 |   |                   | 15     |              |   | 15 |   |   | 8 |   |   | 8 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(14)** | **Long-Term                  Debt** |
|----------|-------------------------------------|

|                                                                                                                                                                     |   | **December                    31** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                                                                                                     |   | **2004**                           |   | **2003** |   |
| PDV                    America/CITGO (see note 23-h):                                                                                                                    |   |                               |   |   |   |
| Preferential                    bonds for $250 million, 6% unsecured senior notes, due                    2011                                                           |   |                               | 248    |   |   | - |   |
| Variable                    rate senior secured term loan with CITGO's stock participation                    in two                    affiliates, due 2006             |   |                               | -      |   |   | 200 |   |
| 7.875%                    unsecured senior notes under $200 million shelf registration,                    due                    2006                                   |   |                               | 150    |   |   | 150 |   |
| 9.3%                    unsecured private placement senior notes, due 2004 to 2006                                                                                       |   |                               | 23     |   |   | 34 |   |
| 7.17%                    to 8.94% unsecured master shelf agreement senior notes, due                    2004-2009                                                        |   |                               | 165    |   |   | 185 |   |
| Tax                    - exempt bonds, due 2004 to 2033 with variable and fixed interest                    rates,                    guaranteed with letters of credits |   |                               | 459    |   |   | 332 |   |
| Variable                    rate taxable bonds guaranteed with letters of credit, due                    2026                                                            |   |                               | 80     |   |   | 25 |   |
| 11.375%                    unsecured senior notes, due 2011                                                                                                              |   |                               | 7      |   |   | 547 |   |
|                                                                                                                                                                     |   |                               | 1,132  |   |   | 1,473 |   |
| PDVSA                    Finance - Unsecured notes (see note 23-m)                                                                                                       |   |                               |   |   |   |   |   |
| 6.45%                    due 2002 through 2004                                                                                                                           |   |                               | -      |   |   | 50 |   |
| 8.75%                    due 2000 through 2004                                                                                                                           |   |                               | -      |   |   | 28 |   |
| 6.25%                    due 2002 through 2006 (in euros)                                                                                                                |   |                               | 1      |   |   | 142 |   |
| 6.65%                    due 2004 through 2006                                                                                                                           |   |                               | 7      |   |   | 300 |   |
| 9.37%                    due 2004 through 2007                                                                                                                           |   |                               | 5      |   |   | 250 |   |
| 6.80%                    due 2007 through 2008                                                                                                                           |   |                               | 6      |   |   | 300 |   |
| 9.75%                    due 2008 through 2010                                                                                                                           |   |                               | 24     |   |   | 250 |   |
| 8.50%                    due 2010 through 2012                                                                                                                           |   |                               | 29     |   |   | 500 |   |
| 7.40%                    due 2014 through 2016                                                                                                                           |   |                               | 13     |   |   | 400 |   |
| 9.95%                    due 2018 through 2020                                                                                                                           |   |                               | 3      |   |   | 100 |   |
| 7.50%                    due 2027 through 2028                                                                                                                           |   |                               | 5      |   |   | 400 |   |
|                                                                                                                                                                     |   |                               | 93     |   |   | 2,720 |   |
| PDVSA                    VI:                                                                                                                                             |   |                               |   |   |   |   |   |
| 8.46%                    notes guaranteed by PDVSA and the stock particiaption in Hovensa,                    due 2004                    to 2009                        |   |                               | 273    |   |   | 334 |   |
| Carried                    forward,                                                                                                                                      |   |                               | 1,498  |   |   | 4,527 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                                                      |   | **December                  31** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                                                      |   | **2004**                         |   | **2003** |   |
| Brought                  forward,                                                                                                                                                         |   |                             | 1,498  |   |   | 4,527 |   |
| PDVSA                  Petróleo:                                                                                                                                                     |   |                             |   |   |   |   |   |
| Variable                  and fixed rate (4.1% to 5.0%) loans guaranteed by governmental                  export                  agencies and financial institutions due 2004 to 2005    |   |                             | 30     |   |   | 92 |   |
| 7.33%                  to 8.03% PDVSA Cerro Negro bonds guaranteed due 2004 to                  2028                                                                                      |   |                             | 264    |   |   | 276 |   |
| Variable                  rate PDVSA Cerro Negro line of credit guaranteed due 2004 to                  2012                                                                              |   |                             | 107    |   |   | 121 |   |
| Variable                  rate PDVSA Sincor loan guaranteed due 2004 to 2012                                                                                                              |   |                             | 384    |   |   | 432 |   |
| Variable                  rate Corpoguanipa lines of credit guaranteed due 2008 to                  2018                                                                                  |   |                             | 287    |   |   | 291 |   |
|                                                                                                                                                                                      |   |                             | 1,072  |   |   | 1,212 |   |
| Bariven,                  S.A. (Bariven):                                                                                                                                                 |   |                             |   |   |   |   |   |
| Variable                  and fixed rate (6.13% to 7.69%) loans guaranteed by governmental                  export                  agencies and financial institutions, due 2004 to 2008 |   |                             | 131    |   |   | 234 |   |
| PDV                  Marina, S.A. (PDV Marina):                                                                                                                                           |   |                             |   |   |   |   |   |
| Variable                  rate (2.81% to 3.66%) letters of credit facility guaranteed due                  2004 to                  2006                                                  |   |                             | 37     |   |   | 87 |   |
| PDVSA                  Corporate:                                                                                                                                                         |   |                             |   |   |   |   |   |
| Variable                  rate libor plus 0.5%, loans guaranteed by governmental export agencies                  and                  financial institutions, due 2008                   |   |                             | 534    |   |   | 600 |   |
| Variable                  and fixed rate (1.70% to 2.30%) loans guaranteed by governmental                  export                  and financial institutions, due 2012 (in Yen)         |   |                             | 388    |   |   | 280 |   |
| Unsecured                  variable rate (LIBOR plus 4.5%) loan facility due 2010                                                                                                         |   |                             | 14     |   |   | 18 |   |
|                                                                                                                                                                                      |   |                             | 936    |   |   | 898 |   |
| Other                  subsidiaries                                                                                                                                                       |   |                             | 46     |   |   | 57 |   |
|                                                                                                                                                                                      |   |                             | 3,720  |   |   | 7,015 |   |
| Less                  current portion of long-term debt                                                                                                                                   |   |                             | 1,004  |   |   | 750 |   |
| Total                  long-term portion                                                                                                                                                  |   |                             | 2,716  |   |   | 6,265 |   |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **Years**                        |   |   |   |
|----------------------------------|--------|--------|--------|
| 2006                             |   |   | 351    |   |
| 2007                             |   |   | 466    |   |
| 2008                             |   |   | 436    |   |
| 2009                             |   |   | 217    |   |
| Remaining                  years |   |   | 1,246  |   |
|                             |   |   | 2,716  |   |

***Covenants***

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Credit        Facilities***

| **(15)** | **Capital                  Stock and Reserves** |
|----------|-------------------------------------------------|

| **(16)** | **Employee                  Benefit Plans** |
|----------|---------------------------------------------|

|                                                       |   | **December                  31** |   |
|------------------------------------------------------------|--------|----------------------------------|--------|
|                                                       |   | **2004**                         |   | **2003** |   |
| Accrual                  for employee termination benefits |   |                             | 182    |   |   | 131 |   |
| Pensions                  plans                            |   |                             | 817    |   |   | 795 |   |
| Other                  postretirement benefits             |   |                             | 1,373  |   |   | 1,245 |   |
|                                                       |   |                             | 2,372  |   |   | 2,171 |   |
| Less                  current portion                      |   |                             | 289    |   |   | 263 |   |
| Long-term                  portion                         |   |                             | 2,083  |   |   | 1,908 |   |

