As filed with the Securities and Exchange Commission on June 27, 2001

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

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FORM 20-F

(Mark One)

Commission file number 001-12140

Propernyn B.V.

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(Exact Name of Registrant as Specified in Its Charter)

Propernyn B.V.

The NetherlandsTranslation of Registrant's Name Into English

(Jurisdiction of Incorporation or Organization)


c/o Petróleos de Venezuela, S.A.Avenida Libertador, La Campiña, Apdo. 169, Caracas 1010-A, Venezuela

(Address of Principal Executive Offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange
on Which RegisteredGuarantee of the following securities:PDV America, Inc. 77/8% Senior Notes Due 2003

New York Stock Exchange, Inc.


Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 1,113 shares of the
common stock were outstanding as of December 31, 2000.

Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No

Indicate
by check mark which financial statement item the registrant has elected to follow.

Item
17   Item 18 X

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PROPERNYN B.V.    Annual Report Pursuant to Section 13 or 15(d) of the  Securities Exchange Act of 1934  For the Fiscal Year Ended December 31, 2000

Table of Contents

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|                                                |                                                                      | Page
|----------------------------------------------- | -------------------------------------------------------------------- | ----
|INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE |                                                                      | ii  
|FACTORS AFFECTING FORWARD-LOOKING STATEMENTS    |                                                                      | ii  
|PART I                                          |                                                                      | 1   
|                                                | Item 1. Identity of Directors, Senior Management and Advisers        |     
|                                                | Item 2. Offer Statistics and Expected Timetable                      |     
|                                                | Item 3. Key Information                                              |     
|                                                | Item 4. Information on the Company                                   |     
|                                                | Item 5. Operating and Financial Review and Prospects                 |     
|                                                | Item 6. Directors, Senior Management and Employees                   |     
|                                                | Item 7. Major Shareholders and Related Party Transactions            |     
|                                                | Item 8. Financial Information                                        |     
|                                                | Item 9. The Offer and Listing                                        |     
|                                                | Item 10. Additional Information                                      |     
|                                                | Item 11. Quantitative and Qualitative Disclosures About Market Risks |     
|PART III                                        |                                                                      | 24  
|                                                | Item 17. Financial Statements                                        |     
|                                                | Item 18. Financial Statements                                        |     
|                                                | Item 19. Exhibits                                                    |     
|SIGNATURES                                      |                                                                      | 25  
|ANNEX A                                         |                                                                      | A-1 

i

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

With respect to our guarantees of PDV America, Inc.'s 77/8% Senior Notes due 2003, PDV America, Inc.'s annual report on
Form 10-K for the year ended December 31, 2000, as first filed with the U.S. Securities and Exchange Commission (Commission file No. 001-12138) on
April 2, 2001 is incorporated herein by reference.

FACTORS AFFECTING FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specifically, certain statements under the caption "Item 4.B. Business overview" and under the caption
"Item 5. Operating and Financial Review and Prospects" relating to refining processes, capital expenditures and investment, the expected results of joint venture projects, the anticipated demand for
new or improved products, environmental compliance and remediation and related capital expenditures and investments and future capital expenditures in general are forward-looking statements. Such
statements are subject to certain risks and uncertainties, such as increased inflation, continued access to capital markets and commercial bank financing on favorable terms, increases in regulatory
burdens, levies or taxes in international markets, changes in prices or demand for petroleum refined products produced by us or our affiliates as a result of competitive actions or economic factors
and changes in the cost of crude oil, feedstocks, blending components or refined products. Such statements are also subject to the risks of increased costs related to technologies and the performance
by third parties of their contractual obligations, including, without limitation, with respect to construction contracts and indemnification agreements that such third parties have entered into with
us. Should one or more of these uncertainties or risks materialize, actual results may vary materially from those estimated, anticipated or projected. Specifically, capital costs could increase,
projects could be delayed and anticipated improvements in refining capacity or performance may not be fully realized. Although we believe that the expectations reflected by such forward-looking
statements are reasonable based on information currently available to us and our subsidiaries and affiliates, we cannot assure you that such expectations will prove to be correct. Accordingly, readers
are cautioned not to place undue reliance on the forward-looking statements.

The
annual report of PDV America, Inc. for the year ended December 31, 2000 on Form 10-K, incorporated by reference herein and referred to throughout
this annual report, also contains forward-looking statements. For a discussion of the factors affecting the forward-looking statements contained in PDV America, Inc.'s annual report, see
"Factors Affecting Forward-Looking Statements" on page ii thereof.

ii

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As used in this annual report references to "dollars" or "$" are to the lawful currency of the United States. A unit conversion table and a glossary of certain
oil and gas terms, including abbreviations for certain units, used in this annual report are attached hereto as Annex A. When used in this annual report, the terms "we," "our," "us" and "Propernyn"
refer to Propernyn B.V. and its consolidated subsidiaries, the term "Petróleos de Venezuela" refers to Petróleos de Venezuela, S.A. and the term "PDVSA" refers to
Petróleos de Venezuela and its consolidated subsidiaries.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not Applicable

Item 2. Offer Statistics and Expected Timetable

Not Applicable

Item 3. Key Information

3.A Selected financial data

The following selected financial data have been derived from our audited consolidated financial statements, which are prepared in accordance with U.S. GAAP,
and should be read in conjunction with
our consolidated financial statements. Our consolidated financial statements as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000, have
been audited by Deloitte & Touche, and are included elsewhere in this annual report. Our consoldiated financial statements as of December 31, 1998, 1997 and 1996 for each of the years
then ended have also previously been audited by Deloitte & Touche, but are not included in this annual report.

|                                                      |                                                     | 2000 |        | 1999 |        | 1998 |        | 1997 |        | 1996 |       
|----------------------------------------------------- | --------------------------------------------------- | ---- | ------ | ---- | ------ | ---- | ------ | ---- | ------ | ---- | ------
|
|Income Statement Data for the year ended December 31: |                                                     |      |        |      |        |      |        |      |        |      |       
|                                                      | Net sales and sales to affiliates                   |      | 20,405 |      | 13,331 |      | 11,004 |      | 13,665 |      | 13,025
|                                                      | Equity in earnings of affiliates (1)                |      | 85     |      | 3      |      | 72     |      | 89     |      | 57    
|                                                      | Other income (expense), net                         |      | 21     |      | 71     |      | (2     | )    | (9     | )    | 3     
|                                                      |                                                     |      |        |      |        |      |        |      |        |      |       
|                                                      | Total net revenues                                  |      | 20,511 |      | 13,405 |      | 11,074 |      | 13,745 |      | 13,085
|                                                      | Total costs of sales and expenses                   |      | 20,107 |      | 13,284 |      | 10,857 |      | 13,306 |      | 12,840
|                                                      | Income before income taxes                          |      | 480    |      | 210    |      | 290    |      | 517    |      | 323   
|                                                      | Net income                                          |      | 298    |      | 161    |      | 165    |      | 410    |      | 245   
|Balance Sheet Data (at end of year):                  |                                                     |      |        |      |        |      |        |      |        |      |       
|                                                      | Total assets                                        |      | 488    |      | 8,524  |      | 7,926  |      | 8,018  |      | 7,484 
|                                                      | Long-term debt (excluding current portion) (2)      |      | 205    |      | 3,785  |      | 4,072  |      | 4,183  |      | 4,109 
|                                                      | Total debt (3)                                      |      | 205    |      | 4,141  |      | 4,181  |      | 4,544  |      | 4,269 
|                                                      | Shareholder's equity                                |      | 216    |      | 1,596  |      | 1,438  |      | 1,273  |      | 905   
|                                                      | Net cash provided by operating activities           |      | 693    |      | 328    |      | 678    |      | 434    |      | 277   
|                                                      | Net cash provided by (used in) investing activities |      | 27     |      | (268   | )    | (565   | )    | (590   | )    | (590  
|                                                      | Net cash (used in) provided by financing activities |      | (845   | )    | (2     | )    | (100   | )    | 159    |      | 326   
|                                                      | Capital expenditures                                |      | (113   | )    | (254   | )    | (236   | )    | (214   | )    | (439  
|                                                      | Capital stock ($ in thousands)                      |      | 62     |      | 62     |      | 62     |      | 62     |      | 62    

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1

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We have not declared or paid any dividends since our inception.

3.D Risk factors

Our business depends materially on the ability of PDVSA to supply crude oil to the refineries in which we own an interest. A decrease in crude oil production by PDVSA could
materially and adversely affect our business.

Historically,
members of the organization of Oil Producing and Exporting Countries, otherwise known as OPEC, have entered into agreements to reduce their production of crude oil. Such
agreements have sometimes increased global crude oil prices by decreasing the global supply of crude oil. Venezuela is a party to and has complied with such OPEC production agreement quotas and we
expect that Venezuela will continue to comply with such production quota agreements with other OPEC members. Since 1998, OPEC's production quotas have resulted in a worldwide decline in production and
substantial increases in the international crude oil prices.

PDVSA
supplies crude oil for processing to various refineries in which we own an interest pursuant to supply contracts. A reduction in PDVSA's crude oil production or export
activities or a decline in the prices of crude oil and refined petroleum products below certain levels for a substantial period could materially and adversely affect our earnings, results of
operations and cash flow.

Risks related to the Venezuelan government's ownership, regulation and supervision of PDVSA.

The
Bolivarian Republic of Venezuela is the sole owner of Petróleos de Venezuela. Petróleos de Venezuela is owned and controlled by the Venezuelan
government that regulates and supervises its operations. The President of Venezuela appoints the members of Petróleos de Venezuela's board of directors by an executive decree. However,
the Republic of Venezuela is not legally liable for the obligations of Petróleos de Venezuela, including its guarantees of indebtedness of its subsidiaries, or the obligations of its
subsidiaries.

Petróleos
de Venezuela has been operated as an independent commercial entity since its formation. However, we cannot assure you that the Venezuelan government will not
in the future intervene in our commercial affairs in a manner that will adversely affect our business. For instance, through Petróleos de Venezuela, the government could revise the
current legal, regulatory and tax framework in a variety of ways that would have an adverse effect on our operations and investments.

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

PDVSA
is an integrated oil and gas company and is exposed to production, equipment and transportation risks that are common to oil and gas companies, including fluctuations in
production due to changes in reserve levels, production accidents, mechanical difficulties, adverse natural conditions, unforeseen production costs, condition of pipelines and the vulnerability of
other modes of transportation and the adequacy of our equipment and production facilities.

These
risks may, among other things, lower the amount of crude oil that are processed in the refineries in which we own an interest, increase our costs and expenses, cause damage to
our property or cause personal injury in our employees or others. We maintain insurance to cover certain losses and exposure
to liability. However, consistent with industry practice, we are not fully insured against the risks described above. We cannot assure you that our insurance coverage is sufficient to cover all of our
losses or our exposure to liability that may result from these risks.

2

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Item 4. Information on the Company

4.A History and development of the company

Propernyn B.V. is a closed limited liability company organized in 1994 under the laws of The Netherlands Antilles. We are domiciled in and are governed by the
laws of The Netherlands Antilles. We are a wholly owned subsidiary of Petróleos de Venezuela, the national oil company of the Bolivarian Republic of Venezuela. Our registered office is
located at Eisenhowerlaan 150-2517 KP, the Hague, the Netherlands and our telephone number is 011-31-70-306-5001.

Prior
to November 3, 2000, we were a wholly owned subsidiary of Venedu Holding N.V., a company organized under the laws of The Netherlands Antilles. Venedu Holding N.V. is
wholly owned by Petróleos de Venezuela. We operated primarily through two of our wholly owned subsidiaries: PDV Holding, Inc. and PDV Europa B.V. PDV Holding, Inc. was
established in 1997 as a holding company for our operations in the United States. PDV Europa B.V. was established in 1982 as a holding company for our operations in Europe.

Effective
November 3, 2000, pursuant to a transfer by Venedu Holding N.V. of all of Venedu Holding N.V.'s share ownership in Propernyn B.V. to Petróleos de
Venezuela, we became a directly and wholly owned subsidiary of Petróleos de Venezuela. Additionally, effective December 1, 2000, the we sold and transferred all of our share
ownership in PDV Holding, Inc. to Petróleos de Venezuela for a purchase price of $3,315.1 million, in exchange for the set-off of loans payable by us to PDVSA
of $1,647.9 million and a set-off of a distribution payable to Petróleos de Venezuela on that date of $1,667.2 million. No gain or loss arose upon sale, as the
purchase price was equal to the carrying value of our investment in PDV Holding, Inc. at that date.

4.B Business overview

We are PDVSA's principal holding company for worldwide investments outside Venezuela, located in Germany, Sweden, the United Kingdom, Belgium and the
Caribbean. Since 1986, through investments in us and in our affiliates, PDVSA has implemented a worldwide program of downstream integration into major consumer markets, designed to establish
long-term value-added outlets for its crude oil production and refined products. Prior to the sale and transfer of our share ownership in PDV Holding, Inc. to
Petróleos de Venezuela effective December 1, 2000, we were also PDVSA's principal holding company for its investments in the United States.

Europe

PDV Europa B.V. was established in 1982 as a holding company for our operations in Europe. PDV Europa B.V. manages PDVSA's 50% interests in Ruhr Oel GmbH and
AB Nynäs Petroleum, two joint ventures which principally manufacture gasoline, diesel fuel, jet fuel, heating oil, petrochemicals, asphalt, naphthenic specialty oil and other refined
products.

PDVSA
supplies crude oil to its European affiliates under various supply agreements. Crude oil supplied by PDVSA to such entities exceeds, as a percentage of total supply, its
aggregate net ownership interest in such entities' combined refining capacity. In 2000, PDVSA supplied 252 thousand barrels of crude oil to the European refineries in which it held an interest.
Out of the 252 thousand barrels of crude oil, 31 thousand barrels were exported from Venezuela and 221 thousand barrels were purchased in the world markets.

At
December 31, 2000, our aggregate net ownership interest in crude oil refining capacity of PDV Europa B.V. was 252 MBPD, approximately 21% of which was located in Europe.

3

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The following table shows our aggregate net ownership interest in refining capacity:

Propernyn's Refinery Production

|                            |                       | Year Ended December 31,           |    
|--------------------------- | --------------------- | --------------------------------- | ---
|
|
|Aggregate Refining Capacity |                       |                                   |    
|                            | PDV Holding, Inc. (1) |                                   | 951
|                            | PDV Europa B.V.       |                                   | 252
|                            |                       |                                   |    
|                            |                       | Total aggregate refining Capacity |    
|                            |                       |                                   |    
|Utilization                 |                       |                                   |    
|                            | PDV Holding, Inc.     |                                   | 92 
|                            | PDV Europa B.V. (2)   |                                   | 101

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Ruhr Oel GmbH, the largest refining company in Germany, is a joint venture between PDV Europa B.V. and Veba Oel AG, of Germany. Ruhr Oel holds an interest in
four German refineries (Gelsenkirchen, Neustadt, Karlsruhe and Schwedt) in which PDVSA's net interest in crude oil refining capacity at December 31, 2000 was 113, 31, 33 and 39 MBPD,
respectively. Ruhr Oel also owns two petrochemical complexes (Gelsenkirchen and Münchmünster). The Gelsenkirchen complex, which includes modern, large-scale units that
are integrated with the crude oil refineries located in the same complex, primarily produces olefins, aromatic products, ammonia and methanol. The Münchmünster complex,
integrated with the nearby Bayear Oil refinery, primarily produces olefins. Ruhr Oel's petrochemical complexes have an average production capacity of approximately 3.2 million metric tons per
year of olefins, aromatic products, methanol, ammonia and various other petrochemical products. Ruhr Oel's share of the refining capacities of such refineries is hereinafter referred to herein as
"Ruhr Oel Refineries." Veba Oel operates the Gelsenkirchen refinery and the Gelsenkirchen and Münchmünster petrochemical complexes under a long-term operating
agreement with Ruhr Oel. Ruhr Oel has no employees and does not directly operate any of these refineries.