|   | ***(a)*** | ***Defined                  Contribution Savings                  Plans*** |
|--------|-----------|----------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Pension                  Plans and Other Postretirement                  Benefits*** |
|--------|-----------|-----------------------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                          |   | **December                  31**      |   |
|---------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                          |   | **2004**                              |   | **2003** |   | **2004** |   | **2003** |   |
|                                                          |   | **Pension                  benefits** |   | **Other                  postretirement****benefits** |   |
| Venezuela:                                                    |   |                                  |   |   |   |   |   |   |   |
| Change                  in benefit obligation -               |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Benefit                  obligation, beginning of year        |   |                                  | 2,312  |   |   | 2,734 |   |   | 920 |   |   | 1,096 |   |
| Service                  cost                                 |   |                                  | 40     |   |   | 51 |   |   | 23 |   |   | 26 |   |
| Interest                  cost                                |   |                                  | 217    |   |   | 204 |   |   | 90 |   |   | 94 |   |
| Participant                  contributions                    |   |                                  | 7      |   |   | 8 |   |   | - |   |   | - |   |
| Plan                  amendments                              |   |                                  | 295    |   |   | 452 |   |   | - |   |   | - |   |
| Actuarial                  gains                              |   |                                  | (521   | ) |   | (118 | ) |   | 232 |   |   | (32 | ) |
| Benefits                  paid                                |   |                                  | (183   | ) |   | (184 | ) |   | (52 | ) |   | (52 | ) |
| Curtailments                                                  |   |                                  | -      |   |   | (835 | ) |   | - |   |   | (212 | ) |
| Benefit                  obligation, end of year              |   |                                  | 2,167  |   |   | 2,312 |   |   | 1,213 |   |   | 920 |   |
| Change                  in plan assets -                      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of plan assets, beginning of year |   |                                  | 1,620  |   |   | 1,054 |   |   | - |   |   | - |   |
| Actual                  return on plan assets                 |   |                                  | 239    |   |   | 575 |   |   | - |   |   | - |   |
| Employer                  contributions                       |   |                                  | 81     |   |   | 120 |   |   | 52 |   |   | 52 |   |
| Participant                  contributions                    |   |                                  | 7      |   |   | 8 |   |   | - |   |   | - |   |
| Benefits                  paid                                |   |                                  | (145   | ) |   | (137 | ) |   | (52 | ) |   | (52 | ) |
| Fair                  value of plan assets, end of year       |   |                                  | 1,802  |   |   | 1,620 |   |   | - |   |   | - |   |
|                                                          |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Funded                  status                                |   |                                  | (364   | ) |   | (692 | ) |   | (1,213 | ) |   | (920 | ) |
| Employer                  contributions                       |   |                                  | 53     |   |   | 9 |   |   | - |   |   | - |   |
| Benefit                  payments made directly by employer   |   |                                  | 34     |   |   | 32 |   |   | - |   |   | - |   |
| Unrecognized                  net actuarial gain              |   |                                  | (1,583 | ) |   | (1,042 | ) |   | 46 |   |   | (196 | ) |
| Unrecognized                  prior service cost              |   |                                  | 1,240  |   |   | 1,053 |   |   | 165 |   |   | 200 |   |
| Net                  amount recognized                        |   |                                  | (620   | ) |   | (640 | ) |   | (1,002 | ) |   | (916 | ) |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                          |   | **December                  31**      |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                          |   | **2004**                              |   | **2003** |   | **2004** |   | **2003** |   |
|                                                                                                          |   | **Pension                  benefits** |   | **Other                  postretirement****benefits** |   |
| Amounts                  recognized in the Company's consolidated balance sheets consist                  of: |   |                                  |   |   |   |   |   |   |   |
| Accrued                  benefit liability                                                                    |   |                                  | (707   | ) |   | (681 | ) |   | (1,002 | ) |   | (916 | ) |
| Employer                  contributions                                                                       |   |                                  | 53     |   |   | 9 |   |   | - |   |   | - |   |
| Benefit                  payments made directly by employer                                                   |   |                                  | 34     |   |   | 32 |   |   | - |   |   | - |   |
| Net                  amount recognized                                                                        |   |                                  | (620   | ) |   | (640 | ) |   | (1,002 | ) |   | (916 | ) |
| Foreign:                                                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Change                  in benefit obligation -                                                               |   |                                  |        |   |   |  |   |   |  |   |   |  |   |
| Benefit                  obligation, beginning of year                                                        |   |                                  | 516    |   |   | 450 |   |   | 415 |   |   | 334 |   |
| Service                  cost                                                                                 |   |                                  | 23     |   |   | 20 |   |   | 9 |   |   | 9 |   |
| Interest                  cost                                                                                |   |                                  | 32     |   |   | 29 |   |   | 23 |   |   | 22 |   |
| Amendments                                                                                                    |   |                                  | -      |   |   | (8 | ) |   | - |   |   | (4 | ) |
| Actuarial                  loss                                                                               |   |                                  | 35     |   |   | 39 |   |   | (18 | ) |   | 62 |   |
| Plan                  merger/acquisitions                                                                     |   |                                  | -      |   |   | 5 |   |   | - |   |   | - |   |
| Accumulated                  other comprehensive income                                                       |   |                                  | (19    | ) |   | (19 | ) |   | (11 | ) |   | (8 | ) |
| Benefit                  obligation, end of year                                                              |   |                                  | 587    |   |   | 516 |   |   | 418 |   |   | 415 |   |
| Change                  in plan assets -                                                                      |   |                                  |        |   |   |  |   |   |  |   |   |  |   |
| Fair                  value of plan assets, beginning of year                                                 |   |                                  | 343    |   |   | 290 |   |   | 1 |   |   | 1 |   |
| Actual                  return on plan assets                                                                 |   |                                  | 35     |   |   | 59 |   |   | - |   |   | - |   |
| Plan                  merger/acquisitions                                                                     |   |                                  | -      |   |   | 4 |   |   | - |   |   | - |   |
| Employer                  contributions                                                                       |   |                                  | 44     |   |   | 24 |   |   | 11 |   |   | 8 |   |
| Benefits                  paid                                                                                |   |                                  | (24    | ) |   | (34 | ) |   | (11 | ) |   | (8 | ) |
| Fair                  value of plan assets, end of year                                                       |   |                                  | 398    |   |   | 343 |   |   | 1 |   |   | 1 |   |
| Funded                  status                                                                                |   |                                  | (188   | ) |   | (173 | ) |   | (417 | ) |   | (413 | ) |
| Unrecognized                  net actuarial loss                                                              |   |                                  | 120    |   |   | 90 |   |   | 49 |   |   | 87 |   |
| Unrecognized                  prior service cost                                                              |   |                                  | (5     | ) |   | (6 | ) |   | (3 | ) |   | (4 | ) |
| Net                  amount recognized                                                                        |   |                                  | (73    | ) |   | (89 | ) |   | (371 | ) |   | (330 | ) |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                               |   | **December                  31**      |   |
|--------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                                               |   | **2004**                              |   | **2003** |   | **2004** |   | **2003** |   |
|                                                                                                               |   | **Pension                  benefits** |   | **Other                  postretirement****benefits** |   |
| Amounts                  recognized in the Company ́s consolidated balance sheets consist                  of: |   |                                  |   |   |   |   |   |   |   |
| Accrued                  benefit liability                                                                         |   |                                  | (109   | ) |   | (114 | ) |   | (371 | ) |   | (330 | ) |
| Intangible                  asset                                                                                  |   |                                  | 6      |   |   | - |   |   | - |   |   | - |   |
| Accumulated                  other comprehensive income                                                            |   |                                  | 30     |   |   | 25 |   |   | - |   |   | - |   |
| Net                  amount recognized                                                                             |   |                                  | (73    | ) |   | (89 | ) |   | (371 | ) |   | (330 | ) |

|                                                                  |   | **December                  31**      |   |
|-----------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                  |   | **2004**                              |   | **2003** |   | **2002** |   | **2004** |   | **2003** |   | **2002** |   |
|                                                                  |   | **Pension                  benefits** |   | **Other                  postretirement****Benefits** |   |
| Venezuela:                                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Components                  of net periodic benefit (reversal) cost - |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                                         |   |                                  | 40     |   |   | 51 |   |   | 152 |   |   | 23 |   |   | 26 |   |   | 52 |   |
| Interest                  cost                                        |   |                                  | 17     |   |   | 204 |   |   | 414 |   |   | 89 |   |   | 94 |   |   | 143 |   |
| Expected                  return on plan assets                       |   |                                  | (153   | ) |   | (104 | ) |   | (120 | ) |   | - |   |   | - |   |   | - |   |
| Amortization                  of prior service cost                   |   |                                  | 109    |   |   | 87 |   |   | 118 |   |   | 36 |   |   | 44 |   |   | 68 |   |
| Amortization                  of net gain at date of adoption         |   |                                  | -      |   |   | 2 |   |   | 2 |   |   | - |   |   | - |   |   | - |   |
| Recognized                  net actuarial (gain) loss                 |   |                                  | (68    | ) |   | (22 | ) |   | 44 |   |   | (10 | ) |   | (7 | ) |   | 18 |   |
| Curtailments/settlements                                              |   |                                  | (90    | ) |   | (267 | ) |   | - |   |   | - |   |   | 25 |   |   | - |   |
| Net                  periodic benefit (reversal) cost                 |   |                                  | (145   | ) |   | (49 | ) |   | 610 |   |   | 138 |   |   | 182 |   |   | 281 |   |
|                                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Foreign:                                                              |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Components                  of net periodic benefit cost -            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                                         |   |                                  | 23     |   |   | 20 |   |   | 17 |   |   | 9 |   |   | 9 |   |   | 7 |   |
| Interest                  cost                                        |   |                                  | 32     |   |   | 29 |   |   | 28 |   |   | 23 |   |   | 22 |   |   | 19 |   |
| Expected                  return on plan assets                       |   |                                  | (29    | ) |   | (27 | ) |   | (30 | ) |   | - |   |   | - |   |   | - |   |
| Recognized                  net actuarial (gain) loss                 |   |                                  | 3      |   |   | 3 |   |   | - |   |   | 20 |   |   | 50 |   |   | 11 |   |
| Net                  periodic benefit cost                            |   |                                  | 29     |   |   | 25 |   |   | 15 |   |   | 52 |   |   | 81 |   |   | 37 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                             |   | **2004**                              |   | **2003**                                              |   | **2002** |   | **2004** |   | **2003** |   | **2002** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
|                                                                                                                                                             |   | **Pension                  benefits** |   | **Other                  postretirement****Benefits** |   |
|                                                                                                                                                             |   | **%**                                 |   | **%**                                                 |   | **%**    |   | **%**    |   | **%**    |   | **%**    |   |
| Weighted-average                  assumptions used to determine benefit obligations at                  December 31:                                        |   |                                  |   |                                                  |   |     |   |     |   |     |   |     |   |
| Discount                  rate                                                                                                                                   |   |                                  | 10.00  |                                                  |   | 10.00    |   |     | 10.00  |     |   | 10.00    |   |   | 10.00 |   |   | 10.00 |   |
| Rate                  of compensation increase                                                                                                                   |   |                                  | 7.00   |                                                  |   | 7.00     |   |     | 7.00   |     |   | 7.00     |   |   | 7.00 |   |   | 7.00 |   |
| Weighted-average                  assumptions used to determine net periodic benefit cost for the                  year ended                  December 31: |   |                                  |   |                                                  |   |     |   |     |   |     |   |     |   |   |   |   |   |   |   |
| Discount                  rate                                                                                                                                   |   |                                  | 10.00  |                                                  |   | 10.00    |   |     | 10.00  |     |   | 10.00    |   |   | 10.00 |   |   | 10.00 |   |
| Rate                  of compensation increase                                                                                                                   |   |                                  | 7.00   |                                                  |   | 7.00     |   |     | 7.00   |     |   | 7.00     |   |   | 7.00 |   |   | 7.00 |   |
| Expected                  return on plan assets                                                                                                                  |   |                                  | 10.00  |                                                  |   | 10.00    |   |     | 10.00  |     |   | 0.00     |   |   | 0.00 |   |   | 0.00 |   |

|                                                                               |   | **1%                  increase** |   | **1%                  decrease** |   |
|------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------------|--------|
| Increase                  (decrease) in total service and interest cost components |   |                             | 20     |                             |   | (15 | ) |
| Increase                  (decrease) in postretirement benefit obligation          |   |                             | 149    |                             |   | (125 | ) |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                             |   | **2004**                |   | **2003**                                              |   | **2002** |   | **2004** |   | **2003** |   | **2002** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|-------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
|                                                                                                                                                             |   | **Pension****benefits** |   | **Other                  postretirement****benefits** |   |
|                                                                                                                                                             |   | **%**                   |   | **%**                                                 |   | **%**    |   | **%**    |   | **%**    |   | **%**    |   |
| Weighted-average                  assumptions used to determine benefit obligations at                  December 31:                                        |   |                    |   |                                                  |   |     |   |     |   |     |   |     |   |   |   |   |   |   |   |
| Discount                  rate                                                                                                                                   |   |                    | 5.75   |                                                  |   | 6.25     |   |     | 6.75   |     |   | 5.75     |   |   | 6.25 |   |   | 6.75 |   |
| Rate                  of compensation increase                                                                                                                   |   |                    | 4.48   |                                                  |   | 4.46     |   |     | 5.00   |     |   | 4.48     |   |   | - |   |   | - |   |
| Weighted-average                  assumptions used to determine net periodic benefit cost for the                  year ended                  December 31: |   |                    |   |                                                  |   |     |   |     |   |     |   |     |   |   |   |   |   |   |   |
| Discount                  rate                                                                                                                                   |   |                    | 6.25   |                                                  |   | 6.75     |   |     | 7.25   |     |   | 6.25     |   |   | 6.75 |   |   | 7.25 |   |
| Expected                  long-term return on plan assets                                                                                                        |   |                    | 8.25   |                                                  |   | 8.50     |   |     | 9.00   |     |   | 6.00     |   |   | 8.50 |   |   | 9.00 |   |
| Rate                  of compensation increase                                                                                                                   |   |                    | 4.48   |                                                  |   | 5.00     |   |     | 5.00   |     |   | 4.50     |   |   | - |   |   | - |   |

|                                                                               |   | **1%                  increase** |   | **1%                  decrease** |   |
|------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------------|--------|
| Increase                  (decrease) in total service and interest cost components |   |                             | 6      |                             |   | (5 | ) |
| Increase                  (decrease) in postretirement benefit obligation          |   |                             | 71     |                             |   | (57 | ) |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

**Cash        flows**

**(In        millions of        dollars)**

|                                                                                                   |   | **Pension****Benefits** |   | **Other****Benefits** |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|-----------------------|--------|
| For                  Venezuela:                                                                        |   |                    |   |                  |   |   |   |
| Expected                  employer contributions for the year ended December 31,                  2005 |   |                    | 80     |                  |   | 175 |   |
|                                                                                                   |   |                    |   |                  |   |   |   |
| Expected                  employer contributions for the year ended December 31:                       |   |                    |        |                  |   |  |   |
| 2005                                                                                                   |   |                    | 251    |                  |   | 73 |   |
| 2006                                                                                                   |   |                    | 176    |                  |   | 77 |   |
| 2007                                                                                                   |   |                    | 181    |                  |   | 81 |   |
| 2008                                                                                                   |   |                    | 188    |                  |   | 85 |   |
| 2009                                                                                                   |   |                    | 195    |                  |   | 90 |   |
|                                                                                                   |   |                    | 1,102  |                  |   | 536 |   |
| For                  foreign subsidiaries:                                                             |   |                    |   |                  |   |   |   |
| Expected                  employer contributions for the year ended December 31,                  2005 |   |                    | 13     |                  |   | 12 |   |
|                                                                                                   |   |                    |   |                  |   |   |   |
| Expected                  employer contributions for the year ended December 31:                       |   |                    |        |                  |   |  |   |
| 2005                                                                                                   |   |                    | 17     |                  |   | 12 |   |
| 2006                                                                                                   |   |                    | 18     |                  |   | 15 |   |
| 2007                                                                                                   |   |                    | 20     |                  |   | 17 |   |
| 2008                                                                                                   |   |                    | 22     |                  |   | 19 |   |
| 2009                                                                                                   |   |                    | 25     |                  |   | 21 |   |
|                                                                                                   |   |                    | 172    |                  |   | 136 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

**Plan        Assets**

|                                |   | **Target**     |   | **December 31** |   |
|-------------------------------------|--------|----------------|--------|----------------------|--------|
| **Asset                  category** |   | **allocation** |   | **2004**             |   | **2003** |   |
|                                |   | **%**          |   | **%**                |   | **%** |   |
| Equity                              |   | 15-20          |   |                 | 17.00  |   |   | 23.30 |   |
| Fixed                  income       |   | 40-45          |   |                 | 42.00  |   |   | 29.36 |   |
| Cash                                |   | 40-44          |   |                 | 41.00  |   |   | 47.34 |   |
|                                |   |           |        |                 |   | 100.00 |   |   | 100.00 |   |

**Contributions**

|                                |   | **Target**     |   | **December 31** |   |
|-------------------------------------|--------|----------------|--------|----------------------|--------|
| **Asset                  category** |   | **allocation** |   | **2004**             |   | **2003** |   |
|                                |   | **%**          |   | **%**                |   | **%** |   |
| Equity                              |   | 56-66          |   |                 | 63.12  |   |   | 60.20 |   |
| Fixed                  income       |   | 34-44          |   |                 | 36.08  |   |   | 39.20 |   |
| Cash                                |   | 0-5            |   |                 | 0.80   |   |   | 0.60 |   |
|                                |   |           |        |                 |   | 100.00 |   |   | 100.00 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(17)** | **Asset                  Retirement Obligations** |
|----------|---------------------------------------------------|

|                                                                             |   | **December 31** |   |
|----------------------------------------------------------------------------------|--------|----------------------|--------|
|                                                                             |   | **2004**             |   | **2003** |   |
| Accrual                  for asset retirement obligations as of January 1   |   |                 | 537    |   |   | 478 |   |
| Accretion                                                                        |   |                 | 120    |   |   | 57 |   |
| Additions                                                                        |   |                 | 4      |   |   | 3 |   |
| Sales                  and disposals                                             |   |                 | (19    | ) |   | (1 | ) |
| Accrual                  for asset retirement obligations as of December 31 |   |                 | 642    |   |   | 537 |   |
| Property,                  plant and equipment as of January 1              |   |                 | 125    |   |   | 122 |   |
| Additions                                                                        |   |                 | 4      |   |   | 3 |   |
| Sales                  and disposals                                             |   |                 | (32    | ) |   | - |   |
| Property,                  plant and equipment as of December 31            |   |                 | 97     |   |   | 125 |   |
| Accumulated                  depreciation and depletion as of January 1     |   |                 | 60     |   |   | 54 |   |
| Depreciation                  and depletion                                      |   |                 | 3      |   |   | 6 |   |
| Sales                  and disposals                                             |   |                 | (13    | ) |   | - |   |
| Accumulated                  depreciation and depletion as of December 31   |   |                 | 50     |   |   | 60 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(18)** | **Accrued                  and Other Liabilities** |
|----------|----------------------------------------------------|

|                                                                               |   | **December                  31** |   |
|------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                               |   | **2004**                         |   | **2003** |   |
| Withholding                  taxes                                                 |   |                             | 322    |   |   | 258 |   |
| Valued                  added tax (VAT)                                            |   |                             | 363    |   |   | 201 |   |
| Production                  tax payable                                            |   |                             | 702    |   |   | 637 |   |
| Capital                  leases (see note 8)                                       |   |                             | 48     |   |   | 46 |   |
| Provision                  for lawsuits and claims (see note 21)                   |   |                             | 448    |   |   | 380 |   |
| Employees'                  accounts payable                                       |   |                             | 349    |   |   | 134 |   |
| Environmental                  accrual (see note 21)                               |   |                             | 587    |   |   | 473 |   |
| Accrual                  for refining works                                        |   |                             | 61     |   |   | 50 |   |
| Accrual                  for asset retirement obligation (see notes 1-n, 8 and 17) |   |                             | 642    |   |   | 537 |   |
| Interest                  payable                                                  |   |                             | 10     |   |   | 111 |   |
| Dividends                  payable                                                 |   |                             | -      |   |   | 126 |   |
| Long-term                  accounts payable                                        |   |                             | 87     |   |   | 246 |   |
| Accrued                  expenses from foreign affiliates                          |   |                             | 184    |   |   | 91 |   |
| Other                                                                              |   |                             | 272    |   |   | 285 |   |
|                                                                               |   |                             | 4,075  |   |   | 3,575 |   |
| Less                  current portion of accrued and other liabilities             |   |                             | 2,535  |   |   | 2,293 |   |
| Long-term                  portion                                                 |   |                             | 1,540  |   |   | 1,282 |   |

| **(19)** | **Related                  Party Transactions** |
|----------|-------------------------------------------------|