The
crude oil processed at the Ruhr Oel Refineries is supplied in equal amounts by Petróleos de Venezuela and Veba Oel pursuant to a joint venture agreement and a
long-term supply agreement. Pursuant to these agreements, Ruhr Oel does not acquire title to any crude oil or refined products that it processes. Rather, the crude oil supplied by
Petróleos de Venezuela or Veba Oel remains owned by Petróleos de Venezuela or Veba Oel, as applicable, throughout the refining process. Petróleos de
Venezuela's share of the refined products processed at the Ruhr Oel Refineries is distributed through Veba Oel's marketing network. The operating costs of the Ruhr Oel Refineries are shared equally by
Petróleos de Venezuela and Veba Oel.

Petróleos
de Venezuela receives 50% of the revenues from Veba Oel's sales of the refined products processed at the Ruhr Oel Refineries, less attributable operating and
marketing costs. This arrangement has been providing Ruhr Oel with constant break-even results.

Petróleos
de Venezuela supplies crude oil to the Ruhr Oel Refineries. As such, Petróleos de Venezuela and not us, receives revenues derived from the
crude oil refining which takes place at the Ruhr Oel Refineries and from the sale of refined products attributable to such crude oil.

4

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The following table shows our aggregate net ownership interest in the Ruhr Oel Refineries' refining capacity, refinery input and product yield:

Propernyn's Net Ownership Interest in Ruhr Oel Refineries

Year Ended December 31,2000

1999

1998(MBPD, except as otherwise indicated)Refining Capacity(1)

216

216

216Crude Oil Refinery Input

226

225

225Other Feedstocks

25

22

19Product YieldLight fuelsGasoline

63

58

59Middle distillates

104

97

105Residuals

10

9

7Asphalt/Coke

9

6

5Total refined product yield

186

170

176PetrochemicalsIndustrial products and petrochemicals

63

61

54Utilization(2)

105
%
104
%
104
%


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5

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Terminal and Pipelines Interests

|Company                                        |  | Ruhr Oel's
Participation |  | Type of Operations |  | Location                         |  | Total Capacity
|---------------------------------------------- |  | ------------------------ |  | ------------------ |  | -------------------------------- |  | --------------
|N.V. Rotterdam-Rijn Rijplelieding
Maatschappij |  | 20.0%                    |  | Pipeline           |  | Rotterdam to
Gelsenkirchen       |  | 340MBPD       
|Société du Pipeline
Sud-Européen S.A.          |  | 7.5%                     |  | Terminal/Pipeline  |  | Marseille to
Karsruhe            |  | 450MBPD       
|Nord-West Oelleitumg GmbH                      |  | 33.7%                    |  | Terminal/Pipeline  |  | Wilhelmshaven to
Gelsenkirchen   |  | 270MBPD       
|Transalpine Pipeline Companies                 |  | 11.0%                    |  | Terminal/Pipeline  |  | Trieste to Neustadt and
Karsruhe |  | 680MBPD       

In
addition, three ports owned by Ruhr Oel on the Rhine-Herme Canal, with barge access to the Rhine and North Sea coastal ports, provide Ruhr Oel with access to substantial refinery
feedstocks.



AB Nynäs Petroleum ("Nynäs") is a Swedish owned joint venture that is 50.001% owned by PDVSA (through PDV Europa B.V.) and
49.999% owned by Fortum Oil and Gas OY. Each party to the joint venture has equal voting control. Nynäs produces and markets bitumen naphtenic specialties and other petroleum products
for the European market.

Nynäs'
business plan is as follows:



Nynäs
owns and operates four specialized refineries, Nynäshamn and Gothenberg in Sweden, Antwerp in Belgium and Dundee in Scotland. PDVSA's net interest
in crude oil refining capacity in each of the refineries at December 31, 2000 was 11, 6, 7 and 5 MBPD, respectively. Nynäs also owns a 50% interest in a refinery in Eastham,
England. The Eastham refinery is a specialized asphalt refinery in which PDVSA's net interest crude oil refining capacity at December 31, 2000 was 7 MBPD. All of the above refineries shall
hereinafter be referred to, collectively, as the "Nynäs Refineries." PDVSA's total net interest in refining capacity in the Nynäs Refineries' was 36 MBPD at
December 31, 2000.

The
Nynäs Refineries are specially designed to process heavy sour crude oil. The Nynäs Refineries in Nynäshamn produce asphalt and
naphthenic specialty oils. The Dundee, Gothenbeug, Antwerp and Eastham refineries are specialized asphalt refineries. Nynäs purchases crude oil from PDVSA and produces asphalt and
naphthenic specialty oils, two products for which Venezuelan heavy sour crude oil is particularly well suited feedstock due to its proportions of naphthenic, paraffinic and aromatic compounds. Asphalt
products are used for road construction and various industrial purposes, while naphthenic specialty oils are used principally in electrical transformers, as mechanical process oils and in the rubber
and printing ink industries.

6

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Nynäs' aggregate net ownership interest in crude oil refining capacity (including its 50% interest in the Eastham, England refinery) was 72 MBPD at December 31,
2000. In 2000, Nynäs sold 5 MBPD of specialty naphthenic oils and 18 MBPD of asphalt, making it the third largest asphalt supplier in the European market.

The
following table shows our aggregate net ownership interest in the Nynäs Refineries refining capacity, refinery input and product yield:

Propernyn's Net Ownership Interest in Nynäs Refineries

Year Ended December 31,2000

1999

1998(MBPD, except as otherwise indicated)Refining Capacity(1)

36



36



36Crude Oil Refinery Input

26



28



28Refined Product YieldAsphalt

18

60
%
19

70
%
18

67
%Distillates

7

23

4

15

6

22Naphthenic specialty oils

5

17

4

15

3

11Total refined product yield

30

100
%
27

100
%
27

100
%Utilization(2)

72
%


78
%


78
%


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Nynäs
does not own crude oil reserves or production facilities and, therefore, purchases crude oil for its refining operations. Nearly all crude oil purchased by
Nynäs is supplied by PDVSA pursuant to long-term supply contracts. PDVSA supplies Nynäs only with high sulfur, extra-heavy Venezuelan crude oil.

The
following table shows a breakdown of Nynäs' sales by type of refined product:

Nynäs Refined Product Sales

Year Ended December 31,2000

1999

1998($ in millions)Refined ProductsAsphalt

430

264

277Distillates

139

168

136Naphthenic specialty oils

192

154

138Total product sales

761

586

551


Nynäs
markets asphalt products through an extensive marketing network in several European countries. Scandinavia, the United Kingdom and Continental Europe are the
source of 28%, 23% and

7

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23%, respectively, of Nynäs' consolidated revenues for 2000. Nynäs markets its naphthenic specialty oils throughout Europe, Africa, the Middle East and Australia, and the
distillates that it produces are either sold as fuel or further processed into naphthenic specialty oils. Nynäs distributes its refined products primarily by specialized bitumen ships,
rail tanks and trucks. Nynäs also maintains a terminal system network in Scandinavia.

The Caribbean

We own two Caribbean crude oil and petroleum product storage facilities located in Bonaire and The Bahamas.



We maintain a crude oil and refined product storage and transshipment facility in The Bahamas through the Bahamas Oil Refining Company International Limited
("BORCO"), our indirectly and wholly owned subsidiary located in The Bahamas. BORCO is 100% owned by Baproven Limited, our wholly owned subsidiary. The BORCO facility handles crude oil, fuel oil,
gasoline and other distillates, and has four deep water berths and has an aggregate storage capacity of approximately 20 million barrels ("MMB"), of which approximately 10 MMB of storage
capacity is currently in service. BORCO's main activities include the storage, blending and sale of gasoline, diesel fuel, jet fuel and bunker fuel. BORCO is the largest petroleum storage facility in
the Caribbean and is one of the closest terminals to the mainland United States with blending and transshipment facilities.



Through our wholly owned subsidiary, Bonaire Petroleum Corporation N.V. ("BOPEC"), a Netherlands Antilles company, we maintain a crude oil and petroleum
product storage and transshipment facility in Bonaire with four deep water berths and an aggregate storage capacity of approximately 10.1 MMB, all of which is currently in service. BOPEC's facility is
equipped to handle extra-heavy crude oil, Orimulsion®, fuel oil, gasoline and distillates. BOPEC's main activities include transshipment for our subsidiaries, strategic storage for PDVSA's
Venezuelan subsidiaries and fuel oil blending.

BORCO's
and BOPEC's terminal facilities provide PDVSA with the ability to store significant quantities of crude oil and petroleum products outside Venezuela. These terminal facilities
also constitute a source of crude oil and petroleum product supply near the United States.

United States

PDV Holding, Inc. was established in 1997 as a holding company for our operations in the United States. Through PDV America, Inc., PDV
Holding, Inc. manages PDVSA's 100% interest in CITGO Petroleum Corporation ("CITGO") and PDVSA's 100% interest in PDV Midwest Refining, LLC. Through PDV Chalmette Inc., PDV
Holding, Inc. manages PDVSA's 50% equity interest in a crude oil refinery in Chalmette, Louisiana, Chalmette Refining L.L.C., which principally produces gasoline and distillate from upgraded
extra heavy crude oil.



In May 1997, PDV America, Inc. acquired sole ownership of a refinery in Lemont, Illinois, together with associated product distribution
terminals, 89 retail outlets and a hydrocarbon solvents marketing business, in each case as a result of PDV America, Inc.'s liquidation of its 50% interest in a joint venture with the Union Oil
Company of California. Following the acquisition, PDV America, Inc. created a 100% owned subsidiary, PDV Midwest Refining, to manage and operate the Lemont refinery, which has an oil refining
capacity of 167 thousands of barrels per day ("MBPD"). PDV Midwest

8

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Refining principally manufactures gasoline, diesel fuel, jet fuel, petrochemicals, lubricants, asphalt and refined waxes.



CITGO owns and operates two modern, highly complex crude oil refineries (located in Lakes Charles, Louisiana and Corpus Christi, Texas) and two asphalt
refineries (located in Paulsboro, New Jersey and Savannah, Georgia) with a combined aggregate crude oil refining capacity rate of 582 MBPD. CITGO also owns a minority interest in LYONDELL-CITGO
Refining L.P., a limited partnership (formerly a limited liability company) that owns and operates a refinery in Houston, Texas, with a rated crude oil refining capacity of 265 MBPD. LYONDEL-CITGO is
a joint venture owned 41.25% by PDVSA and 58.75% by Lyondell Petrochemical Company. CITGO also operates a 167 MBPD refinery in Lemont, Illinois, owned by PDV Midwest Refining. CITGO's assets include a
65% owned lubricant and wax plant, pipelines, and equity interests in pipeline companies and petroleum storage terminals. CITGO's transportation fuel customers include primarily CITGO branded
wholesale marketers, convenience store and airlines located mainly east of the Rocky Mountains. Asphalt is generally marketed to independent paving contractors on the East and Gulf Coasts and the
Midwest of the United States. Lubricants are sold principally in the United States to independent marketers, mass marketers and industrial customers. Petrochemical feedstocks and industrial products
are sold to various manufacturers and industrial companies throughout the Unites States. Petroleum coke is sold primarily in international markets.



In October 1997, through PDV Chalmette, Inc., PDV Holding, Inc. acquired a 50% equity interest in Chalmette Refining L.L.C. for an initial
cash investment of $52.5 million and incurred debt payable to
the joint venture partner for $227.5 million in a joint venture with Exxon Mobil Corporation. The debt incurred pursuant to this joint venture was paid in full in July 1998.

The
Chalmette refinery has a total refining capacity of 184 MBPD. PDV Holding, Inc.'s net interest in refining capacity of the Chalmette refinery is of 92 MBPD. PDV Chalmette
assigned to CITGO its option to purchase up to 50% of the refined products produced at the Chalmette refinery, through December 31, 2000. CITGO exercised this option on November 1, 1997
and acquired approximately 67 MBPD and 66 MBPD of refined products from the refinery in 2000 and 1999, respectively, approximately one-half of which was gasoline.

The
Chalmette refinery will be used to process upgraded extra-heavy crude oil to be produced by the Cerro Negro joint venture located in the Eastern Venezuelan basin. The Cerro Negro
joint venture is a joint venture among PDVSA, Exxon Mobil Corporation and Veba Oel AG, with PDVSA having a 41.7% interest and Exxon Mobil Corporation and Veba Oel having a 58.3% interest collectively.
Exxon Mobil Corporation, which operates both the Cerro Negro joint venture and the Chalmette refinery, has agreed to purchase 100% of the refined petroleum products produced at the Chalmette refinery
(subject to CITGO's option to purchase 50% of such products) at market prices.



In October 1998, PDV Holding, Inc. entered into definitive agreements with Phillips Petroleum Corporation to form the Sweeny Joint Venture (in
which each party will have a 50% equity interest) for the purposes of processing crude oil in the United States. Pursuant to the Sweeny Joint Venture, PDV Holding, Inc. and Phillips Petroleum
Corporation will construct an integrated vacuum/coker facility within an existing refinery owned by Phillips Petroleum Corporation in Sweeny, Texas.

This
coking facility is currently under construction. The estimated total cost of construction of this coking facility is $538 million that is currently being funded through
the issuance of $350 million of

9

---

8.85% senior bonds due December 18, 2019 by the joint venture. It is anticipated that the remaining construction costs will be funded through equity contributions. In connection with any
financing, the partners to the joint venture have agreed that each will make, or cause to be made, capital contributions to the joint venture on a pro rata, joint-and several basis to the
extent necessary to cover costs incurred prior to the completion of the construction.

Pursuant
to the terms of the Sweeny Joint Venture, Phillips Petroleum Corporation will purchase heavy crude oil from PDVSA, and the Sweeny Joint Venture will process feedstocks
derived therefrom pursuant to a processing agreement. Revenues from the Sweeny Joint Venture will consist of fees paid by Phillips Petroleum Corporation to the joint venture under the processing
agreement and any revenues from the sale of coke to third parties.

Environment and Safety Matters

For a description of environmental and safety issues affecting our United States subsidiaries during 2000, see "Items 1. and 2. Description of Business and
PropertiesEnvironment and Safety" of PDV America, Inc.'s annual report on Form 10-K, incorporated herein by reference.