|                                                                           |   | **Years                  ended****December                  31** |   |
|--------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|
|                                                                           |   | **2004**                                                         |   | **2003** |   | **2002** |   |
| Activities                  of the year:                                       |   |                                                             |   |   |   |   |   |   |   |   |
| Sales                                                                          |   |                                                             | 8,506  |   |   | 6,022 |   |   | 6,602 |   |
| Equity                  in earnings of non-consolidated investees (see note 7) |   |                                                             | 1,041  |   |   | 379 |   |   | 268 |   |
| Costs                  and expenses                                            |   |                                                             | 16,819 |   |   | 12,118 |   |   | 6,402 |   |
| Income                  taxes in Venezuela (see note 12-a)                     |   |                                                             | 4,884  |   |   | 1,556 |   |   | 663 |   |
| Social                  development expenses                                   |   |                                                             | 1,242  |   |   | 249 |   |   | - |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                 |   | **December                  31** |   |
|--------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                                 |   | **2004**                         |   | **2003** |   |
| Balances                  at year end:                                               |   |                             |   |   |   |   |   |
| Deposits                  with the BCV, contributions to the FEM (see notes 2 and 4) |   |                             | 705    |   |   | 698 |   |
| Trusts                  in BANDES (see note 4)                                       |   |                             | 2,334  |   |   | 302 |   |
| Accounts                  receivable (see note 5)                                    |   |                             | 532    |   |   | 507 |   |
| Long-term                  accounts receivable and other assets (see note 9)         |   |                             | 727    |   |   | 680 |   |
| Financing                  for social programs and projects (see notes 4 and 9)      |   |                             | 399    |   |   | - |   |
| Investments                  in affiliates (see note 7)                              |   |                             | 3,419  |   |   | 3,072 |   |
| Accounts                  payable to suppliers (see note 11)                         |   |                             | 297    |   |   | 269 |   |
| Accruals                  and other liabilities                                      |   |                             | 1,885  |   |   | 1,313 |   |
| Building                  used by governmental entities (see notes 8 and 9)          |   |                             | 133    |   |   | - |   |
| Income                  taxes payable in Venezuela (see note 12-a)                   |   |                             | 3,387  |   |   | 604 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **Entities**                                  |   | **Delivery****obligation** |   | **Year                  of termination**      |
|-----------------------------------------------|--------|----------------------------|--------|-----------------------------------------------|
| Ruhr                  Oel                     |   | 237                        |   | 2022                                          |
| Nynäs                  Petroleum         |   | 57                         |   | 2005                                          |
| LYONDELL-CITGO                  (see note 21) |   | 230                        |   | 2011                                          |
| Chalmette                  Refining           |   | 90                         |   | Strategic                  association period |
| ConocoPhillips                                |   | 172                        |   | 2020                                          |
| Hovensa                                       |   | 270                        |   | Between                  2008 and 2022        |
| Hamaca                  Marketing Company     |   | 129                        |   | Strategic                  association period |
|                                          |   | 1,185                      |   |                                          |

|                                                                             |   | **Years                  ended December 31** |   |
|----------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                             |   | **2004**                                     |   | **2003** |   |
| Robinson                  I and II Mission                                       |   |                                         | -      |   |   | 72 |   |
| Ribas                  Mission                                                   |   |                                         | 320    |   |   | 32 |   |
| Vuelvan                  Caras Mission                                           |   |                                         | 172    |   |   | - |   |
| Identidad                  Mission                                               |   |                                         | 44     |   |   | - |   |
| Barrio                  Adentro Mission                                          |   |                                         | 275    |   |   | 34 |   |
| Sucre                  Mission                                                   |   |                                         | 113    |   |   | 3 |   |
| Mercal                  Mission                                                  |   |                                         | 146    |   |   | - |   |
| Donations                  to the Community                                      |   |                                         | 133    |   |   | 12 |   |
| Public                  libraries                                                |   |                                         | -      |   |   | 75 |   |
| Development                  expenses incurred by the BANDES trusts (see note 4) |   |                                         | 26     |   |   | - |   |
| Other                                                                            |   |                                         | 13     |   |   | 21 |   |
|                                                                             |   |                                         | 1,242  |   |   | 249 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(20)** | **Operating                  Segments and Geographic                  Data** |
|----------|------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                       |   | **Years                  ended December 31** |    |
|------------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                       |   | **2004**                                     |    | **2003** |   | **2002** |   |
| Revenues:                                                  |   |                                         |    |   |   |   |   |   |   |   |
| Net                  sales of crude oil and products:      |   |                                         |    |   |   |   |   |   |   |   |
| Segments                  in Venezuela:                    |   |                                         |    |   |   |   |   |   |   |   |
| Upstream                  operations                       |   |                                         | 25,798  |   |   | 21,241 |   |   | 18,931 |   |
| Downstream                  operations                     |   |                                         | 42,810  |   |   | 22,026 |   |   | 23,342 |   |
| Petrochemical                  operations                  |   |                                         | 1,421   |   |   | 784 |   |   | 919 |   |
| Segments                  in the United States of America: |   |                                         |    |   |   |   |   |   |   |   |
| Downstream                  operations                     |   |                                         | 32,028  |   |   | 25,217 |   |   | 19,358 |   |
| Other                                                      |   |                                         | 1,255   |   |   | 714 |   |   | 645 |   |
|                                                       |   |                                         | 103,312 |   |   | 69,982 |   |   | 63,195 |   |
| Eliminations                  (1)                          |   |                                         | (39,576 | ) |   | (23,393 | ) |   | (20,615 | ) |
|                                                       |   |                                         | 63,736  |   |   | 46,589 |   |   | 42,580 |   |
| Operating                  income (2):                     |   |                                         |    |   |   |   |   |   |   |   |
| Segments                  in Venezuela:                    |   |                                         |    |   |   |   |   |   |   |   |
| Upstream                  operations                       |   |                                         | 9,031   |   |   | 8,160 |   |   | 4,032 |   |
| Downstream                  operations                     |   |                                         | (2,817  | ) |   | (3,699 | ) |   | (583 | ) |
| Petrochemical                  operations                  |   |                                         | 343     |   |   | 42 |   |   | 265 |   |
| Segments                  in the United States of America: |   |                                         |    |   |   |   |   |   |   |   |
| Downstream                  operations                     |   |                                         | 1,432   |   |   | 762 |   |   | 314 |   |
| Other                                                      |   |                                         | 2,344   |   |   | 670 |   |   | 464 |   |
|                                                       |   |                                         | 10,333  |   |   | 5,935 |   |   | 4,492 |   |
| Eliminations                  (1)                          |   |                                         | 538     |   |   | (497 | ) |   | (985 | ) |
|                                                       |   |                                         | 10,871  |   |   | 5,438 |   |   | 3,507 |   |

|   | (1) | Represents                    the elimination of intersegment                    sales. |
|--------|-----|-----------------------------------------------------------------------------------------|

|   | (2) | Before                    financing expenses, income taxes, minority interests and cumulative                    effect                    of accounting change for asset retirement                    obligations. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                       |   | **Years                  ended December 31** |   |
|------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                       |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Depreciation:                                              |   |                                         |        |   |   |  |   |   |   |   |
| Segments                  in Venezuela:                    |   |                                         |   |   |   |   |   |   |   |   |
| Upstream                  operations                       |   |                                         | 1,591  |   |   | 1,571 |   |   | 1,718 |   |
| Downstream                  operations                     |   |                                         | 626    |   |   | 821 |   |   | 819 |   |
| Petrochemical                  operations                  |   |                                         | 128    |   |   | 126 |   |   | 145 |   |
| Segments                  in the United States of America: |   |                                         |   |   |   |   |   |   |   |   |
| Downstream                  operations                     |   |                                         | 257    |   |   | 263 |   |   | 300 |   |
| Other                                                      |   |                                         | 227    |   |   | 43 |   |   | 56 |   |
|                                                       |   |                                         | 2,829  |   |   | 2,824 |   |   | 3,038 |   |
| Capital                  expenditures, net:                |   |                                         |   |   |   |   |   |   |   |   |
| Segments                  in Venezuela:                    |   |                                         |   |   |   |   |   |   |   |   |
| Upstream                  operations                       |   |                                         | 1,912  |   |   | 1,276 |   |   | 1,316 |   |
| Downstream                  operations                     |   |                                         | 345    |   |   | 237 |   |   | 814 |   |
| Petrochemical                  operations                  |   |                                         | 60     |   |   | 9 |   |   | (172 | ) |
| Segments                  in the United States of America: |   |                                         |   |   |   |   |   |   |   |   |
| Downstream                  operations                     |   |                                         | 246    |   |   | 357 |   |   | 754 |   |
| Other                                                      |   |                                         | 397    |   |   | 90 |   |   | 31 |   |
|                                                       |   |                                         | 2,960  |   |   | 1,969 |   |   | 2,743 |   |
| Property,                  plant and equipment, net:       |   |                                         |   |   |   |   |   |   |   |   |
| Segments                  in Venezuela:                    |   |                                         |   |   |   |   |   |   |   |   |
| Upstream                  operations                       |   |                                         | 20,272 |   |   | 19,951 |   |   | 20,415 |   |
| Downstream                  operations                     |   |                                         | 7,940  |   |   | 8,324 |   |   | 9,024 |   |
| Petrochemical                  operations                  |   |                                         | 1,710  |   |   | 1,808 |   |   | 1,925 |   |
| Segments                  in the United States of America: |   |                                         |   |   |   |   |   |   |   |   |
| Downstream                  operations                     |   |                                         | 3,816  |   |   | 3,833 |   |   | 3,750 |   |
| Other                                                      |   |                                         | 974    |   |   | 804 |   |   | 757 |   |
|                                                       |   |                                         | 34,712 |   |   | 34,720 |   |   | 35,871 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                   |   | **Venezuela** |   | **United****States                  of****America** |   | **Other****Countries                  (3)** |   | **Total** |   |
|----------------------------------------|--------|---------------|--------|-----------------------------------------------------|--------|---------------------------------------------|--------|-----------|--------|
| **December                  31, 2004** |   |          |   |                                                |   |                                        |   |      |   |
| Net                  sales (1)         |   |          | 30,457 |                                                |   | 32,028                                      |   |      | 210    |   |   | 62,695 |   |
| Long-lived                  assets (2) |   |          | 41,436 |                                                |   | 4,766                                       |   |      | 2,064  |   |   | 48,266 |   |
| **December                  31, 2003** |   |          |   |                                                |   |                                        |   |      |   |   |   |   |   |
| Net                  sales (1)         |   |          | 20,659 |                                                |   | 25,216                                      |   |      | 335    |   |   | 46,210 |   |
| Long-lived                  assets (2) |   |          | 36,170 |                                                |   | 5,039                                       |   |      | 2,178  |   |   | 43,387 |   |
| **December                  31, 2002** |   |          |   |                                                |   |                                        |   |      |   |   |   |   |   |
| Net                  sales (1)         |   |          | 22,309 |                                                |   | 19,358                                      |   |      | 645    |   |   | 42,312 |   |
| Long-lived                  assets (2) |   |          | 37,874 |                                                |   | 5,086                                       |   |      | 1,320  |   |   | 44,280 |   |

|   | (1) | Based                  on the country in which the sales                  originate. |
|--------|-----|--------------------------------------------------------------------------------------|

|  | (2) | Based                  on the location of the asset. |
|--|-----|------------------------------------------------------|

|  | (3) | The                  long-lived assets consist primarily of investments in non-consolidated                  investees. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------|

| **(21)** | **Commitments                  and Contingencies** |
|----------|----------------------------------------------------|

***Guarantees        and Other Commitments***

| **Subsidiary/Project**                                         |   | **Guarantee****Obligations** |   | **Year                  of****termination** |
|----------------------------------------------------------------|--------|------------------------------|--------|---------------------------------------------|
| CITGO/affiliates                  and others                   |   | 50                           |   | 2005-2008                                   |
| PDVSA                  Petróleo /Hamaca Project           |   | 291                          |   | 2005                                        |
| PDVSA                  Petróleo /Sincor Project           |   | 16                           |   | 2005                                        |
| PDVSA                  Petróleo / Ministry of Environment |   | 34                           |   | 2006                                        |
| Bariven                  capital expenditures                  |   | 100                          |   | 2006                                        |

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Litigation        and Other Claims***

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Environmental        Compliance and Remediation***

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(22)** | **Effects                  of the Work Stoppage on                  PDVSA** |
|----------|-----------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|     |   | **Export****volumes                  of****crude                  oil****and                  products** |      | **Average****price                  per****barrel                  of****exports** |   |
|----------|--------|----------------------------------------------------------------------------------------------------------|-----------|------------------------------------------------------------------------------------|--------|
| **Year** |   | **(in                  thousands of barrels)**                                                           |      | **(US$ per                  barrel)**                                         |   |
| 2004     |   |                                                                                                     | 880,957   |                                                                               |   | 32.96 |   |
| 2003(*)  |   |                                                                                                     | 760,718   |                                                                               |   | 24.78 |   |
| 2002(*)  |   |                                                                                                     | 870,473   |                                                                               |   | 21.84 |   |
| 2001     |   |                                                                                                     | 1,026,271 |                                                                               |   | 20.14 |   |

| **(23)** | **Subsequent                  Events** |
|----------|----------------------------------------|

|   | ***(a)*** | ***Allocation                  of Funds for Social                  Programs*** |
|--------|-----------|---------------------------------------------------------------------------------|

|   | · | On                  April 12, 2005, the Board of Directors of CVP approved the establishment                  of a trust between CVP, BANDES and Fondo de Desarrollo Agropecuario,                  Pesquero, Forestal y Afines (FONDAFA), to execute projects and                  programs of                  the Bolivarian missions and other social projects established through                  agreements with designated public organizations. This trust fund                  was                  established with an initial contribution of $30 million, with a                  duration                  of one year, renewable automatically for similar periods. During                  2005,                  PDVSA transferred $72 million to this                  trust. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | · | On                  April 26, 2005, the Board of Directors of CVP approved the establishment                  of a trust between CVP, BANDES y FONDAFA to finance the cooperatives                  of                  the Vuelvan Caras Mission, established through agreements with                  designated                  public organizations. This trust, was established with contributions                  of                  $88 million, with a duration of one year, renewable automatically                  for                  similar periods. During 2005, PDVSA transferred $88 million to                  this                  trust. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  June 21, 2005, the Board of Directors of CVP approved the creation                  of a                  trust between CVP and BANDES in order to finance Sustainable Development                  Projects to be executed in the east and west of the Country through                  agreements to be signed with the designated public entities. This                  trust                  was incorporated with an initial contribution of $611 thousand                  and will                  have a duration of one year, extendable automatically for equal                  periods.                  During 2005, PDVSA transferred $5 million to this                  trust. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  July 26, 2005, the Board of Directors of CVP approved the establishment                  of                  a trust between CVP and BANDES to execute programs and projects for                  the Sowing and Production Plan 2005, through agreements with designated                  public organizations. This trust was established with an initial                  contribution of $70 million with a duration of one year, renewable                  automatically for similar periods. During 2005, PDVSA transferred                  $326                  million to this trust. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  October 8, 2005, CVP’s Board of Directors approved the incorporation of a                  trust between CVP and the Banco del Tesoro, Banco Universal in                  order to                  finance the operations of the Empresas de Producción Social (EPS) (social                  production companies), by means of loans recoverable under special                  conditions to finance infrastructure projects, acquisition of capital                  goods, access to technology, obtaining qualified resources and                  training                  until achieving economic autonomy and improving their operating                  efficiency. This will allow them to fulfill their obligations with                  the                  trust in order to guarantee the financing of other EPS’s. This trust was                  incorporated with an initial contribution of $100 million and will                  have a                  one-year duration, extendable automatically for equal periods.                  During                  2005, PDVSA transferred $100 million to this                  trust. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  January 13, 2006, the agreement for the incorporation of a trust                  between                  CVP and Banfoandes, Banco Universal, C. A., was approved by the                  Board of                  Directors of CVP on January 10, 2006, for the creation of the                  Investigation, Development and Innovation Fund, as an economic                  support                  mechanism, not reimbursable, addressed to entrepreneurs, inventors,                  associations, micro, small and middle sized companies and the networks                  of                  productive innovation, which will carry out the development phases                  of                  prototypes and short research and development (R&D) projects. This                  trust was incorporated with an initial contribution of $50 million                  and                  with a one-year duration, extendable automatically for equal                  periods. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  March 7, 2006, an agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP for the implementation                  of                  Ciencia Mission. This trust was incorporated with an initial contribution                  of $438 million, dated August 25, 2006, and it was decided to reduce                  the                  trust amount to $230 million and, the remaining amount was reserved                  for                  other social programs upon authorization of the National Government.                  This                  trust will have a one-year duration, extendable automatically for                  equal                  periods. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | · | On                  March 13, 2006, the agreement for the incorporation of a trust                  was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on March 7, 2006, for                  execution                  of the Plan Vialidad 2006. This trust will be incorporated with                  an initial                  contribution of $47 million, with a one-year duration, extendable                  automatically for equal periods. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 7, 2006, the agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on October 8, 2005, for                  the                  creation of a Social Fund for health, education, housing and contributions                  to the communities in a state of extreme social exclusion, and                  other                  social plans and projects presented in the social offers by PDVSA’s                  contractors. This trust will be incorporated with an initial contribution                  of $465 million with a one-year duration, extendable automatically                  for                  equal periods. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 7, 2006, the agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on March 13, 2006, for                  the                  creation of the Fondo Social Fronterizo, in order to make the necessary                  payments to finance social projects for education, health, water                  supply,                  among others, to be carried out in frontier areas. This trust will                  be                  incorporated with an initial contribution of $595 thousand with                  a one-year                  duration, extendable automatically for equal                  periods. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  April 28, 2006, the agreement for the incorporation of a trust                  was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on April 18, 2006, for                  the                  execution of works in the electrical sector nationwide, to support                  the                  Barrio Adentro II Mission. This trust will be incorporated with                  an initial                  contribution of $9 million with a one-year duration, extendable                  automatically for equal periods. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                  May 24, 2006, the agreement for the incorporation of a trust was                  subscribed between CVP and Banco del Tesoro, C.A., Banco Universal,                  and                  approved by the Board of Directors of CVP on May 23, 2006, for                  the                  creation of the Fondo de Garantías Nacionales, to guarantee individual                  credits, as well as loan portfolios relating to projects in the                  agricultural, industrial, services, mining technology and                  telecommunications sectors, among others. This trust will be created                  with                  an initial contribution of $50 million with a one-year duration,                  extendable automatically for equal                  periods. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(b)*** | ***Foreign                  Exchange Regime*** |
|--------|-----------|------------------------------------------------|

|   | ***(c)*** | ***Benefits                  to Workers*** |
|--------|-----------|--------------------------------------------|

|   | ***(d)*** | ***Transfer                  of Subsidiary to Governmental                  Entities*** |
|--------|-----------|-----------------------------------------------------------------------------------------|

|                                                        |   | **December                  31** |   |
|-------------------------------------------------------------|--------|----------------------------------|--------|
|                                                        |   | **2004**                         |   | **2003** |   |
| Total                  assets of Pequiven                   |   |                             | 3,077  |   |   | 2,835 |   |
| Total                  assets of PDVSA                      |   |                             | 60,282 |   |   | 55,935 |   |
| Pequiven                  assets as a % of PDVSA assets     |   |                             | 5      | %    |   | 5 | % |
|                                                        |   |                             |   |   |   |   |   |
| Total                  revenues of Pequiven                 |   |                             | 1,447  |   |   | 833 |   |
| Total                  revenues of PDVSA                    |   |                             | 64,757 |   |   | 46,589 |   |
| Pequiven                  revenues as a % of PDVSA revenues |   |                             | 2      | % |   | 2 | % |

|   | ***(e)*** | ***New                  Subsidiaries of PDVSA*** |
|--------|-----------|--------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(f)*** | ***Energy                  Agreements*** |
|--------|-----------|------------------------------------------|