Our European subsidiaries and joint ventures are subject to extensive European Union, international, national and local environmental laws and regulations.

Our
operations within the European Union are subject to environmental directives and regulations issued by the European Union governing, among other things, air and water emissions,
and the generation, use, handling, transportation, treatment and disposal of hazardous materials. European Union regulations, issued by the European Union Commission or the European Union Council are
directly enforceable by their terms while European Union member states must enact domestic legislation to implement and enforce European Union directives issued by the European Union Council. European
Union member states are, based on European Union directives, implementing increasingly strict national regulations relating to oil spill prevention, disaster-response planning and funding and limits
on emissions of lead, sulfur dioxide and volatile organic compounds. As part of its overall effort to combat air pollution, the European Union has set stringent emission limits for new cars and
commercial vehicles to be implemented in stages.

We
believe that our operations are in substantial compliance with these laws and regulations. In addition, our European Union operations are being adjusted to suit changes in
consumption patterns resulting from various measures adopted by the European Union authorities, including measures to reduce the maximum levels of pollutants contained in exhaust emissions of motor
vehicles and a directive on fuel quality to phase out the use of leaded petroleum by 2000. Both measures were introduced under the European Union Commission's Auto Oil Program, which was based on the
results of an extensive, three-year technical collaboration with the European oil and automobile industries. As of December 31, 2000, we have phased out the use of leaded petroleum
in our European Union operations.

Our
non-U.S. subsidiaries and joint ventures are subject to environmental laws and regulations, at the national and local level, relating to, among other requirements, the
acquisition of certain permits and the cleanup of environmental damage. European Union member states are at various stages of adopting European Union requirements.

In
Germany, the refining industry is subject to stringent air and water emissions regulations under the Federal Pollution Control Act and Water Resources Management Act. Compliance
with both the Acts could require substantial capital expenditures. In addition, the 1991 Environmental Liability Law imposes strict, joint and several liability on property owners and operators for
pollution related

10

---

damages. Recently the German federal government also drafted a Soil Remediation Act pursuant to which site operators can be required to remedy and restore existing soil and ground water that has been
contaminated.

In
the United Kingdom, petroleum processing, transportation and waste disposal is subject to an Integrated Pollution Control permit authorization pursuant to the Environmental
Protection Act of 1990. Under the Integrated Pollution Control, new facilities are required to use the best available techniques without entailing excessive cost. All sites in the United Kingdom in
which we have an interest are being monitored and upgraded in accordance with the Integrated Pollution Control. In certain instances, the Water Resources Act of 1991 and certain common law doctrines
also impose strict liability for water pollution. Additionally, the Environmental Act of 1995 places cleanup requirements on the owners and occupiers of contaminated property.

Under
Belgian national and regional legislation, licensing conditions imposed on oil refineries and terminals impose certain sanctions, including remediation orders and fines. Damages
may also be imposed for pollution-related injury to persons or property. Swedish environmental regulations additionally impose sanctions for spills and unauthorized emissions.

Our
non-U.S. operations are subject to certain international agreements and conventions, imposing liability for environmental damage arising from marine pollution and oil
spills and to treaties regulating the trans-border shipment of hazardous chemicals and wastes.

We
may incur significant capital costs to comply with increasingly stringent environmental laws and regulations. Potential environmental expenditures include improvements to
wastewater treatment facilities, sulfur removal operations and containment of underground leakage at refinery complexes, service stations and crude oil and refined product storage terminals.

During
2000, our non-U.S. subsidiaries and joint ventures spent, collectively, approximately $31 million for environmental, health and safety capital improvements
in their operations. These companies anticipate budgeting, collectively, approximately $64 million for environmental and health and safety capital projects over the next two years. The above
expenditure and anticipated budget include 50% of the total amount spent or budgeted by Ruhr Oel and Nynäs, representing our percentage interest in such joint ventures.

Our
management believes that our subsidiaries and joint venture operations are in substantial compliance with these applicable laws, and additional efforts will be made to fulfill
future environments laws requirements.

11

---





Our non-U.S. subsidiaries and joint ventures are subject to strict occupational health and safety laws and maintain comprehensive safety, training
and maintenance programs. We believe that these companies are in substantial compliance with applicable occupational health and safety laws.

4.C Organizational structure

We are a wholly owned subsidiary of Petróleos de Venezuela, the national oil company of the Bolivarian Republic of Venezuela.
Petróleos de Venezuela conducts its operations through its Venezuelan and international subsidiaries. Through its wholly owned subsidiary, PDVSA Petróleo S.A.,
Petróleos de Venezuela manages its exploration and production business units, its refining and trading business units and its administration, services, engineering and project business
units. Petróleos de Venezuela, S.A. conducts its petrochemical activities through Petroquímica de Venezuela, S.A. Other wholly owned subsidiaries of
Petróleos de Venezuela include Intevep, S.A., which conducts Petróleos de Venezuela's research and development activities, Sociedad de Fomento de Inversiones Petroleras,
which develops vehicles to enable domestic and international investors to invest in the Venezuelan oil industry, and Centro Internacional de Educaciün y Desarrollo, which is responsible
for the training and development of PDVSA's private sector personnel. In the United States, Petróleos de Venezuela conducts its crude oil refining and refined petroleum product
operations through its wholly owned subsidiary, PDV Holding, Inc. In Europe, Petróleos de Venezuela conducts its crude oil refining and refined petroleum product activities
through PDV Europa B.V.

We
are PDVSA's principal holding company for worldwide investments outside Venezuela, located in Germany, Sweden, the United Kingdom, Belgium and the Caribbean. Prior to the sale and
transfer of our share ownership in PDV Holding, Inc. to Petróleos de Venezuela effective December 1, 2000, we were also PDVSA's principal holding company for its
investments in the United States.

Our
significant subsidiaries, country of incorporation and our proportion of ownership in such subsidiaries are as set forth below:

LOGO

12

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4.D Property, plant and equipment

See note 6 to our consolidated financial statements for a summary of information concerning our property, plant and equipment.

Item 5.  Operating and Financial Review and Prospects

Basis of presentation

The following discussion should be read in conjunction with our consolidated financial statements included elsewhere herein. Our financial statements are
prepared in accordance with U.S. GAAP.

5.A Operating results

Overview

Our consolidated operations consisted of the operations of (1) PDV Holding, Inc. and its consolidated subsidiaries and joint ventures,
(2) PDV Europa B.V. and its consolidated subsidiaries and joint ventures and (3) BOPEC and Baproven Limited. Joint ventures are accounted for under the equity method. In 2000, 1999 and
1998, PDV Holding, Inc. and its subsidiaries (including PDV America, Inc.) accounted for approximately 99% of our total revenues.

Effective
December 1, 2000, we sold and transferred to Petróleos de Venezuela all of our share ownership in PDV Holding, Inc. for a purchase price of
$3,315.1 million, in exchange for the set-off of loans payable by us to PDVSA of $1,647.9 million and a set-off of a distribution payable by us to
Petróleos de Venezuela on that date of $1,667.2 million. The purchase price was equal to the carrying value of our investment in PDV Holding, Inc. at that date; as such,
we incurred no gain or loss in connection with the sale.

As
a result of the transfer of PDV Holding, Inc., the only operations remaining at our company are in Europe and the Caribbean. These operations, as detailed below, are very
small relative to our historical operations. Our results after the transfer are not comparable to our results prior to the transfer. For information on the revenues, gross profit and net income of the
transferred assets, see note 1 to our consolidated financial statements.

Results of Operations2000 compared to 1999

Our results of operations for 2000 include those of PDV Holding, Inc. and its subsidiaries for the eleven-month period from January 1, 2000
through November 30, 2000. The table below sets forth our results of operations for 2000 and 1999 that are attributable to PDV Holding, Inc. and its subsidiaries and our results of
operations for 2000 and 1999 that are attributable to the rest of our operating subsidiaries:

Total

PDV Holding, Inc.

Continuing
Operations($ in millions)For the year ended December 31, 2000:Total net revenues

20,511

20,446

65Costs of operations

(20,108
)
(20,018
)
(90
)Foreign exchange gain

1



1Interest income from affiliates

77

75

2Income taxes

(183
)
(183
)
Net income

298

320

(22
)


13

---

Total

PDV Holding, Inc.

Continuing
Operations($ in millions)For the year ended December 31, 1999:Total net revenues

13,405

13,300

105Costs of operations

(13,309
)
(13,214
)
(95
)Foreign exchange gain

25



25Interest income from affiliates

89

87

2Income taxes

(49
)
(49
)
Net income

161

124

37


The
table below sets forth our results of operations for 2000 and 1999:

2000

1999

Increase
(Decrease)($ in millions)

%Results of Operations2000 Compared to 1999:Total net revenues

20,511

13,405

53Costs of operations

(20,108
)
(13,309
)
51Foreign exchange gain

1

25

(96
)Interest income from affiliates

77

89

(13
)Income taxes

(183
)
(49
)
273Net income

298

161

85


Our
results of operations were heavily dependent upon the results of operations of PDV Holding, Inc. and its subsidiaries. In 2000 and 1999, substantially all of our results of
operations (approximately 99% of our revenues) were attributable to PDV America, Inc. and its subsidiaries. PDV America, Inc. is a directly and wholly owned subsidiary of PDV
Holding, Inc. For a description of the results of operations of our U.S. activities, see "Item 5. Management's Discussion and Analysis of Financial Condition and Results of Operations" included
in PDV America, Inc.'s annual report on Form 10-K incorporated herein by reference.

2000

1999

Increase
(Decrease)($ in millions)

%Results of Continuing Operations2000 Compared to 1999(1):Total net revenues

65

105

(38
)Costs of operations

(90
)
(95
)
(5
)Foreign exchange gain

1

25

(96
)Interest income from affiliates

2

2

Net (loss) income

(22
)
37

(159
)


---

Our
continuing operations (set forth in the tables above) in 2000 and 1999 exclude the operations of PDV Holding, Inc. and its subsidiaries that were sold and transferred to
Petróleos de Venezuela, effective December 1, 2000. The following paragraphs discuss certain fluctuations in our continuing operations from 1999 to 2000.

Total
net revenues decreased by approximately $40 million from $105 million in 1999 to $65 million in 2000 primarily due to (1) a write-off of
an accounts payable to an affiliate of

14

---

approximately $57 million that was included in other income in 1999, less (2) an increase in equity in earnings of approximately $11 million from our 50% interest in our joint
venture investments in Europe.

Total
costs of operations decreased by approximately $5 million from $95 million in 1999 to $90 million in 2000 primarily due to the write off of an accounts
receivable of approximately $4 million in 1999.

The
foreign exchange gain in 1999 of approximately $25 million arose from foreign exchange rate movements from our investments in Europe relative to the U.S. dollar. Our
foreign exchange gains are recorded in Propernyn B.V., which we account for as a Caribbean entity in the tables that follow. The net effect of foreign exchange rate fluctuations in 2000 was not
significant, and resulted in a foreign exchange rate gain of approximately $1 million.

Interest
income from affiliates did not fluctuate significantly from 1999 to 2000, and was approximately $2 million in both years.

The
following tables set forth certain results of operations and our total assets by geographical area:

Total Net Revenues by Geographic Area  Results of Operations2000 Compared to 1999  (Propernyn B.V. and subsidiaries)

2000

1999

Increase
(Decrease)($ in millions)

%United States

20,446

13,300

54Europe

21

8

163Caribbean

44

97

(55
)Total net revenue

20,511

13,405

53


Total Net Income (Loss) by Geographic Area  Results of Operations 2000 Compared to 1999  (Propernyn B.V. and subsidiaries)

2000

1999

Increase
(Decrease)($ in millions)

%United States

320

124

158Europe

22

9

144Caribbean

(44
)
28

(257
)Total net income

298

161

85


15

---



Total Assets by Geographic Area  (Propernyn B.V. and subsidiaries)

|              |              | 2000 |     | 1999  |       | 2000/1999
Increase(Decrease) |    
|------------- | ------------ | ---- | --- | ----- | ----- | ---------------------------- | ---
|
|United States |              |     |     | 8,103 |       |                             |    
|Europe        |              | 211  |     | 259   |       | (19                          | )  
|Caribbean     |              | 277  |     | 162   |       | 71                           |    
|              |              |      |     |       |       |                              |    
|              | Total assets |      | 488 |       | 8,524 |                              | (94
|              |              |      |     |       |       |                              |    

Results of Operations1999 Compared to 1998

The table below sets forth our results of operations for 1999 and 1998 that are attributable to PDV Holding, Inc. and its subsidiaries and our results
of operations for 1999 and 1998 that are attributable to the rest of our operating subsidiaries:

|                                      |                                 | Total      |         | PDV Holding, Inc. |         | Continuing
Operations |    
|------------------------------------- | ------------------------------- | ---------- | ------- | ----------------- | ------- | --------------------- | ---
|
|For the year ended December 31, 1999: |                                 |            |         |                   |         |                       |    
|                                      | Total net revenues              |            | 13,405  |                   | 13,300  |                       | 105
|                                      | Costs of operations             |            | (13,309 | )                 | (13,214 | )                     | (95
|                                      | Foreign exchange gain           |            | 25      |                   |        |                       | 25 
|                                      | Interest income from affiliates |            | 89      |                   | 87      |                       | 2  
|                                      | Income taxes                    |            | (49     | )                 | (49     | )                     |   
|                                      |                                 |            |         |                   |         |                       |    
|                                      |                                 | Net income |         | 161               |         | 124                   |    
|                                      |                                 |            |         |                   |         |                       |    

|                                      |                                 | Total      |         | PDV Holding, Inc. |         | Continuing
Operations |    
|------------------------------------- | ------------------------------- | ---------- | ------- | ----------------- | ------- | --------------------- | ---
|
|For the year ended December 31, 1998: |                                 |            |         |                   |         |                       |    
|                                      | Total net revenues              |            | 11,074  |                   | 11,020  |                       | 54 
|                                      | Costs of operations             |            | (10,845 | )                 | (10,753 | )                     | (92
|                                      | Foreign exchange loss           |            | (12     | )                 |        |                       | (12
|                                      | Interest income from affiliates |            | 73      |                   | 73      |                       |   
|                                      | Income taxes                    |            | (125    | )                 | (124    | )                     | (1 
|                                      |                                 |            |         |                   |         |                       |    
|                                      |                                 | Net income |         | 165               |         | 216                   |    
|                                      |                                 |            |         |                   |         |                       |    

16

---

The
table below sets forth our results of operations for 1999 and 1998:

|                                             |                                 | 1999       |         | 1998 |         | Increase
(Decrease) |    
|-------------------------------------------- | ------------------------------- | ---------- | ------- | ---- | ------- | ------------------- | ---
|
|Results of Operations1999 Compared to 1998: |                                 |            |         |      |         |                     |    
|                                             | Total net revenues              |            | 13,405  |      | 11,074  |                     | 21 
|                                             | Costs of operations             |            | (13,309 | )    | (10,845 | )                   | 23 
|                                             | Foreign exchange gain (loss)    |            | 25      |      | (12     | )                   | 308
|                                             | Interest income from affiliates |            | 89      |      | 73      |                     | 22 
|                                             | Income taxes                    |            | (49     | )    | (125    | )                   | (61
|                                             |                                 |            |         |      |         |                     |    
|                                             |                                 | Net income |         | 161  |         | 165                 |    
|                                             |                                 |            |         |      |         |                     |    

Our
results of operations are heavily dependent upon the results of operations of PDV Holding, Inc. and its subsidiaries. In 1999 and 1998, substantially all of our results of
operations (approximately 99% of our revenues) were attributable to PDV America, Inc. and its subsidiaries. PDV America, Inc. is a directly and wholly owned subsidiary of PDV
Holding, Inc. For a description of the results of operations of our U.S. activities, see "Item 5. Management's Discussion and Analysis of Financial Condition and Results of Operations" included
in PDV America, Inc.'s annual report on Form 10-K incorporated herein by reference.

|                                                            |                                 | 1999              |     | 1998 |     | Increase
(Decrease)
|----------------------------------------------------------- | ------------------------------- | ----------------- | --- | ---- | --- | -------------------
|
|Results of Continuing Operations1999 Compared to 1998 (1): |                                 |                   |     |      |     |                    
|                                                            | Total net revenues              |                   | 105 |      | 54  |                    
|                                                            | Costs of operations             |                   | (95 | )    | (92 | )                  
|                                                            | Foreign exchange gain (loss)    |                   | 25  |      | (12 | )                  
|                                                            | Interest income from affiliates |                   | 2   |      |    |                    
|                                                            | Income taxes                    |                   |    |      | (1  | )                  
|                                                            |                                 |                   |     |      |     |                    
|                                                            |                                 | Net income (loss) |     | 37   |     | (51                
|                                                            |                                 |                   |     |      |     |                    

---

Our
continuing operations in 1999 and 1998 exclude the operations of PDV Holding, Inc. and its subsidiaries that were sold and transferred to Petróleos de
Venezuela, effective December 1, 2000. The following paragraphs discuss certain fluctuations in our continuing operations from 1998 to 1999.