**Caracas        Energy Agreement with the Oriental Republic of Uruguay**

|   | ***(g)*** | ***New                  Central Bank Law*** |
|--------|-----------|---------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(h)*** | ***Purchase                  of CITGO’s Debt*** |
|--------|-----------|-------------------------------------------------------|

|   | § | All                  of its outstanding 11.375% senior notes due                  2011; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | § | All                  of its outstanding 9.30% private placement senior notes due 2006;                  and |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | § | All                  of its outstanding master shelf agreement senior notes due 2006                  through                  2009 with interest rates ranging from 7.17% to                  8.94%. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.875%                    Senior notes due 2006                             |   |   | 136 |   |
|-----------------------------------------------------------------------------|--------|--------|-----|--------|
| 6%                    Senior notes due 2011                                 |   |   | 250 |   |
| 11.375%                    Senior notes due 2011                            |   |   | 7   |   |
| 9.30%                    Privide placement Senior notes due 2006            |   |   | 23  |   |
| 7.17%                    to 8.95% Senior notes under master shelf agreement |   |   | 165 |   |
|                                                                        |   |   | 581 |   |

|   | ***(i)*** | ***Migration                  of Operating Agreements to Empresas Mixtas (Joint stock contractual                  structure between PDVSA and third party                  companies)*** |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(j)*** | ***Recently                  Issued Accounting                  Standards*** |
|--------|-----------|------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(k)*** | ***Legal                  Actions Against PDVSA and                  Subsidiaries*** |
|--------|-----------|--------------------------------------------------------------------------------------|

|   | § | In                  September 2005, the Company New Brunswick Power Corporation (“NB Power”)                  introduced a lawsuit in a Canadian Court and an arbitration request                  to the                  International Council for Dispute Resolution of the American Arbitration                  Association of New York against PDVSA, BITOR and the Bolivarian                  Republic                  of Venezuela, alleging among other things, the failure to comply                  with an                  Orimulsión® supply contract. The Company claims indemnification for $1,800                  million. Management and their legal counsel state that such contract                  was                  never signed, that all obligations have been satisfied and they                  have                  substantially responded to the claim asserted and that they intend                  to                  contest the claim vigorously. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | On                  February 16, 2006, the Political Administrative division of the                  Supreme                  Court of Justice declared without merit the appeal filed by PDVSA                  Petróleo                  against a SENIAT resolution dated November 17, 1999. In accordance                  with                  this ruling, PDVSA Petróleo is liable for $839 million for tax obligations                  and penalties corresponding to 1994, 1995 and 1996. Management                  and its                  legal counsel believe that the above decision violates fundamental                  constitutional rights and the Company will request a new trial                  before that                  constitutional division of The Supreme Court of Justice, together                  with a                  preventive measure in order to suspend immediately its effects. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | In                  November 2005, the appeal presented by an American Company to the                  federal                  District court of Denver in connection with a legal action filed                  against                  PDVSA, PDVSA Petróleo and CITGO, was withdrawn. The plaintiff alleged that                  PDVSA interrupted and otherwise interfered with its ability to                  develop and                  market Grenada’s oil and natural gas. The court’s decision of September                  30, 2004 which announced a decision favorable to PDVSA was upheld                  (see                  note 21). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | In                  relation to the arbitration process against PDVSA Petróleo (see note 21),                  in February 2006 the Company was notified of the arbitration court’s                  decision declaring overruled all of the plaintiff’s demands, instructing                  the plaintiff to pay PDVSA Petróleo all arbitration costs, relating to the                  dispute for the alleged contract violation for the sale and purchase                  of                  low octane gasoline. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***(l)*** | ***Payments                  of Dividends*** |
|--------|-----------|----------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(m)*** | ***Redemption                  of PDVSA Finance’s Public                  Debt*** |
|--------|-----------|-----------------------------------------------------------------------------------------|

|   | ***(n)*** | ***CERTs*** |
|--------|-----------|-------------|

|   | ***(o)*** | ***Trans-Caribbean                  Gas Pipeline Antonio Ricaurte                  Project*** |
|--------|-----------|-----------------------------------------------------------------------------------------------|

|   | ***(p)*** | ***Bank                  Debit Tax*** |
|--------|-----------|---------------------------------------|

|   | ***(q)*** | ***Amendment                  to the Income Tax Law*** |
|--------|-----------|--------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(r)*** | ***Partial                  Amendment Law of the Organic Hydrocarbons                  Law*** |
|--------|-----------|-----------------------------------------------------------------------------------------------|

|   | § | Extraction                  Tax, at a fixed rate of one third of the value of all liquid hydrocarbons                  extracted from any well, calculated on the same basis established                  in the                  Law for calculation of the royalty. In calculating this tax, the                  taxpayer                  will be able to deduct the amount paid for royalty, including the                  additional royalty being paid as special                  advantage. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Export                  Registration Tax, at a rate of one in a thousand of the value of                  all                  hydrocarbons exported from any port in the national territory,                  calculated                  on the sales price of such                  hydrocarbons. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ***(s)*** | ***Sale                  of LYONDELL-CITGO*** |
|--------|-----------|-----------------------------------------------|

|   | ***(t)*** | ***Corpus                  Christi Indictment*** |
|--------|-----------|--------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | ***(u)*** | ***Lake                  Charles Heavy Rainfall                  Event*** |
|--------|-----------|---------------------------------------------------------------------------|

|   | ***(v)*** | ***Value                  Added Tax (VAT)*** |
|--------|-----------|----------------------------------------------|

|   | ***(w)*** | ***Trusts                  in BANDES*** |
|--------|-----------|-----------------------------------------|

|   | ***(x)*** | ***Production                  Tax*** |
|--------|-----------|---------------------------------------|

|   | ***(y)*** | ***Cases                  Under Internal Audit                  Review*** |
|--------|-----------|---------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

| **(24)** | **Supplementary                  Information on Oil and Gas Exploration and Production Activities                  (Unaudited)** |
|----------|----------------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Table        I - Crude Oil and Natural Gas Reserves***

|   | **(a)** | **Conventional                  and Extra-heavy Crude Oil Reserves (in millions of                  barrels):** |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                        |   | **Years                  ended December 31** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                                                        |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Proved                  developed and undeveloped reserves of light, medium and heavy crude                  oil at                  January 1              |   |                                         | 41,954 |   |   | 41,776 |   |   | 42,225 |   |
| Revisions                                                                                                                                                   |   |                                         | 285    |   |   | 589 |   |   | 238 |   |
| Extensions                  and new discoveries                                                                                                             |   |                                         | 574    |   |   | 433 |   |   | 238 |   |
| Production                                                                                                                                                  |   |                                         | (921   | ) |   | (844 | ) |   | (925 | ) |
| Proved                  developed and undeveloped reserves of light, medium and heavy crude                  oil at                  December 31            |   |                                         | 41,892 |   |   | 41,954 |   |   | 41,776 |   |
| Proved                  developed and undeveloped reserves of extra- heavy crude oil at                  December                  31                       |   |                                         | 38,690 |   |   | 35,186 |   |   | 35,381 |   |
| Total                  proved developed and undeveloped reserves at December 31                                                                             |   |                                         | 80,582 |   |   | 77,140 |   |   | 77,157 |   |
|                                                                                                                                                        |   |                                         |   |   |   |   |   |   |   |   |
| Total                  proved developed reserves, submitted to production, including extra-heavy                  crude oil at December 31 (included above) |   |                                         | 17,275 |   |   | 16,288 |   |   | 15,699 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                         |   | **Years                  ended December 31** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                                         |   | **2004**                                     |   | **2003** |   | **2002** |   |
|                                                                                                                                         |   | **Projects**                                 |   | **Total****including****projects** |   | **Projects** |   | **Total****including****projects** |   | **Projects** |   | **Total****including****projects** |   |
| Proved                  developed and undeveloped reserves of extra-heavy crude oil at                  January                  1           |   |                                         | 10,483 |   |   | 35,186 |   |   | 10,639 |   |   | 35,381 |   |   | 10,768 |   |   | 35,558 |   |
| Revisions                  (1)                                                                                                               |   |                                         | 2,801  |   |   | 3,740 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Development                  and new discoveries                                                                                             |   |                                         | -      |   |   | 3 |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Production                                                                                                                                   |   |                                         | (190   | ) |   | (239 | ) |   | (156 | ) |   | (195 | ) |   | (129 | ) |   | (177 | ) |
| Proved                  developed and undeveloped reserves of extra-heavy crude oil at                  December                  31         |   |                                         | 13,094 |   |   | 38,690 |   |   | 10,483 |   |   | 35,186 |   |   | 10,639 |   |   | 35,381 |   |
| Proved                  developed extra-heavy crude oil reserves at December 31                                                              |   |                                         | 1,926  |   |   | 4,076 |   |   | 1,751 |   |   | 3,010 |   |   | 1,273 |   |   | 2,154 |   |
| Net                  proved extra-heavy crude oil reserves in unincorporated joint ventures                  at                  December 31 |   |                                         | 10,572 |   |   |   |   |   | 7,916 |   |   |   |   |   | 8,224 |   |   |   |   |
| Net                  proved extra-heavy crude oil reserves in equity affiliate at December                  31                  (2)          |   |                                         | 2,522  |   |   |   |   |   | 2,567 |   |   |   |   |   | 2,415 |   |   |   |   |
|                                                                                                                                         |   |                                         | 13,094 |   |   |   |   |   | 10,483 |   |   |   |   |   | 10,639 |   |   |   |   |

|   | (1) | Includes                  transfers from unassigned areas. |
|--------|-----|------------------------------------------------------------|

|   | (2) | Represents                  PDVSA’s equity share of the Petrozuata extra-heavy oil joint                  venture. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------|

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|   | **(b)** | **Natural                  Gas Reserves:** |
|--------|---------|--------------------------------------------|

|                                                                                                                                                                                                                                 |   | **2004**                                          |    | **2003** |   | **2002** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|----------|--------|----------|--------|
|                                                                                                                                                                                                                                 |   | **Billions                  of cubic feet (BCF)** |    |
| Proved                  developed and undeveloped reserves of natural gas at January                  1                                                                                                                              |   |                                              | 137,616 |     |   | 134,655  |   |   | 135,819 |   |
| Revisions                                                                                                                                                                                                                            |   |                                              | 645     |     |   | 2,358    |   |   | 468 |   |
| Extensions                  and new discoveries                                                                                                                                                                                      |   |                                              | 936     |     |   | 1,984    |   |   | - |   |
| Production                                                                                                                                                                                                                           |   |                                              | (1,367  | )        |   | (1,381   | )      |   | (1,632 | ) |
| Proved                  developed and undeveloped reserves of natural gas at December                  31                                                                                                                            |   |                                              | 137,830 |     |   | 137,616  |   |   | 134,655 |   |
| Proved                  reserves related to extra-heavy crude reserves at December                  31                                                                                                                               |   |                                              | 13,649  |     |   | 12,427   |   |   | 12,454 |   |
| Total                  proved developed and undeveloped reserves at December 31                                                                                                                                                      |   |                                              | 151,479 |     |   | 150,043  |   |   | 147,109 |   |
| Total                  proved developed reserves of natural gas, submitted to production,                  including quantities associated with extra-heavy crude oil in production                  at December 31 (included above) |   |                                              | 106,035 |     |   | 105,030  |   |   | 102,191 |   |

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**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Table        II - Costs Incurred in Exploration and Development        Activities***

|                                  |   |  **2004**                     |   | **2003**                                                      |   | **2002**  |      |
|---------------------------------------|--------|------------------------------------|--------|---------------------------------------------------------------|--------|-----------|-----------|
|                                  |   |  **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |      | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   |
|                                  |   |                               |   |                                                          |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration                  costs    |   |                               | 60     |                                                          |   | -         |      |   | 60 |   |   | 27 |   |   | - |   |   | 27 |   |   | 133 |   |   | - |   |   | 133 |   |
|                                  |   |                               |   |                                                          |   |      |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Development                  costs    |   |                               | 1,863  |                                                          |   | 341       | (2)  |   | 2,204 |   |   | 629 |   |   | 250 | (2)  |   | 879 |   |   | 1,434 |   |   | 510 | (2)  |   | 1,944 |   |
| Total                                 |   |                               | 1,923  |                                                          |   | 341       |      |   | 2,264 |   |   | 656 |   |   | 250 |   |   | 906 |   |   | 1,567 |   |   | 510 |   |   | 2,077 |   |
| Equity                  affiliate (1) |   |                               | -      |                                                          |   | 24        |      |   | 24 |   |   | - |   |   | 13 |   |   | 13 |   |   | - |   |   | (19 | ) |   | (19 | ) |
| Total                                 |   |                               | 1,923  |                                                          |   | 365       |      |   | 2,288 |   |   | 656 |   |   | 263 |   |   | 919 |   |   | 1,567 |   |   | 491 |   |   | 2,058 |   |

|  | (1) | Represents                  PDVSA’s equity share of the Petrozuata extra-heavy oil joint                  venture. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Represents                  PDVSA’s proportional share in unincorporated extra-heavy oil joint                  venture. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Table        III - Capitalized Costs Relating to Oil and Gas Producing        Activities***

|                                                    |   | **2004**                     |    | **2003**                                                      |   | **2002**  |   |
|---------------------------------------------------------|--------|------------------------------|---------|---------------------------------------------------------------|--------|-----------|--------|
|                                                    |   | **Conventional****reserves** |    | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   |
| Producing                  assets (1)                   |   |                         | 30,933  |                                                          |   | 3,475     |   |   | 34,408 |   |   | 30,111 |   |   | 2,788 |   |   | 32,899 |   |   | 32,486 |   |   | 2,638 |   |   | 35,124 |   |
| Support                  facilities                     |   |                         | 16,876  |                                                          |   | 71        |   |   | 16,947 |   |   | 16,204 |   |   | 57 |   |   | 16,261 |   |   | 12,681 |   |   | 16 |   |   | 12,697 |   |
| Total                                                   |   |                         | 47,809  |                                                          |   | 3,546     |   |   | 51,355 |   |   | 46,315 |   |   | 2,845 |   |   | 49,160 |   |   | 45,167 |   |   | 2,654 |   |   | 47,821 |   |
| Accumulated                  depreciation and depletion |   |                         | (30,422 | )                                                             |   | (618      | )      |   | (31,040 | ) |   | (28,940 | ) |   | (419 | ) |   | (29,359 | ) |   | (26,625 | ) |   | (239 | ) |   | (26,864 | ) |
| Construction                  in progress               |   |                         | 2,538   |                                                          |   | 272       |   |   | 2,810 |   |   | 2,027 |   |   | 632 |   |   | 2,659 |   |   | 2,546 |   |   | 573 |   |   | 3,119 |   |
| Net                  capitalized costs                  |   |                         | 19,925  |                                                          |   | 3,200     |   |   | 23,125 |   |   | 19,402 |   |   | 3,058 |   |   | 22,460 |   |   | 21,088 |   |   | 2,988 |   |   | 24,076 |   |
|                                                    |   |                         |    |                                                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  affiliate (2)                   |   |                         | -       |                                                          |   | 1,412     |   |   | 1,412 |   |   | - |   |   | 1,388 |   |   | 1,388 |   |   | - |   |   | 1,375 |   |   | 1,375 |   |
| Total                                                   |   |                         | 19,925  |                                                          |   | 4,612     |   |   | 24,537 |   |   | 19,402 |   |   | 4,446 |   |   | 23,848 |   |   | 21,088 |   |   | 4,363 |   |   | 25,451 |   |

|   | (1) | Includes                  land of $137 million, $135 million and $139 million at December                  31, 2004,                  2003 and 2002, respectively. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Represents                  PDVSA’s share of the Petrozuata extra heavy oil joint                  venture. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Table        IV - Results of Operations for Oil and Gas Producing Activities for Each        Year        (expressed in millions of dollars):***

|                                                |   | **2004**                     |   | **2003**                                                      |   | **2002**  |   |
|-----------------------------------------------------|--------|------------------------------|--------|---------------------------------------------------------------|--------|-----------|--------|
|                                                |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   |
| Revenues                  from production:          |   |                         |   |                                                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                                               |   |                         | 26,032 |                                                          |   | 1,480     |   |   | 27,512 |   |   | 14,759 |   |   | 981 |   |   | 15,740 |   |   | 13,479 |   |   | 633 |   |   | 14,112 |   |
| Transfers                                           |   |                         | 7,080  |                                                          |   | -         |   |   | 7,080 |   |   | 7,619 |   |   | - |   |   | 7,619 |   |   | 8,322 |   |   | - |   |   | 8,322 |   |
| Production                  costs                   |   |                         | (6,683 | )                                                             |   | (298      | )      |   | (6,981 | ) |   | (4,306 | ) |   | (154 | ) |   | (4,460 | ) |   | (4,824 | ) |   | (135 | ) |   | (4,959 | ) |
| Production                  tax                     |   |                         | (9,012 | )                                                             |   | (117      | )      |   | (9,129 | ) |   | (6,267 | ) |   | (31 | ) |   | (6,298 | ) |   | (5,642 | ) |   | (17 | ) |   | (5,659 | ) |
| Depreciation                  and depletion         |   |                         | (1,681 | )                                                             |   | (200      | )      |   | (1,881 | ) |   | (1,665 | ) |   | (177 | ) |   | (1,842 | ) |   | (1,882 | ) |   | (165 | ) |   | (2,047 | ) |
| Exploration                  costs                  |   |                         | (60    | )                                                             |   | -         |   |   | (60 | ) |   | (27 | ) |   | - |   |   | (27 | ) |   | (133 | ) |   | - |   |   | (133 | ) |
|                                                |   |                         |   |                                                          |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Results                  before income taxes        |   |                         | 15,676 |                                                          |   | 865       |   |   | 16,541 |   |   | 10,113 |   |   | 619 |   |   | 10,732 |   |   | 9,320 |   |   | 316 |   |   | 9,636 |   |
| Income                  tax                         |   |                         | (7,668 | )                                                             |   | (253      | )      |   | (7,921 | ) |   | (4,926 | ) |   | (79 | ) |   | (5,005 | ) |   | (4,494 | ) |   | (17 | ) |   | (4,511 | ) |
| Results                  from production operations |   |                         | 8,008  |                                                          |   | 612       |   |   | 8,620 |   |   | 5,187 |   |   | 540 |   |   | 5,727 |   |   | 4,826 |   |   | 299 |   |   | 5,125 |   |
| Equity                  affiliate (1)               |   |                         | -      |                                                          |   | 274       |   |   | 274 |   |   | - |   |   | 125 |   |   | 125 |   |   | - |   |   | 213 |   |   | 213 |   |
| Total                                               |   |                         | 8,008  |                                                          |   | 886       |   |   | 8,894 |   |   | 5,187 |   |   | 665 |   |   | 5,852 |   |   | 4,826 |   |   | 512 |   |   | 5,338 |   |