Total
net revenues increased by approximately $51 million from 1998 to 1999 primarily because of the write-off of an accounts payable to an affiliate of
approximately $57 million included in other income in 1999.

Costs
of operations remained relatively unchanged from 1998 to 1999. These costs totaled $92 million in 1998 and $95 million in 1999.

The
foreign exchange gain in 1999 of approximately $25 million arose from favorable foreign exchange rate movements in our investments in Europe relative to the U.S. dollar.
The 1998 foreign exchange losses of $12 million arose from adverse foreign exchange rate movements in our investments in Europe relative to the U.S. dollar. Our foreign exchange gains and
losses are recorded in Propernyn B.V., which we account for as a Caribbean entity in the tables that follow.

Interest
income from affiliates and income taxes did not fluctuate significantly from 1998 to 1999.

17

---

The following tables set forth certain results of operations and our total assets by geographical area:

Total Net Revenues by Geographic Area  Results of Operations1999 Compared to 1998  (Propernyn B.V. and subsidiaries)

1999

1998

Increase
(Decrease)($ in millions)

(%)United States

13,300

11,020

21Europe

8

8

Caribbean

97

46

111Total net revenue

13,405

11,074

21


Total Net Income (Loss) by Geographic Area  Results of Operations1999 Compared to 1998  (Propernyn B.V. and subsidiaries)

1999

1998

Increase
(Decrease)($ in millions)

(%)United States

124

216

(43
)Europe

9

(6
)
250Caribbean

28

(45
)
162Total net income (loss)

161

165

(2
)


Total Assets by Geographic Area  (Propernyn B.V. and subsidiaries)

1999

1998

1999/1998
Increase(Decrease)($ in millions)

%United States

8,103

7,431

9Europe

259

305

(15
)Caribbean

162

190

(15
)Total assets

8,524

7,926

8


New Accounting Standard

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS No. 133"). In June 2000 Statement of Financial Accounting Standard No. 138 "Accounting for Certain Derivative Instruments and Certain
Hedging Activities", an amendment of SFAS No. 133, was issued. The statement, as amended and interpreted, establishes accounting and reporting standards for derivative instruments and for
hedging activities. It requires that an entity recognize all derivatives, at fair value, as either assets or liabilities in the statement of financial position with an offset either to shareholder's
equity and other comprehensive income or income depending upon the classification of the derivative. We adopted SFAS No. 133 effective January 1, 2001. Our management believes that the
adoption had no impact on our financial position, results of operations and cash flows as we had no derivatives at that date.

18

---

5.B Liquidity and Capital Resources



For the year ended December 31, 2000, our net cash flows provided by operating activities totaled approximately $693 million, reflecting
principally $297 million of net income, $280 million in depreciation and amortization, deferred income tax of $77 million, distributions in excess of equity in earnings of
affiliates of $37 million, and net change in other items of $2 million. Of our net cash flows used in our operating activities for non-U.S. subsidiaries for the year ended
December 31, 2000, approximately $103 million was attributable to our continuing operations.

Net
changes in other items were due mainly to an increase in accounts receivable and in the inventories of crude oil and refined products in our U.S. subsidiaries, partially offset by
increases in accounts payable. Our non-U.S. subsidiaries held through PDV Europa B.V. recorded a decrease in accounts receivable due from affiliates. Our Caribbean affiliates also recorded
a decrease in accounts receivable, partially offset by increases in inventories of refined products and in accounts payable.



For the year ended December 31, 2000, consolidated net cash provided by our investing activities totaled $27 million, attributable mainly to
$250 million proceeds from notes receivable from affiliates and $156 million cash inflows from investments in and advances to other affiliates, less $113 million of investments in
capital expenditures that comprise primarily investments in refinery equipment at CITGO. Cash flows provided by investing activities of our non-U.S. operations totaled approximately
$165 million in 2000.



For the year ended December 31, 2000, net cash used in our financing activities totaled approximately $844 million, comprising payments of
revolving bank loans of $462 million, payments of $40 million on term bank loans, repayments of short-term bank loans of $16 million, payments of
tax-exempt bonds of $63 million, payments on private placement senior notes of $250 million and payments of other debt and capital lease obligations of $13 million.
Cash flows used in financing activities of our non-U.S. operations totaled approximately $63 million in 2000.

Our
cash requirements for working capital, capital expenditures and acquisitions have historically been financed by a combination of various credit facilities, funds generated from
operations and equity contributions. In our opinion, our working capital is sufficient for our present requirements.

Our
non-U.S. consolidated subsidiaries' capital expenditure plans for 2001 to 2005 require expenditure of approximately $501 million primarily to increase refining
capacity in its joint ventures. This amount includes 50% (representing our percentage interest in these companies) of planned total environmental expenditures by Ruhr Oel and Nynäs.

The
board of directors of Ruhr Oel resolved, in a meeting held on October 7, 1998, to reduce the equity of the company to DM185 million comprising DM165 million
of subscribed capital and DM20 million of equity reserves, of which 50% (equivalent to DM92.5 million), must be received on our behalf for our equity participation in the joint venture.
The amount was received by Petróleos de Venezuela on our behalf in two installments: DM10 million (equivalent to $5.3 million) was received in May 1999 and
DM82.5 million (equivalent to $36.4 million) was received in May 2000. Our investment in Ruhr Oel was reduced from $215 million beginning 1999 to $173 million in
May 2000.

19

---



Item 6. Directors, Senior Management and Employees

6.A Directors and senior management

In accordance with Dutch law governing closed limited liability companies and in accordance with our articles of association, we are managed by a board of
management acting under the instruction of the supervisory board that has power and full executive authority to manage our affairs of Propernyn B.V. The supervisory board is responsible for reviewing
our annual accounts and preparing an annual report that is presented at our annual shareholders' meeting. Shareholders' meetings may be convened by the supervisory board or the board of management.
Each board of management member has authority to represent Propernyn B.V. in dealings with third parties.

Members
of the supervisory board and of the board of management are appointed by and serve at the discretion of our shareholders. The current members of our supervisory board and
board of management are also executive officers of Petróleos de Venezuela. Such members are:

|Name                |  | Age |  | Position with Propernyn B.V.                                          |  | Date
Appointed
|------------------- |  | --- |  | --------------------------------------------------------------------- |  | --------------
|Luis Dávila         |  | 47  |  | Supervisory Board Member                                              |  | 2000          
|Alexander Cárdenas  |  | 46  |  | Supervisory Board Member                                              |  | 2000          
|Julián Fleszczynski |  | 53  |  | Supervisory Board Member,                                             |  | 2000          
|                    |  |     |  | Chief Executive Officer and Board of Management Member                |  | 2000          
|Eduardo Rossell     |  | 47  |  | Board of Management Member                                            |  | 2001          
|Carlos Yánes        |  | 48  |  | Chief Financial and Accounting Officer and Board of Management Member |  | 2000          
|Tomás Carrillo      |  | 48  |  | Board of Management Member                                            |  | 2000          

Certain
information on the current members of our supervisory board and board of management is set forth below:

Luis Dávilacurrently the Chief Financial Officer of Petróleos de Venezuela (a position he has held since
June 2000), a Director of Interven, S.A., a Director of AB Nynäs petroleum and a member of the Shareholders Committee of Ruhr Oel GmbH, which positions he has held since June,
2000. Mr. Dávila has also served as a Principal Director and the Vice President of PDVSA Finance Ltd. since January 2000 and President of PDVSA Finance Ltd.
since July 2000. Prior to serving in such capacities,
Mr. Dávila served as Petróleos de Venezuela's Financial Planning and Control Manager from September 1999 to June 2000, as Petróleos de
Venezuela's Asset Portfolio Manager from April 1999 to September 1999 and as Petróleos de Venezuela's Corporate Outsourcing and Structured Finance Manager from 1997 to
1999. Mr. Dávila started his career in the petroleum industry at Corpoven, S.A. in 1982, and served in various managerial finance positions within Corpoven, S.A. until 1997,
including as Corporate Treasurer, Financial Planning Manager, International Financing Manager, Financial Systems Planning Manager and Budget Supervisor.

Alexander Cárdenasgraduated from the Universidad Simón Bolívar with a degree in chemical
engineering in 1977 and obtained a Master in Business Administration from the University of Cornell in the United States in 1982. He entered the oil industry in 1977, in Maraven S.A., where he worked
in various technical positions in the commerce and supply divisions. In 1986, Mr. Cárdenas joined Interven S.A. as Strategic Planning Analyst. He was also a business manager at
CITGO. In 1991 Mr. Cárdenas was engaged in a brief assignment in PDV USA in New York, as purchases manager, and

20

---

in that same year he was also assigned to Germany to occupy the position of Sub-manager of the Gelsenkirchen Complex in Ruhr Oel GmbH. In 1992, he was appointed as Sub-manager
of Refinement and in 1995 General Manager of Supply and Refinement, in each case, in the Gelsenkirchen Complex in Ruhr Oel GmbH. In 1996, Mr. Cárdenas returned to Interven S.A.
as a business manager. In 1998, he was appointed as General Manager of International Businesses of Interven S.A. In March of 1999 he was appointed Managing Director of Interven S.A. and in
January 2001 he was assigned as General Manager of PDV Europa B.V.

Julián Fleszczynskiis currently the Treasurer of Petróleos de Venezuela (a position he has held since
June 2000) and the President of PDV Insurance Company Ltd. Since July 2000, Mr. Fleszczynski has also served as PDVSA Finance Ltd.'s Principal Director and Vice
President. Mr. Fleszczynski served as Corporación Venezolana de Petróleo's Financial Planning and Control Manager from March 1999 to June 2000 and as
Senior Financial Advisor of PDV America, Inc. from December 1996 to March 1999. Since 1986 he served in various managerial positions at Meneven S.A. and Corpoven, S.A. affiliates
such as District Finance Manager, Budget and Evaluation Manager, Financial Planning, Deputy General Manager of Corporate Finance Department and Project Manager of the Corporate Financial Systems. He
started his career in the petroleum industry in 1974 with Menegrande Oil Company (later known as Meneven S.A.).

Carlos Yánezis currently the Financial Planning and Control Manager of Petróleos de Venezuela, a
position he has held since June 2000. Since July 2000, he has also served as PDVSA Finance Ltd.'s Principal Director and Financial Manager. Mr. Yanez served as Finance
Manager at the Petróleo de Venezuela's Exploration & Production Division from January 1999 to June 2000, and has served in managerial roles since 1989.
Mr. Yanez was Comptroller at Maraven, S.A. from July 1998 to December 1998, Finance Manager at Bitumenes del Orinoco S.A. from 1996 to 1998 and Financial Planning Manager in PDV
UK, London from 1992 to 1995. Mr. Yanez started his career in the petroleum industry in 1977 with Intevep, S.A.

Eduardo Rossellgraduated from the Universidad del Zulia in 1978 with a Bachelor's degree in Economy. He also holds a Masters in
Business Administration (1992) from the University of Tulsa. Mr. Rossell started his career in the oil industry in Lagoven, S.A. in 1979, where he served in various technical and supervisory
positions in within the finance division in PDVSA's western division. Since 1992, Mr. Rossell has served in various managerial capacities, including as PDVSA's Savings Fund Manager, Financial
Reports, Budget and Taxes Manager and Financial Control Manager. Mr. Rossell was appointed as Financial Control Manager for PDVSA's Manufacturing and Marketing Division in 1998.
Mr. Rossell has served as our Financial Control General Manager for the Refining, Supply and Trading Division of Petróleos de Venezuela since 2001.

Tomás Carrillograduated from the Andrés Bello Catholic University with a degree in law and has a
master's degree in law (1983) from the University of Pennsylvania. Mr. Carrillo entered the oil industry in Maraven S.A. in 1984 as an attorney in the International Affairs and Special
Projects. He was appointed as Maraven S.A.'s International Legal Manager in 1990 and Sub-manager of Legal Affairs in 1995. In 1998, Mr. Carrillo was transferred to the Manufacturing
and Marketing Division of PDVSA to occupy the position of Account Manager for the division of Legal Consulting in Commercial Affairs. Since August 2000, Mr. Carrillo has served as
Functional Manager of Commercial Affairs in PDVSA's legal department.

6.B Compensation

All of our supervisory board members and board of management members are also directors or executive officers of Petróleos de Venezuela, and are
compensated by Petróleos de Venezuela. For the year ended December 31, 2000, our supervisory board members and board of management members received no compensation from us for
their services in such capacities.

21

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6.C Board practices

The
dates of appointment of the current members of our supervisory board and board of management are as set forth under "Item 6.A Directors and senior management." Our supervisory
board and board of management members do not have set terms of appointment. We have not entered into any service or employment contracts with any of our directors and executive officers.

6.E Share ownership

As of June 1, 2001, we had 1,113 shares of common stock outstanding. All of our issued and outstanding shares of common stock are owned by
Petróleos de Venezuela.

Item 7. Major Shareholders and Related Party Transactions

7.A Major shareholders

We are a wholly owned subsidiary of Petróleos de Venezuela, the wholly owned national oil company of the Bolivarian Republic of Venezuela. As a
result, Petróleos de Venezuela directly nominates and selects the members of our supervisory board and our board of management. The current members of our supervisory board and board of
management are also executive officers of Petróleos de Venezuela. The Bolivarian Republic of Venezuela is not legally liable for our obligations or Petróleos de
Venezuela's obligations.