|   | (1) | Represents                  PDVSA’s equity share of the Petrozuata extra-heavy oil joint                  venture. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                     |   | **Years                  ended December 31** |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                                                                     |   | **2004**                                     |   | **2003** |   | **2002** |   |
| Averages                  sales price:                                                                                   |   |                                         |   |   |   |   |   |   |   |   |
| Crude                  oil, per barrel                                                                                   |   |                                         | 32.22  |   |   | 24.35 |   |   | 21.19 |   |
| Natural                  gas liquids, per barrel                                                                         |   |                                         | 15.37  |   |   | 18.84 |   |   | 17.65 |   |
| Natural                  gas, per barrel                                                                                 |   |                                         | 4.29   |   |   | 3.20 |   |   | 4.34 |   |
| Averages                  production costs, per barrel of oil equivalent                                                 |   |                                         | 3.77   |   |   | 3.85 |   |   | 3.92 |   |
| Average                  production costs, per barrel of oil equivalent, excluding operating                  agreements |   |                                         | 3.29   |   |   | 2.06 |   |   | 2.42 |   |

***Table        V - Standardized Measure of Discounted Future Net Cash Flows Related to Proved        Oil and Gas Reserves***

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

|                                                                                                                                                   |   | **2004**                     |      | **2003**                                                      |   | **2002**  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|---------------------------------------------------------------|--------|-----------|--------|
|                                                                                                                                                   |   | **Conventional****reserves** |      | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                  oil****reserves** |   | **Total** |   |
| Future                  cash inflows                                                                                                                   |   |                         | 1,602,527 |                                                          |   | 116,109   |   |   | 1,718,636 |   |   | 1,182,623 |   |   | 78,217 |   |   | 1,260,840 |   |   | 1,091,423 |   |   | 64,524 |   |   | 1,155,947 |   |
| Future                  production costs                                                                                                               |   |                         | (194,732  | )                                                             |   | (14,900   | )      |   | (209,632 | ) |   | (152,471 | ) |   | (11,227 | ) |   | (163,698 | ) |   | (212,869 | ) |   | (10,018 | ) |   | (222,887 | ) |
| Future                  production taxes                                                                                                               |   |                         | (434,972  | )                                                             |   | (19,355   | )      |   | (454,327 | ) |   | (336,354 | ) |   | (12,007 | ) |   | (348,361 | ) |   | (308,413 | ) |   | (9,156 | ) |   | (317,569 | ) |
| Future                  development costs                                                                                                              |   |                         | (83,520   | )                                                             |   | (9,217    | )      |   | (92,737 | ) |   | (54,726 | ) |   | (6,196 | ) |   | (60,922 | ) |   | (74,130 | ) |   | (4,952 | ) |   | (79,082 | ) |
| Future                  income tax expense                                                                                                             |   |                         | (414,624  | )                                                             |   | (23,037   | )      |   | (437,661 | ) |   | (286,707 | ) |   | (14,668 | ) |   | (301,375 | ) |   | (220,483 | ) |   | (11,322 | ) |   | (231,805 | ) |
| Cost                  of assets retirements                                                                                                            |   |                         | (3,082    | )                                                             |   | -         |   |   | (3,082 | ) |   | (2,596 | ) |   | - |   |   | (2,596 | ) |   | - |   |   | - |   |   | - |   |
| Future                  net cash flows                                                                                                                 |   |                         | 471,597   |                                                          |   | 49,600    |   |   | 521,197 |   |   | 349,769 |   |   | 34,119 |   |   | 383,888 |   |   | 275,528 |   |   | 29,076 |   |   | 304,604 |   |
| Effect                  of discounting net cash flows at 10% (12% at December 31, 2003                  and 10% at                  December 31, 2002) |   |                         | (378,043  | )                                                             |   | (42,435   | )      |   | (420,478 | ) |   | (285,354 | ) |   | (27,830 | ) |   | (313,184 | ) |   | (223,588 | ) |   | (23,643 | ) |   | (247,231 | ) |
| Discounted                  future net cash flows                                                                                                      |   |                         | 93,554    |                                                          |   | 7,165     |   |   | 100,719 |   |   | 64,415 |   |   | 6,289 |   |   | 70,704 |   |   | 51,940 |   |   | 5,433 |   |   | 57,373 |   |
| Equity                  affiliate (1)                                                                                                                  |   |                         | -         |                                                          |   | 2,581     |   |   | 2,581 |   |   | - |   |   | 1,629 |   |   | 1,629 |   |   | - |   |   | 2,064 |   |   | 2,064 |   |
| Total                                                                                                                                                  |   |                         | 93,554    |                                                          |   | 9,746     |   |   | 103,300 |   |   | 64,415 |   |   | 7,918 |   |   | 72,333 |   |   | 51,940 |   |   | 7,497 |   |   | 59,437 |   |

|   | (1) | Represents                  PDVSA’s equity share of the Petrozuata                  extra-heavy oil joint venture. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------|

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*Table              of Contents*

**PETRÓLEOS        DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)**

***Table        VI - Analysis of Changes in the Standardized Measure of Discounted Future        Net        Cash Flows Related to Proved Crude Oil and Natural Gas        Reserves***

|                                                                                                            |   | **2004**                     |    | **2003**                                                        |   | **2002**  |   |
|-----------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|-----------------------------------------------------------------|--------|-----------|--------|
|                                                                                                            |   | **Conventional****reserves** |    | **Extra-****heavy****crude                    oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                    oil****reserves** |   | **Total** |   | **Conventional****reserves** |   | **Extra-****heavy****crude                    oil****reserves** |   | **Total** |   |
| Present                    value at January 1,                                                                  |   |                         |    |                                                            |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales,                    net of production costs and taxes                                                     |   |                         | (17,894 | )                                                               |   | (395      | )      |   | (18,289 | ) |   | (11,812 | ) |   | (509 | ) |   | (12,321 | ) |   | (12,762 | ) |   | (63 | ) |   | (12,825 | ) |
| Value                    of reserves added during the year due to extensions and                    discoveries |   |                         | 1,256   |                                                            |   | -         |   |   | 1,256 |   |   | 451 |   |   | - |   |   | 451 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                            |   |                         | (16,638 | )                                                               |   | (395      | )      |   | (17,033 | ) |   | (11,361 | ) |   | (509 | ) |   | (11,870 | ) |   | (12,762 | ) |   | (63 | ) |   | (12,825 | ) |
| Change                    in value of previous year reserves due to:                                            |   |                         |    |                                                            |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Development                    costs incurred during the year                                                   |   |                         | 1,863   |                                                            |   | 341       |   |   | 2,204 |   |   | 629 |   |   | 250 |   |   | 879 |   |   | - |   |   | - |   |   | - |   |
| Change                    in future development costs                                                           |   |                         | 6,293   |                                                            |   | 26        |   |   | 6,319 |   |   | (3,480 | ) |   | (91 | ) |   | (3,571 | ) |   | 13,994 |   |   | - |   |   | 13,994 |   |
| Net                    changes in prices and production costs                                                   |   |                         | 83,073  |                                                            |   | (66       | )      |   | 83,007 |   |   | 24,078 |   |   | 1,819 |   |   | 25,897 |   |   | 23,943 |   |   | (4 | ) |   | 23,939 |   |
| Revisions                    of previous reserve estimates                                                      |   |                         | 4,471   |                                                            |   | -         |   |   | 4,471 |   |   | 4,429 |   |   | 6 |   |   | 4,435 |   |   | (3,215 | ) |   | (1 | ) |   | (3,216 | ) |
| Net                    changes in income taxes                                                                  |   |                         | (25,615 | )                                                               |   | (20       | )      |   | (25,635 | ) |   | (12,196 | ) |   | 5 |   |   | (12,191 | ) |   | (8,301 | ) |   | - |   |   | (8,301 | ) |
| Net                    changes in production rates and other                                                    |   |                         | (24,309 | )                                                               |   | 990       |   |   | (23,319 | ) |   | 10,376 |   |   | (624 | ) |   | 9,752 |   |   | (2,994 | ) |   | 70 |   |   | (2,924 | ) |
| Total                    change during the year                                                                 |   |                         | 29,138  |                                                            |   | 876       |   |   | 30,014 |   |   | 12,475 |   |   | 856 |   |   | 13,331 |   |   | 10,665 |   |   | 2 |   |   | 10,667 |   |
| Equity                    affiliate (1)                                                                         |   |                         | -       |                                                            |   | 952       |   |   | 952 |   |   | - |   |   | (435 | ) |   | (435 | ) |   | - |   |   | (915 | ) |   | (915 | ) |
| Total                                                                                                           |   |                         | 29,138  |                                                            |   | 1,828     |   |   | 30,966 |   |   | 12,475 |   |   | 421 |   |   | 12,896 |   |   | 10,665 |   |   | (913 | ) |   | 9,752 |   |

|   | (1) | Represents                  PDVSA’s equity share of the Petrozuata extra heavy oil joint                  venture. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------|

----