Item 8. Financial Information

8.A Consolidated Statements and Other Financial Information

8.A.1See Item 18.

8.A.2See Item 18.

8.A.3See Report of Independent Accountants on page F-1.

8.A.7  Legal proceedings

We and our subsidiaries and joint ventures are involved in various claims and lawsuits arising in the ordinary course of business. We record accruals for
potential losses when our management believes that such losses are probable and reasonably estimated. If such lawsuits and claims were to be determined in a manner adverse to us or subsidiary involved
and in amounts greater than our accruals, such determinations could have a material adverse effect on the our results of operations in a given reporting period. However, in the opinion of our
management, based on the management's current assessment, the ultimate resolution of these lawsuits and claims would not exceed its estimated potential losses by a material amount. In addition,
insurance coverage is available for potential losses with respect to such lawsuits and claims. For details and a description of various lawsuits and claims in which subsidiaries of PDV
America, Inc. are involved, see "Item 3. Legal Proceedings" and "Items 1 and 2. Business and PropertiesEnvironment and Safety" of PDV America, Inc.'s annual report on
Form 10-K, incorporated herein by reference.

22

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Item 9. The Offer and Listing

9.A Offer and listing details

Our common stock is not registered and there is no trading market for our common stock. Our guarantees of the PDV America, Inc.'s senior notes are not
traded separately from such notes. PDV
America, Inc.'s senior notes are traded principally on the New York Stock Exchange and are also listed on the Luxembourg Stock Exchange.

Item 10. Additional Information

10.D Exchange controls

There are no governmental laws, decrees, regulations or other legislation of The Netherlands Antilles that restrict the export or import of capital, or that
affect the remittance of dividends or other payments to non-residents of The Netherlands Antilles who hold our shares. In addition, there are no limitations imposed by the laws of The
Netherlands Antilles or our memorandum and articles of association with respect to the right of non-residents of The Netherlands Antilles to hold or vote our shares.

10.E Taxation

Under current Dutch tax laws, all payments made by us pursuant to our obligations under our guarantees of PDV America, Inc.'s senior notes to any holder
of such notes may be made free of withholding or deduction of, for or on account of, any taxes of whatever nature imposed, levied, withheld or assessed by the Netherlands or any political subdivision
or taxing authority thereof or therein.

Under
current Dutch tax laws, payments made by us pursuant to our obligations under our guarantees of PDV America, Inc.'s senior notes to any holder of such notes will not be
subject to any Dutch taxes in respect of any benefit derived or deemed to be derived or any gain realized from any rights that such holder has pursuant to our guarantees of PDV America, Inc.'s
senior notes, provided that all of the following conditions are satisfied:



10.H Documents on display

The documents that are exhibits to or incorporated by reference in this annual report can be read at the U.S. Securities and Exchange Commission's public
reference facilities at Room 1024, 450 Fifth Street, N.W. Washington, D.C. 20549.

23

---

Item 11. Quantitative and Qualitative Disclosures About Market Risks

We are exposed to market risks, primarily related to hydrocarbon price fluctuations, interest rate fluctuations and foreign currency exchange risks. See
note 1 (Commodity and Interest Rate Derivatives) and note 9 (Long-term Debtinterest rate Swap Agreements) of our consolidated financial statements for a
discussion about such market risks as of December 31, 2000.

PART III

Item 17. Financial Statements

We have responded to Item 18 in lieu of this item.

Item 18. Financial Statements

See pages F-1 through F-36, and S-1 through S-4, incorporated herein by reference.

The
following financial statements, together with the report of Deloitte & Touche thereon, are filed as a part of this annual report:

PageIndependent Auditors' Report

F-1Consolidated Financial StatementsConsolidated Balance Sheets as of December 31, 2000 and 1999

F-2Consolidated Statements of Income and Comprehensive Income for each of the three years in the period ended December 31, 2000

F-4Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2000

F-5Consolidated Statements of Shareholder's Equity for each of the three years in the period ended December 31, 2000

F-8Notes to the Consolidated Financial Statements

F-9Financial Statement ScheduleCondensed Consolidated Financial Information of the Registrant

S-1Financial Statements ScheduleValuation and Qualifying Accounts for each of the three years in the period ended December 31, 2000

S-4


Item 19. Exhibits

|Exhibit 99.1 |  | Annual Report on Form 10-K of PDV America, Inc., for the year ended December 31, 2000 as first filed with the U.S. Securities and Exchange Commission (Commission file No. 001-12138) on April 2,
2001 (incorporated herein by reference).
|------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.

| |  | PROPERNYN B.V.
| |  | --------------
| |  | By:           

Date: June 27,
2001

25

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ANNEX A    Measurement Conversion Table

|1 barrel                       |  | = |  | 42 U.S. gallons                                 |  |   |  |                                                                                                                       
|------------------------------ |  | - |  | ----------------------------------------------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------
|1 barrel of oil equivalent     |  | = |  | 1 barrel of crude oil                           |  | = |  | 5,800 cubic feet of gas (based on the actual average equivalent energy content of PDVSA's proved natural gas reserves)
|1 barrel of crude oil per day  |  | = |  | approximately 50 tons of crude oil per year     |  |   |  |                                                                                                                       
|1 cubic meter                  |  | = |  | 33.315 cubic feet                               |  |   |  |                                                                                                                       
|1 metric ton                   |  | = |  | 1,000 kilograms                                 |  | = |  | approximately 2,205 pounds                                                                                            
|1 metric ton of crude oil      |  | = |  | 1 metric ton of crude oil                       |  | = |  | approximately 7.3 barrels of crude oil (assuming a specific gravity of 33°)                                           
|1 metric ton of oil equivalent |  | = |  | approximately 1,125 cubic meters of natural gas |  |   |  |                                                                                                                       

Glossary of Certain Oil and Gas Terms

Unless the context indicates otherwise, the following terms used in this annual report have the meanings set forth below:

|"API gravity"           |  | An indication of the density of crude oil or other liquid hydrocarbons as measured by a system recommended by the American Petroleum Institute (API), measured in degrees. The lower the API gravity, the heavier the compound. For example, asphalt has
an API gravity of 8° and gasoline has an API gravity of 50°.
|----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|"barrels" or "bbl"      |  | Barrels of crude oil, including condensate and natural gas liquids.                                                                                                                                                                                                                                                  
|"BPD"                   |  | Barrels of oil per day.                                                                                                                                                                                                                                                                                              
|"condensate"            |  | Light carbon substances produced with natural gas which condense into liquid at normal temperatures and pressures associated with surface production equipment.                                                                                                                                                      
|"crude oil"             |  | Crude oil containing condensate.                                                                                                                                                                                                                                                                                     
|"distillate"            |  | Liquid hydrocarbons, distilled from crude or condensate.                                                                                                                                                                                                                                                             
|"extra heavy crude oil" |  | Crude with an API average of less than 11°.                                                                                                                                                                                                                                                                          
|"feedstocks"            |  | Partially refined petroleum which is added to the crude slate and converted into petroleum products.                                                                                                                                                                                                                 
|"MMB"                   |  | Millions of barrels.                                                                                                                                                                                                                                                                                                 
|"MBPD"                  |  | Thousands of barrels per day.                                                                                                                                                                                                                                                                                        
|"olefins"               |  | A class of unsaturated hydrocarbons.                                                                                                                                                                                                                                                                                 
|"sour crude"            |  | Any crude whose long residue has a sulfur content of 1% or higher                                                                                                                                                                                                                                                    

A1

---

PROPERNYN B.V. AND SUBSIDIARIES    CONSOLIDATED FINANCIAL STATEMENTS    AS OF DECEMBER 31, 2000 AND 1999    AND FOR EACH OF THE THREE YEARS IN    THE PERIOD ENDED DECEMBER 31,
2000    AND INDEPENDENT AUDITOR'S REPORT

---

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                 |  | Pages
|-------------------------------------------------------------------------------------------------------------------------------- |  | -----
|Independent Auditors' Report                                                                                                     |  | F-1  
|Consolidated Financial Statements                                                                                                |  | F-2  
|Consolidated Balance Sheets as of December 31, 2000 and 1999                                                                     |  | F-2  
|Consolidated Statements of Income and Comprehensive Income for each of the
three years in the period ended December 31, 2000     |  | F-4  
|Consolidated Statements of Cash Flows for each of the three years in the period
ended December 31, 2000                          |  | F-5  
|Consolidated Statements of Shareholder's Equity for each of the three years in the period
ended December 31, 2000                |  | F-8  
|Notes to the Consolidated Financial Statements                                                                                   |  | F-9  
|Financial Statement ScheduleCondensed Consolidated Financial Information
of the Registrant                                      |  | S-1  
|Financial Statement ScheduleValuation and Qualifying Accounts for each of
the three years in the period ended December 31, 2000 |  | S-4  

---

INDEPENDENT AUDITORS' REPORT

To
the Board of Directors and Shareholders of Propernyn B.V.:

We
have audited the accompanying consolidated balance sheets of Propernyn B.V. and subsidiaries (the "Company") as of December 31, 2000 and 1999, and the related consolidated
statements of income and comprehensive income, shareholder's equity and cash flows for each of the three years in the period ended December 31, 2000. Our audits also included the financial
statement schedules listed in the index to the consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Propernyn B.V. and subsidiaries at December 31, 2000
and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.

/s/
Deloitte & Touche

---

Curaçao,
Netherlands Antilles
April 26, 2001

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2000 AND 1999        (Thousands of U.S. dollars)

|                                  |                                                     | 2000                 |         | 1999  
|--------------------------------- | --------------------------------------------------- | -------------------- | ------- | ------
|ASSETS                            |                                                     |                      |         |       
|CURRENT ASSETS:                   |                                                     |                      |         |       
|                                  | Cash and cash equivalents                           |                      | $       | 22,173
|                                  | Accounts receivable, net                            |                      |         | 3,244 
|                                  | Due from affiliates                                 |                      |         | 4,506 
|                                  | Current portion of notes receivable from affiliates |                      |         |      
|                                  | Inventories                                         |                      |         | 13,531
|                                  | Prepaid expenses and other assets                   |                      |         | 206   
|                                  |                                                     |                      |         |       
|                                  |                                                     | Total current assets |         |       
|NOTES RECEIVABLE FROM AFFILIATES  |                                                     |                      | 117,017 |       
|PROPERTY, PLANT AND EQUIPMENTNET |                                                     |                      | 124,506 |       
|RESTRICTED CASH                   |                                                     |                      |        |       
|INVESTMENTS IN AFFILIATES         |                                                     |                      | 203,185 |       
|OTHER ASSETS                      |                                                     |                      |        |       
|                                  |                                                     |                      |         |       
|TOTAL                             |                                                     | $                    | 488,368 |       
|                                  |                                                     |                      |         |       

See
notes to consolidated financial statements.

F2

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2000 AND 1999        (Thousands of U.S. dollars)

LIABILITIES AND SHAREHOLDER'S EQUITY

|                                                              |                                                                                                | 2000                       |         | 1999    |        
|------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------- | -------
|CURRENT LIABILITIES:                                          |                                                                                                |                            |         |         |        
|                                                              | Short-term bank loans                                                                          |                            | $       |        |        
|                                                              | Accounts payable                                                                               |                            |         | 1,963   |        
|                                                              | Taxes other than income                                                                        |                            |         |        |        
|                                                              | Other current liabilities                                                                      |                            |         | 3,279   |        
|                                                              | Income taxes payable                                                                           |                            |         | 241     |        
|                                                              | Current portion of long-term debt                                                              |                            |         |        |        
|                                                              | Current portion of capital lease obligation                                                    |                            |         |        |        
|                                                              | Due to affiliates                                                                              |                            |         | 61,891  |        
|                                                              |                                                                                                |                            |         |         |        
|                                                              |                                                                                                | Total current liabilities  |         |         | 67,374 
|LONG-TERM DEBT                                                |                                                                                                |                            |        |         |        
|CAPITAL LEASE OBLIGATION                                      |                                                                                                |                            |        |         |        
|DEFERRED INCOME TAXES                                         |                                                                                                |                            |        |         |        
|NOTES PAYABLE TO AFFILIATES                                   |                                                                                                |                            | 204,550 |         |        
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS                   |                                                                                                |                            |        |         |        
|OTHER NONCURRENT LIABILITIES                                  |                                                                                                |                            |        |         |        
|MINORITY INTEREST                                             |                                                                                                |                            |        |         |        
|COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDER'S EQUITY: |                                                                                                |                            |         |         |        
|                                                              | Common stock, Nfl. 100 par value, authorized 5,000 shares, 1,113 shares issued and outstanding |                            |         | 62      |        
|                                                              | Additional capital                                                                             |                            |         | 107,532 |        
|                                                              | Retained earnings                                                                              |                            |         | 165,212 |        
|                                                              | Accumulated other comprehensive loss                                                           |                            |         | (56,362 | )      
|                                                              |                                                                                                |                            |         |         |        
|                                                              |                                                                                                | Total shareholder's equity |         |         | 216,444
|                                                              |                                                                                                |                            |         |         |        
|TOTAL                                                         |                                                                                                | $                          | 488,368 |         | $      
|                                                              |                                                                                                |                            |         |         |        

See
notes to consolidated financial statements.

F3

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR  EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000    
 (Thousands of U.S. dollars)

|                                                                                                                        |                 | 2000 |            | 1999    |   | 1998       |        
|----------------------------------------------------------------------------------------------------------------------- | --------------- | ---- | ---------- | ------- | - | ---------- | -------
|REVENUES:                                                                                                               |                 |      |            |         |   |            |        
|Net sales                                                                                                               |                 | $    | 20,221,910 |         | $ | 13,135,092 |        
|Sales to affiliates                                                                                                     |                 |      | 182,764    |         |   | 196,137    |        
|                                                                                                                        |                 |      |            |         |   |            |        
|                                                                                                                        |                 |      | 20,404,674 |         |   | 13,331,229 |        
|Equity in earnings/(losses) of affiliates                                                                               |                 |      | 84,957     |         |   | 2,594      |        
|Other income (expense)net                                                                                              |                 |      | 21,135     |         |   | 71,880     |        
|                                                                                                                        |                 |      |            |         |   |            |        
|                                                                                                                        |                 |      | 20,510,766 |         |   | 13,405,703 |        
|                                                                                                                        |                 |      |            |         |   |            |        
|COST OF SALES AND EXPENSES:                                                                                             |                 |      |            |         |   |            |        
|Cost of sales and operating expenses (including purchases of approximately $9.0, $5.0 and $3.6 million from affiliates) |                 |      | 19,711,644 |         |   | 12,853,587 |        
|Selling, general and administrative expenses                                                                            |                 |      | 209,727    |         |   | 239,554    |        
|Interest expense:                                                                                                       |                 |      |            |         |   |            |        
|                                                                                                                        | Capital leases  |      |            | 10,138  |   |            | 12,715 
|                                                                                                                        | Related parties |      |            | 45,121  |   |            | 44,010 
|                                                                                                                        | Other           |      |            | 130,295 |   |            | 155,776
|Write-off current asset receivable                                                                                      |                 |      |           |         |   | 3,994      |        
|Minority interest                                                                                                       |                 |      | 1,782      |         |   | 151        |        
|Foreign exchange (gain)/loss                                                                                            |                 |      | (1,211     | )       |   | (25,322    | )      
|                                                                                                                        |                 |      |            |         |   |            |        
|                                                                                                                        |                 |      | 20,107,496 |         |   | 13,284,465 |        
|                                                                                                                        |                 |      |            |         |   |            |        
|INCOME BEFORE INTEREST INCOME AND INCOME TAXES                                                                          |                 |      | 403,270    |         |   | 121,238    |        
|INTEREST INCOME FROM AFFILIATES                                                                                         |                 |      | 76,996     |         |   | 88,835     |        
|                                                                                                                        |                 |      |            |         |   |            |        
|INCOME BEFORE INCOME TAXES                                                                                              |                 |      | 480,266    |         |   | 210,073    |        
|INCOME TAXES                                                                                                            |                 |      | 182,753    |         |   | 49,320     |        
|                                                                                                                        |                 |      |            |         |   |            |        
|NET INCOME                                                                                                              |                 |      | 297,513    |         |   | 160,753    |        
|OTHER COMPREHENSIVE INCOME (LOSS):                                                                                      |                 |      |            |         |   |            |        
|Minimum pension liability adjustment, net of deferred taxes of $(499) in 2000, $2,012 in 1999 and $0 in 1998            |                 |      | 3,214      |         |   | (3,214     | )      
|Foreign currency translation adjustments                                                                                |                 |      | (12,752    | )       |   | 236        |        
|                                                                                                                        |                 |      |            |         |   |            |        
|COMPREHENSIVE INCOME                                                                                                    |                 | $    | 287,975    |         | $ | 157,775    |        
|                                                                                                                        |                 |      |            |         |   |            |        

See
notes to consolidated financial statements.

F4

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS FOR  EACH OF THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000        (Thousands of U.S.
dollars)

|                                                                                                    |                                                                                           | 2000                                      |         | 1999     |         | 1998    |         
|--------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ----------------------------------------- | ------- | -------- | ------- | ------- | --------
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                               |                                                                                           |                                           |         |          |         |         |         
|Net income                                                                                          |                                                                                           | $                                         | 297,513 |          | $       | 160,753 |         
|Adjustments to reconcile net income to net cash provided by operating activities:                   |                                                                                           |                                           |         |          |         |         |         
|                                                                                                    | Depreciation and amortization                                                             |                                           |         | 279,628  |         |         | 288,454 
|                                                                                                    | Provision for losses on accounts receivable                                               |                                           |         | (1,516   | )       |         | 15,110  
|                                                                                                    | Deferred income taxes                                                                     |                                           |         | 77,329   |         |         | 80,172  
|                                                                                                    | Gain on sale of Petro-chemical transport                                                  |                                           |         |         |         |         |        
|                                                                                                    | Loss on sale of investments                                                               |                                           |         |         |         |         | 1,616   
|                                                                                                    | Distributions in excess of equity in earnings of affiliates                               |                                           |         | 37,343   |         |         | 115,932 
|                                                                                                    | Inventory adjustment to market                                                            |                                           |         |         |         |         |        
|                                                                                                    | Postretirement benefits                                                                   |                                           |         |         |         |         |        
|                                                                                                    | Unrealized foreign exchange (gain)/loss on long term debt and notes payable to affiliates |                                           |         | (9,538   | )       |         | 32,316  
|                                                                                                    | Other adjustments                                                                         |                                           |         | (2,711   | )       |         | 16,588  
|Change in operating assets and liabilities, exclusive of acquisitions and dispositions of business: |                                                                                           |                                           |         |          |         |         |         
|                                                                                                    | Accounts receivable                                                                       |                                           |         | (475,153 | )       |         | (367,145
|                                                                                                    | Due from affiliates                                                                       |                                           |         | (1,139   | )       |         | (22,843 
|                                                                                                    | Inventories                                                                               |                                           |         | (54,404  | )       |         | (264,066
|                                                                                                    | Prepaid expenses and other current assets                                                 |                                           |         | 1,167    |         |         | 4,701   
|                                                                                                    | Other assets                                                                              |                                           |         | (46,261  | )       |         | (67,125 
|                                                                                                    | Accounts payable and other current liabilities                                            |                                           |         | 623,138  |         |         | 193,691 
|                                                                                                    | Income taxes payable and receivable                                                       |                                           |         | 76,148   |         |         | (11,574 
|                                                                                                    | Due to affiliates                                                                         |                                           |         | (90,996  | )       |         | 167,429 
|                                                                                                    | Other liabilities                                                                         |                                           |         | (17,196  | )       |         | (15,524 
|                                                                                                    |                                                                                           |                                           |         |          |         |         |         
|                                                                                                    |                                                                                           | Net cash provided by operating activities |         |          | 693,352 |         |         
|                                                                                                    |                                                                                           |                                           |         |          |         |         |         

See
notes to consolidated financial statements.

F5

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS FOR  EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000        (Thousands of U.S.
dollars)

|                                                         |  | 2000 |          | 1999 |   | 1998     |  
|-------------------------------------------------------- |  | ---- | -------- | ---- | - | -------- | -
|CASH FLOWS FROM INVESTING ACTIVITIES:                    |  |      |          |      |   |          |  
|Capital expenditures on property, plant and equipment    |  |      | (113,022 | )    |   | (254,356 | )
|Proceeds from sales of property, plant and equipment     |  |      | 4,427    |      |   | 16,501   |  
|Payment on note payable in joint venture                 |  |      |         |      |   |         |  
|Loans to affiliates                                      |  |      | 198      |      |   | 21,913   |  
|Proceeds from notes receivable from affiliates           |  |      | 250,000  |      |   | 10,000   |  
|Decrease in restricted cash                              |  |      | 3,015    |      |   | 6,421    |  
|Loans to LYONDELL.CITGO Refining LP                      |  |      | (7,023   | )    |   | (24,600  | )
|Investment in LYONDELL-CITGO - Refining LP               |  |      | (13,400  | )    |   |         |  
|Investments in and advances to other affiliates          |  |      | 155,861  |      |   | (48,716  | )
|Proceeds from sale of Petro-Chemical Transport           |  |      |         |      |   | 4,980    |  
|Cash of PDV Holding, Inc. and subsidiaries at sale       |  |      | (252,645 | )    |   |         |  
|                                                         |  |      |          |      |   |          |  
|Net cash provided by/(used in) investing activities      |  |      | 27,411   |      |   | (267,857 | )
|                                                         |  |      |          |      |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                    |  |      |          |      |   |          |  
|Net (repayments of) proceeds from revolving bank loans   |  |      | (462,000 | )    |   | 172,219  |  
|Net (repayments of) proceeds from short term bank loans  |  |      | (16,000  | )    |   | (21,000  | )
|Payments on term bank loan                               |  |      | (39,935  | )    |   | (39,935  | )
|Proceeds from issuance of senior notes                   |  |      |         |      |   | (25,000  | )
|Payments on UHS business purchase liability              |  |      |         |      |   | (6,427   | )
|Proceeds from issuance of taxable bonds                  |  |      |         |      |   | 25,000   |  
|(Payments on) proceeds from notes payable to affiliates  |  |      |         |      |   | (51,494  | )
|(Payments on) proceeds from issuance of tax-exempt bonds |  |      | (63,291  | )    |   |         |  
|Payments of capital lease obligations                    |  |      | (7,954   | )    |   | (14,660  | )
|Proceeds from issuance of bank note                      |  |      |         |      |   | (10,000  | )
|Repayments of other debt                                 |  |      | (5,329   | )    |   | (7,112   | )
|Payments on private placement senior notes               |  |      | (250,000 | )    |   |         |  
|Proceeds from return of capital                          |  |      |         |      |   | (23,900  | )
|                                                         |  |      |          |      |   |          |  
|Net cash used in financing activities                    |  |      | (844,509 | )    |   | (2,309   | )
|                                                         |  |      |          |      |   |          |  
|(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS         |  |      | (123,746 | )    |   | 58,319   |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR             |  |      | 145,919  |      |   | 87,600   |  
|                                                         |  |      |          |      |   |          |  
|CASH AND CASH EQUIVALENTS, END OF YEAR                   |  | $    | 22,173   |      | $ | 145,919  |  
|                                                         |  |      |          |      |   |          |  

See
notes to consolidated financial statements.

F6

---



PROPERNYN B.V. AND SUBSIDIARIES    CONSOLIDATED STATEMENTS OF CASH FLOWS FOR  EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000        (Thousands of U.S.
dollars)

|                                                                                                                      |                                      | 2000 |           | 1999    |   | 1998   
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ---- | --------- | ------- | - | -------
|SUPPLEMENTAL DISCLOSURE OF                                                                                            |                                      |      |           |         |   |        
|CASH FLOW INFORMATION:                                                                                                |                                      |      |           |         |   |        
|Cash paid during the year for:                                                                                        |                                      |      |           |         |   |        
|                                                                                                                      | Interest (net of amount capitalized) |      | $         | 140,898 |   | $      
|                                                                                                                      |                                      |      |           |         |   |        
|                                                                                                                      | Income taxes (net of refunds)        |      | $         | 55,459  |   | $      
|                                                                                                                      |                                      |      |           |         |   |        
|SUPPLEMENTAL SCHEDULE OF NONCASH                                                                                      |                                      |      |           |         |   |        
|INVESTING ACTIVITIES:                                                                                                 |                                      |      |           |         |   |        
|Investment in LYONDELL  CITGO Refining LP (Note 2)                                                                   |                                      |      |          |         | $ | (32,654
|                                                                                                                      |                                      |      |           |         |   |        
|Investment in the Sweeny joint venture through assumption of liability                                                |                                      |      |          |         |   |       
|                                                                                                                      |                                      |      |           |         |   |        
|Payment of expenses related to investment in the Sweeny joint venture through a capital contribution from parent      |                                      |      |          |         |   |       
|                                                                                                                      |                                      |      |           |         |   |        
|Sale of investment in PDV Holding, Inc. in exchange for set-off of loans payable and a distribution payable to Parent |                                      | $    | 3,315,100 |         |   |       
|                                                                                                                      |                                      |      |           |         |   |        

See
notes to consolidated financial statements.

F7

---



PROPERNYN B.V. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY FOR  EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000    
(Thousands of U.S. Dollars)

|                                          |  | Common
Stock |    | Additional
Capital |   | Retained
Earnings |  | Accumulated
Other
Comprehensive
Income/(Loss) |            | Total
Shareholder's
Equity |  
|----------------------------------------- |  | ------------ | -- | ------------------ | - | ----------------- |  | --------------------------------------------- | ---------- | -------------------------- | -
|BALANCE,                                  |  |              |    |                    |   |                   |  |                                               |            |                            |  
|JANUARY 1, 1998                           |  | $            | 62 |                    | $ | 107,532           |  | $                                             | 1,208,905  |                            | $
|Net income                                |  |              |   |                    |   |                  |  |                                               | 165,306    |                            |  
|Other comprehensive loss:                 |  |              |    |                    |   |                   |  |                                               |            |                            |  
|-Foreign currency translation adjustments |  |              |   |                    |   |                  |  |                                               |           |                            |  
|                                          |  |              |    |                    |   |                   |  |                                               |            |                            |  
|BALANCE,                                  |  |              |    |                    |   |                   |  |                                               |            |                            |  
|DECEMBER 31, 1998                         |  |              | 62 |                    |   | 107,532           |  |                                               | 1,374,211  |                            |  
|Net income                                |  |              |   |                    |   |                  |  |                                               | 160,753    |                            |  
|Other comprehensive income (loss):        |  |              |    |                    |   |                   |  |                                               |            |                            |  
|-Foreign currency translation adjustments |  |              |   |                    |   |                  |  |                                               |           |                            |  
|-Minimum pension liability adjustment     |  |              |   |                    |   |                  |  |                                               |           |                            |  
|                                          |  |              |    |                    |   |                   |  |                                               |            |                            |  
|BALANCE,                                  |  |              |    |                    |   |                   |  |                                               |            |                            |  
|DECEMBER 31, 1999                         |  |              | 62 |                    |   | 107,532           |  |                                               | 1,534,964  |                            |  
|Distribution                              |  |              |   |                    |   |                  |  |                                               | (1,667,265 | )                          |  
|Net income                                |  |              |   |                    |   |                  |  |                                               | 297,513    |                            |  
|Other comprehensive income (loss):        |  |              |    |                    |   |                   |  |                                               |            |                            |  
|-Foreign currency translation adjustments |  |              |   |                    |   |                  |  |                                               |           |                            |  
|-Minimum pension liability adjustment     |  |              |   |                    |   |                  |  |                                               |           |                            |  
|                                          |  |              |    |                    |   |                   |  |                                               |            |                            |  
|BALANCE,                                  |  |              |    |                    |   |                   |  |                                               |            |                            |  
|DECEMBER 31, 2000                         |  | $            | 62 |                    | $ | 107,532           |  | $                                             | 165,212    |                            | $
|                                          |  |              |    |                    |   |                   |  |                                               |            |                            |  

See notes to consolidated financial statements.

F8

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PROPERNYN B.V. AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of PresentationPropernyn B.V. (the "Company") is a Dutch Corporation and a wholly owned subsidiary of
Petróleos de Venezuela, S.A. ("PDVSA"), the national oil company of the Bolivarian Republic of Venezuela. The Company's wholly-owned subsidiaries include PDV Europa B.V. and
subsidiaries ("PDVE"), Propernyn N.V. and subsidiaries ("PNV") and Bonaire Petroleum Corporation N.V. ("BOPEC"). Prior to November 3, 2000, the Company was a wholly owned subsidiary of Venedu
Holding N.V. and prior to December 1, 2000, the Company held an investment in PDV Holding, Inc. ("PDVH"). See note below on significant events during 2000.

Description of BusinessThe Companies (as defined below) manufacture or refine and market quality transportation fuels as
well as lubricants, refined waxes, petrochemicals, asphalt and other industrial products. CITGO (as defined below) owns and operates two modern, highly complex crude oil refineries (Lakes Charles,
Lousiana, and Corpus Christi, Texas) and two asphalt refineries (Paulsboro, New Jersey, and Savannah, Georgia) with a combined aggregate rated crude oil refining capacity of 582 thousand
barrels per day ("MBPD"). CITGO also owns a minority interest in LYONDELL-CITGO Refining L.P., a limited partnership (formerly a limited liability company) that owns and operates a refinery in
Houston, Texas, with a rated crude oil refining capacity of 265 MBPD. CITGO also operates
a 167 MBPD refinery in Lemont, Illinois, owned by PDVMR (as defined below). CITGO's assets also include a 65% owned lubricant and wax plant, pipelines, and equity interests in pipeline companies and
petroleum storage terminals. Transportation fuel customers include primarily CITGO branded wholesale marketers, convenience stores and airlines located mainly east of the Rocky Mountains. Asphalt is
generally marketed to independent paving contractors on the East and Gulf Coasts and the Midwest of the Unites States. Lubricants are sold principally in the United States to independent marketers,
mass marketers and industrial customers. Petrochemical feedstocks and industrial products are sold to various manufacturers and industrial companies throughout the Unites States. Petroleum coke is
sold primarily in international markets.

PDV
Chalmette, Inc. (as defined below) acquired in October 1997 a 50% equity interest in a crude oil refinery in Chalmette, Louisiana, Chalmette Refining L.L.C.
("Chalmette"), for an initial cash investment of $52.5 million and incurred debt payable to the joint venture partner for $227.5 million, which was paid in full in July 1998. The
refinery has a rated crude oil refining capacity of 190 MBPD, and PDV Chalmette assigned to CITGO its option to purchase up to 50% of the refined products produced at the refinery, through
December 31, 2000. CITGO exercised this option on November 1, 1997 and acquired approximately 67 MBPD and 66 MBPD of refined products from the refinery in 2000 and 1999, respectively,
approximately one-half of which was gasoline.

PDV
Texas, Inc. and PDV Sweeny (as defined below) entered into an agreement on October 30, 1998 to acquire a combined 50% equity interest in an integrated vacuum/coker
facility under construction at Phillips' oil refinery in Sweeny, Texas, Merey Sweeny L.P. ("Sweeny joint venture"). The total cost of the facilities and improvements is estimated at
$538 million. The joint venture anticipates financing approximately 80% of this amount with debt. On June 18, 1999, the joint venture issued $350 million of 8.85% Senior bonds due
December 18, 2019. Remaining costs are expected to be funded through equity contributions. In connection with any financing, the partners have agreed that each will make, or cause to be made,
capital contributions to the Partnership on a pro rata joint-and-several basis to the extent necessary to cover costs prior to completion.

The
Company's Caribbean holdings (BOPEC and PNV) operate two transshipment facility sites; provide oil storage services for PDVSA affiliates and tug services for ships; operate land
tank storage facilities with an aggregate capacity of approximately 30 million barrels and sell oil products to the

F9

---

Bahamian domestic market. The Company's European holdings (PDVE) primarily purchase, and sell fuels especially for the European shipping market.

The
Company, through PDVE, has a 50 percent interest in Ruhr Oel GmbH ("Ruhr") which operates refineries in Germany that refines crude for its joint venture partners. PDVE also
has a 50 percent interest in AB Nynäs Petroleum ("Nynäs"), which produces and markets bitumen naphtenic specialties and other petroleum products for the European
market.

Significant events during 2000Effective November 3, 2000, the Company's former parent, Venedu Holding N.V.
("Venedu') sold and transferred its investment in the Company to PDVSA in exchange for forgiveness of debt and set-off of other obligations.

Effective
December 1, 2000, the Company sold and transferred all shares in PDVH to PDVSA for a purchase price of $3,315.1 million, in exchange for the
set-off of loans payable by the Company to PDVSA of $1,647.9 million and a set-off of a distribution payable to PDVSA on that date of $1,667.2 million. No gain or
loss arose upon sale, as the purchase price was equal to the carrying value of the Company's investment in PDVH at that date.

Information
summarizing the financial position of PDVH at the date of sale is as follows:

(000s Omitted)Current assets

$
2,918,121Noncurrent assets


5,367,195Current liabilities


2,242,204Noncurrent liabilities


2,727,995


Selected
financial information provided by PDVH, which summarizes the results of its consolidated operations that are included in the Company's consolidated statements of income, is
as follows (full year except for 2000, which is for the eleven months ended November 30, 2000):

2000

1999

1998(000s Omitted)Revenues

$
20,445,788

$
13,300,165

$
11,020,135Gross profit


778,963


503,529


714,600Net income


319,908


124,319


215,746


Use of U.S. GAAPThe consolidated financial statements have been prepared using accounting principles generally accepted in
the United States of America ("U.S. GAAP").

Principles of ConsolidationThe consolidated financial statements include the accounts of the Company, Propernyn N.V. and
its wholly-owned subsidiaries (Baproven Limited ("Baproven"), a Bahamian corporation and its subsidiaries, Bahamas Oil Refining Company International Limited, Borco Towing Company Limited, Freeport
Trading Company Limited (dormant) and Marine Agents and Brokers Limited (dormant)), Bonaire Petroleum Corporation ("BOPEC") N.V., PDV Europa B.V. and its wholly-owned subsidiaries (PDV Supply Europe
B.V., PDV Fuels The Netherlands B.V., N.V. PDV Fuels S.A.) and the results of operations and cash flows through November 30, 2000 of the Company's former subsidiary PDV Holding, Inc.
(and its wholly-owned subsidiaries PDV America, Inc. ("PDV
America") including CITGO Petroleum Corporation ("CITGO"), and CITGO's wholly-owned subsidiaries, Cit-Con Oil Corporation, which is 65% owned by CITGO and VPHI Midwest, Inc.
("Midwest") and its wholly-owned subsidiary, PDV Midwest Refining, L.L.C. ("PDVMR"), PDV Chalmette, Inc. and its 50% equity interest in Chalmette, PDV Texas, Inc. and its 50% equity
interest

F10

---

in Sweeny Coker L.L.C., the general partner which owns 1% of the Sweeny joint venture, and PDV Sweeny, Inc., and its 49.5% equity interest in the Sweeny joint venture), collectively referred to
as the "Companies". All material intercompany transactions and accounts have been eliminated.

The
Companies' investments in less than majority owned affiliates are accounted for by the equity method. The excess of the carrying value of the investments over the equity in the
underlying net assets of the affiliates is amortized on a straight-line basis over 40 years, which is based upon the estimated useful lives of the affiliates' assets.

Estimates, Risks and UncertaintiesThe preparation of financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The
Companies' operations can be influenced by domestic and international political, legislative, regulatory and legal environments. In addition, significant changes in the prices or
availability of crude oil and refined products could have a significant impact on the results of operations for any particular year.

Revenue RecognitionRevenue from sales of products is recognized upon transfer of title to products
sold, based upon the terms of delivery.

Foreign currenciesThe Company's functional and reporting currency is the U.S. dollar. The functional currency of the
Company's subsidiaries are also, with the exception of PDVE, the U.S. dollar. PDVE's balance sheets and income statements are recorded in Dutch guilders and are translated at the exchange rates in
effect at the balance sheet date and the average exchange rates during the year, respectively, with the cumulative translation adjustment included in accumulated other comprehensive income (loss), a
component of shareholder's equity. Other assets and liabilities denominated in currencies other than the U.S. dollar are translated at the exchange rate in effect at the balance sheet date and these
remeasurement gains and losses are included in operations, except for exchange differences on investments in the group companies and related financing thereof, which are included in the accumulated
other comprehensive income (loss).

Impairment of Long-Lived AssetsThe Companies periodically evaluate the carrying value of
long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the separately
identifiable anticipated undiscounted net cash flow from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the
fair value of the long-lived asset. Fair value is determined primarily using the anticipated net cash flows discounted at a rate commensurate with the risk involved. Losses on
long-lived assets to be disposed of are determined in a similar manner, except the fair market values are reduced for the disposal costs.

Supply and Marketing ActivitiesThe Companies engage in the buying and selling of crude oil to supply their refineries. The
net results of this activity are recorded in cost of sales. The Companies also engage in the buying and selling of refined products to facilitate the marketing of their refined products. The results
of this activity are recorded in cost of sales and sales.

Refined
product exchange transactions that do not involve the payment or receipt of cash are not accounted for as purchases or sales. Any resulting volumetric exchange balances are
accounted for as

F11

---

inventory in accordance with the Companies' last-in, first-out ("LIFO") method. Exchanges that are settled through payment or receipt of cash are accounted for as purchases or
sales.

Excise TaxesThe Companies collect excise taxes on sales of gasoline and other motor fuels. Excise taxes of approximately
$2.9 billion, $3.1 billion and $3.0 billion were collected from customers and paid to various governmental entities in 2000, 1999 and 1998, respectively. Excise taxes are not
included in sales.

Cash and Cash EquivalentsCash and cash equivalents consist of highly liquid short-term investments and bank
deposits with initial maturities of three months or less.

Restricted CashRestricted cash represents highly liquid short-term investments held in trust accounts in
accordance with a tax-exempt bond agreement. Funds are released solely for financing construction of environmental facilities as defined in the bond agreements.

InventoriesCrude oil and refined product inventories are stated at the lower of cost or market and cost is determined
using the LIFO method. Materials and supplies are valued using the average cost method.

Property, Plant and EquipmentProperty, plant and equipment are reported at cost, less accumulated depreciation.
Depreciation is based upon the estimated useful lives of the related assets using the straight-line method. Depreciable lives are generally as follows: buildings and
leasehold10 to 25 years; machinery and equipment3 to 25 years; and vehicles3 to 10 years.

Upon
disposal or retirement of property, plant and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized
in income.

The
Companies capitalize interest on projects when construction entails major expenditures over extended time periods. Such interest is allocated to property, plant and equipment and
amortized over the estimated useful lives of the related assets. Capitalized interest approximated $0, $7 million and $5 million in 2000, 1999 and 1998, respectively.

Commodity and Interest Rate DerivativesThe Companies use commodity and financial instrument derivatives to manage defined
interest rate and commodity price risks arising out of the Companies' core activities. The Companies have only limited involvement with other derivative financial instruments, and do not use them for
trading purposes.

The
Companies enter into petroleum futures contracts, options and other over-the-counter commodity derivatives, primarily to hedge a portion of the price risk
associated with crude oil and refined products. In order for a transaction to qualify for hedge accounting, the Companies require that the item to be hedged expose the Companies to price risk and that
the commodity contract reduces that risk and is designated as a hedge.

The
high correlation between price movements of a product and the commodity contract in that product is well demonstrated in the petroleum industry and, generally, the Companies rely
on those historical relationships and on periodic comparisons of market price changes to price changes of futures and options contracts accounted for as hedges. Gains or losses on contracts which
qualify as hedges are recognized when the related inventory is sold or the hedged transaction is consummated. Changes in the market value of commodity derivatives which are not hedges are recorded as
gains or losses in the period in which they occur.

The
Companies also enter into various interest rate swap agreements to manage their risk related to interest rate changes on their debt. Premiums paid for purchased interest rate swap
agreements are

F12

---

amortized to interest expense over the terms of the agreements. Unamortized premiums are included in other assets. The interest rate differentials received or paid by the Companies related to these
agreements are recognized as adjustments to interest expense over the term of the agreements. Gains or losses on terminated swap agreements are either amortized over the original term of the swap
agreement if the hedged borrowings remain in place or are recognized immediately if the hedged borrowings are no longer held.

In
June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133,Accounting for Derivative
Instruments and Hedging Activities("SFAS No. 133"). In
June 2000 Statement of Financial Accounting Standard No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging
Activities", an amendment of SFAS No. 133, was issued. The statement, as amended and interpreted, establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all derivatives, at fair value, as either assets or liabilities in the statement of financial position with an offset
either to shareholder's equity and other comprehensive income or income depending upon the classification of the derivative. The Company adopted SFAS No. 133 effective January 1, 2001.
Management believes that the adoption had no impact on the Companies' financial position, results of operations and cash flows as the Companies had no derivatives at that date.

Refinery MaintenanceCosts of major refinery turnaround maintenance are charged to operations over the estimated period
between turnarounds. Turnaround periods range approximately from one to eight years. Unamortized costs are included in other assets.

Amortization
of refinery turnaround costs is included in depreciation and amortization expense. Amortization was $62 million, $58 million and $58 million for
2000, 1999 and 1998, respectively. Ordinary maintenance is expensed as incurred.

The
American Institute of Certified Public Accountants has issued a "Statement of Position" exposure draft on cost capitalization that is expected to require companies to expense the
non-capital portion of major maintenance costs as incurred. The statement is expected to require that any existing deferred non-capital major maintenance costs be expensed
immediately. The exposure draft indicates that this change will be required to be adopted for years beginning after December 15, 2001, and will be reported as a cumulative effect of an
accounting change in the consolidated statements of income and comprehensive income. At December 31, 2000, the Company had no turnaround costs.

Environmental ExpendituresEnvironmental expenditures that relate to current or future revenues are expensed or capitalized
as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed. Liabilities are recorded when
environmental assessments and/or cleanups are probable, and the costs can be reasonably estimated. Environmental liabilities are not discounted to their present value. Subsequent adjustments to
estimates, to the extent required, may be made as more refined information becomes available.

Income TaxesThe Company and PDVE file a consolidated tax return in the Netherlands; all other subsidiaries
generally file individual local income tax returns. PDVH files a consolidated U.S. Federal income tax return which includes all of its wholly-owned subsidiaries. The Company accounts for income taxes
using an asset and liability approach, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes".

F13

---

ReclassificationsCertain reclassifications have been made to the 1998 and 1999 financial statements to conform with the
classifications used in 2000.

2. INVESTMENT IN LYONDELL-CITGO REFINING COMPANY LTD.

LYONDELL-CITGO Refining LP ("LYONDELL-CITGO") owns and operates a 265 MBPD refinery in Houston, Texas and is owned by subsidiaries of CITGO (41.25%) and
Lyondell Chemical Company (58.75%) ("the Owners"). This refinery processes heavy crude oil supplied by PDVSA under a long-term supply contract that expires in 2017. CITGO purchases
substantially all of the gasoline, diesel and jet fuel produced at the refinery under a long-term contract (Note 3).

In
April 1998, PDVSA, pursuant to its contractual rights, declared force majeure and reduced deliveries of crude oil to LYONDELL-CITGO; this required LYONDELL-CITGO to obtain
alternative sources of crude oil supply in replacement, which resulted in lower operating margins. On October 1, 2000, the force majeure condition was terminated and PDVSA deliveries of crude
oil returned to contract levels.

On
December 31, 1999, CITGO converted $32.7 million of $60.0 million of outstanding loans to investments in LYONDELL-CITGO. The loans bore interest at market
rates which were approximately 6.9% at November 30, 2000 and 6.7% and 5.9% at December 31, 1999 and 1998.

CITGO
accounts for its investment in LYONDELL-CITGO using the equity method of accounting and records its share of the net earnings of LYONDELL-CITGO based on allocations of income
agreed to by the owners. Information related to CITGO's investment in LYONDELL-CITGO is as follows:

|                                                                                                                  |                        | 2000 |        | 1999      |   | 1998    |          
|----------------------------------------------------------------------------------------------------------------- | ---------------------- | ---- | ------ | --------- | - | ------- | ---------
|
|Carrying value of investment at December 31                                                                       |                        | $    |       |           | $ | 560,227 |          
|Notes receivable at December 31                                                                                   |                        |      |       |           |   | 28,255  |          
|Participation interest at December 31                                                                             |                        |      |       |           |   | 41      | %        
|Equity in net income                                                                                              |                        |      | 31,769 |           |   | 924     |          
|Cash distributions received                                                                                       |                        |      | 78,506 |           |   | 70,724  |          
|Summary of financial position at December 31:                                                                     |                        |      |        |           |   |         |          
|                                                                                                                  | Current assets         |      | $      |          |   | $       | 219,000  
|                                                                                                                  | Noncurrent assets      |      |        |          |   |         | 1,406,000
|                                                                                                                  | Current liabilities    |      |        |          |   |         | 697,000  
|                                                                                                                  | Noncurrent liabilities |      |        |          |   |         | 316,000  
|                                                                                                                  | Member's equity        |      |        |          |   |         | 612,000  
|Summary of operating results (full year except for 2000, which is for the eleven months ended November 30, 2000): |                        |      |        |           |   |         |          
|                                                                                                                  | Revenue                |      | $      | 3,718,000 |   | $       | 2,571,000
|                                                                                                                  | Gross profit           |      |        | 213,000   |   |         | 133,000  
|                                                                                                                  | Net income             |      |        | 102,000   |   |         | 24,000   

F14

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PROPERNYN B.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. RELATED PARTY TRANSACTIONS

CITGO purchases approximately one-half of the crude oil processed in its refineries from subsidiaries of PDVSA under long-term supply
agreements. These supply agreements extend through the year 2006 for the Lake Charles refinery, 2010 for the Paulsboro refinery, 2012 for the Corpus Christi refinery and 2013 for the Savannah
refinery. CITGO purchased $3.0 billion, $1.7 billion and $1.4 billion of crude oil, feedstocks and other products from wholly-owned subsidiaries of PDVSA in 2000
(11 months), 1999 and 1998, respectively, under these and other purchase agreements. During 2000 and 1999, PDVSA deliveries of crude oil to CITGO were less than contractual base volumes due to
the PDVSA declaration of force majeure pursuant to all four long-term crude oil supply contracts described above. As a result, CITGO has been required to obtain alternative sources of
crude oil, which has resulted in lower operating margins. On October 1, 2000, the force majeure condition was terminated and PDVSA deliveries of crude oil returned to contract levels.

Additionally,
during the second half of 1999, PDVSA did not deliver naptha pursuant to one of the contracts and has made contractually specified payments in lieu thereof.

The
crude oil supply contracts incorporate formula prices based on the market value of a number of refined products deemed to be produced from each particular crude oil, less
(i) certain deemed refining costs adjustable for inflation, (ii) certain actual costs, including transportation charges, import duties and taxes and (iii) a deemed margin, which
varies according to the grade of crude oil. At December 31, 2000
and 1999, $0 and $178 million, respectively, were included in payables to affiliates as a result of these transactions.

In
October 1998, an affiliate of PDVSA acquired a 50% equity interest in a joint venture that owns and operates a refinery in St. Croix, U.S. Virgin Islands ("HOVENSA") and has
the right under a product sales agreement to assign periodically to CITGO, or other related parties, its option to purchase 50% of the refined products produced by HOVENSA (less a certain portion of
such products that HOVENSA will market directly in the local and Caribbean markets). In addition, under the product sales agreement, the PDVSA affiliate has appointed CITGO as its agent in designating
which of its affiliates shall from time to time take deliveries of the refined products available to it. The product sales agreement will be in effect for the life of the joint venture, subject to
termination events based on default or mutual agreement. Pursuant to the above arrangement, on November 1, 1998 CITGO began acquiring approximately 122 MBPD and 118 MBPD of refined products
from HOVENSA during 2000 (11 months) and 1999, respectively, approximately one-half of which was gasoline.

CITGO
also purchases refined products from various other affiliates including LYONDELL-CITGO, HOVENSA and CHALMETTE under long-term contracts. These agreements incorporate
various formula prices based on published market prices and other factors. Such purchases totaled $4.0 billion, $2.8 billion and $1.7 billion for 2000 (11 months), 1999 and
1998, respectively. At December 31, 2000 and 1999, $0 and $118 million was included in payables to affiliates as a result of these transactions.

CITGO
had refined product, feedstock, and other product sales of $187 million, $190 million and $164 million to affiliates in 2000 (11 months), 1999 and
1998, respectively. CITGO' sales of crude oil to affiliates of $4 million, $37 million and $18 million in 2000, (11 months) 1999 and 1998, respectively. At
December 31, 2000 and 1999, approximately $0 and $13 million, respectively, were included in due from affiliates as a result of these and related transactions.

F15

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Pursuant to a refinery agreement with PDVMR, on May 1, 1997, CITGO has been appointed operator of the PDVMR refinery. The term of the agreement is 60 months and shall be
automatically renewed for periods of 12 months (subject to early termination as provided in the agreement).

PDVMR
is party to a Contract For Purchase and Sale of Crude Oil dated April 23, 1997, with Maraven S.A. ("Maraven"), a corporation organized and existing, at the date of the
contract, under the laws of the Bolivarian Republic of Venezuela, and CITGO. In accordance with the contract, Maraven (or its successor) is obligated to provide a base volume of up 100,000 barrels per
day of Venezuelan crude and CITGO as operator is responsible for administering the purchase of additional volume of crude for the refinery. The Venezuelan crude is priced in accordance with a formula
based upon posted crude prices less a quality differential. Maraven (or its successor), CITGO and PDVMR can change the amount and type of crude supplied. The term of the agreement is sixty months with
renewal periods of twelve months. PDVMR purchased approximately 13,000 barrels per day and 31,000 barrels per day under this contract in 2000 (11 months) and 1999, respectively.

PDVMR
sells certain refinery by-products and utilities to The Needle Coker Company ("Needle") and buys back hydrogen, naphtha and steam. Sales to Needle were approximately
$10 million and $9 million in 2000 (11 months) and 1999, respectively. Purchases from Needle were approximately $8 million and $6 million in 2000 (11 months)
and 1999, respectively.

During
1995, PDV America entered into a service agreement with PDVSA to provide financial and foreign agency services. Income from these services was $0, $0.9 million and
$1.7 million in 2000 (11 months), 1999 and 1998, respectively.

Under
a separate guarantee of rent agreement, PDVSA has guaranteed payment of rent, stipulated loss value and terminating value due under the lease of the Corpus Christi refinery
facilities described in Note 14.

Notes
receivable from affiliates consist of the following:

The
notes receivable from PDVSA are unsecured and are comprised of $250 million 7.75% notes maturing on one business day prior to August 1, 2000 and $500 million
of 7.995% notes maturing on one business day prior to August 1, 2003. Interest on these notes is payable semi-annually by PDVSA to PDV America on February 1 and
August 1 of each year, less one business day. Interest income attributable to such notes was approximately $48 million and $59 million for 2000 (11 months) and 1999,
respectively,
with approximately $0 and $25 million included in due from affiliates at December 31, 2000 and 1999, respectively.

The
notes receivable from PDVSA Finance, Ltd. are unsecured and are comprised of two $130 million of 8.558% notes maturing on November 10, 2013 and a
$38 million 10.395% note maturing May 15, 2014. Interest on these notes is payable quarterly. Interest income attributable to such notes was approximately $24 million and
$24 million for 2000 (11 months) and 1999, respectively, with approximately $0 and $4 million included in due from affiliates at December 31, 2000 and 1999, respectively.

The
note receivable from PDVSA V.I., Inc. is unsecured and consists of a $50 million note with an interest rate based on the terms of the note payable by PDV
Holding, Inc. in an equal amount to the Lenders (Note 10). Principal is due in five equal installments, each payable on the anniversary of the issue date (December 29, 1998), less
one business day. Interest is payable by PDVSA V.I., Inc. to PDV

F16

---

Holding, Inc. based on the terms of the note payable to the Lenders, less one business day, starting June 28, 1999. The principal balance included in notes receivable as of
December 31, 2000 and 1999 is $0 and $         40 million, respectively. Due to the related party nature of these notes receivable, it is not practicable to estimate their fair
value.

In
2000 the Company made loans to PDVSA and affiliates for a total amount of $116.9 million. The loans bear no interest and are payable upon demand in United States dollars.
The principal balance of the loans receivable was $116,9 million at December 31, 2000.

In
1992, a service agreement between PDVE and PDVSA Marketing International S.A. ("PMI") was established. Based on this agreement, PDVE will provide PMI with support and assistance
regarding its European activities. The service fees paid by PMI are based on a fixed and reimbursable basis. In 2000, 1999 and 1998 the compensation service fees were $2.0 million,
$1.8 million and $2.2 million, respectively. At December 31, 2000 and 1999, $3.0 million was included in due from affiliates.

Ruhr
owns refineries, which are operated for the benefit of its joint venture partners. Crude is supplied by the partners and the resulting products are returned to the partners. Ruhr
receives a fee equal to its operational costs.

Baproven
Limited ("Baproven"), a subsidiary of PNV, had purchases of approximately $2 million, $1 million and $1 million and sales of storage and ancillary
services of approximately $18.6 million, $15.3 million and $15 million with affiliates during 2000, 1999 and 1998, respectively.

BOPEC
had sales of services regarding tank storage (and related activities) and marine activities to PDVSA and its subsidiaries approximating $8.7 million, $8.4 million
and $7.4 million during 2000, 1999 and 1998, respectively. At December 31, 2000 and 1999, $1.5 million and $0.5 million, respectively, are included in due from affiliates.

4. ACCOUNTS RECEIVABLE

|                                          |  | 2000 |       | 1999 |  
|----------------------------------------- |  | ---- | ----- | ---- | -
|
|Trade                                     |  | $    | 2,998 |      | $
|Credit card                               |  |      |      |      |  
|Other                                     |  |      | 863   |      |  
|                                          |  |      |       |      |  
|                                          |  |      | 3,861 |      |  
|Less allowance for uncollectible accounts |  |      | (617  | )    |  
|                                          |  |      |       |      |  
|                                          |  | $    | 3,244 |      | $
|                                          |  |      |       |      |  

Allowances
for uncollectible accounts are established based on several factors, that include, but are not limited to, analysis of specific customers, historical trends, current
economic conditions and other information. CITGO sales were made on account, based on pre-approved unsecured credit terms established by CITGO management. CITGO also has a proprietary
credit card program, which allows commercial customers to purchase fuel at CITGO branded outlets.

F17

---

CITGO has two new limited purpose subsidiaries, CITGO Funding Corporation and CITGO Funding Corporation II, which have nonrecourse agreements to sell trade accounts and credit card
receivables. Under the terms of the agreements, new receivables are added to the pool as collections reduce previously sold receivables. The amounts sold at any one time are limited to a maximum of
$225 million
of trade accounts receivable (increased from $125 million through an amendment in April 2000) and $150 million of credit card receivables. Fees and expenses of
$16.2 million, $15.2 million and $16.1 million related to the agreements were recorded as other expense during 2000 (11 months), 1999 and 1998, respectively. In 2000, CITGO
realized a gain of $5 million resulting from the reversal of the allowance for uncollectible accounts related to certain receivables sold.

5. INVENTORIES

|                       |  | 2000 |        | 1999
|---------------------- |  | ---- | ------ | ----
|
|Refined product        |  | $    | 1,782  |     
|Crude oil              |  |      | 8,088  |     
|Materials and supplies |  |      | 3,661  |     
|                       |  |      |        |     
|                       |  | $    | 13,531 |     
|                       |  |      |        |     

6. PROPERTY, PLANT AND EQUIPMENT

|                                               |  | 2000 |          | 1999 |  
|---------------------------------------------- |  | ---- | -------- | ---- | -
|
|Land                                           |  | $    | 21,637   |      | $
|Building and leaseholds                        |  |      | 2,300    |      |  
|Machinery and equipment                        |  |      | 290,474  |      |  
|Vehicles                                       |  |      |         |      |  
|Office furniture and equipment                 |  |      | 998      |      |  
|Construction in process                        |  |      | 2,803    |      |  
|                                               |  |      |          |      |  
|                                               |  |      | 318,212  |      |  
|                                               |  |      |          |      |  
|Less accumulated depreciation and amortization |  |      | (193,706 | )    |  
|                                               |  |      |          |      |  
|                                               |  | $    | 124,506  |      | $
|                                               |  |      |          |      |  

Depreciation
expense for 2000, 1999 and 1998 was $218 million, $230 million and $219 million, respectively.

Other
income (expense)-net includes gains and losses on disposals and retirements of property, plant and equipment. Such net losses were approximately $10 million,
$18 million, and $2 million in 2000, 1999, and 1998, respectively.

F18

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7. INVESTMENT IN AFFILIATES

No investment in affiliates balances are included in the consolidated balance sheet at December 31, 2000 for CITGO, PDVMR, PDV Sweeny and PDV Texas as
the Company had sold all its shares in PDVH to PDVSA on December 1, 2000 (see Note 1).

CITGOIn addition to LYONDELL-CITGO (Note 2), CITGO's investments in affiliates consist of equity interests of 6.8
to 50 percent in joint interest pipelines and terminals, including a 15.79 percent interest in Colonial Pipeline Company; a 49.5 percent partnership interest in Nelson Industrial
Steam Company ("NISCO"), which is a qualified cogeneration facility; and a 49 percent partnership interest in Mount Vernon Phenol Plant. The carrying value of these investments exceeded CITGO's
equity in the underlying net assets by approximately $143 million at December 31, 1999.

At
December 31, 1999, CITGO's share of NISCO'S partnership deficit, as a general partner, was $60.3 million, which is included in other noncurrent liabilities in the
accompanying consolidated balance sheets.

Information
on CITGO's investments, including LYONDELL-CITGO, included in the company's consolidated financial statements, is as follows:

|                                                           |  | 2000 |         | 1999 |   | 1998   
|---------------------------------------------------------- |  | ---- | ------- | ---- | - | -------
|
|Investments in affiliates (excluding NISCO) at December 31 |  | $    |        |      | $ | 734,822
|Equity in net income of affiliates                         |  |      | 44,170  |      |   | 21,348 
|Dividends and distributions received from                  |  |      |         |      |   |        
|affiliates                                                 |  |      | 101,987 |      |   | 102,339

Selected
financial information provided by the affiliates is summarized as follows:

|                                                                                                                  |                        | 2000 |   | 1999      |  | 1998
|----------------------------------------------------------------------------------------------------------------- | ---------------------- | ---- | - | --------- |  | ----
|
|Summary of financial position at December 31:                                                                     |                        |      |   |           |  |     
|                                                                                                                  | Current assets         |      | $ |          |  | $   
|                                                                                                                  | Noncurrent assets      |      |   |          |  |     
|                                                                                                                  | Current liabilities    |      |   |          |  |     
|                                                                                                                  | Noncurrent liabilities |      |   |          |  |     
|Summary of operating results (full year except for 2000, which is for the eleven months ended November 30, 2000): |                        |      |   |           |  |     
|                                                                                                                  | Revenues               |      | $ | 4,717,667 |  | $   
|                                                                                                                  | Gross profit           |      |   | 638,293   |  |     
|                                                                                                                  | Net income             |      |   | 297,259   |  |     

PDVMRPDVMR has a 25% interest in Needle, which is accounted for using the equity method. PDVMR received cash distributions
of approximately $0.3 million, $3.0 million and $6.5 million in 2000, 1999 and 1998, respectively, from Needle. The carrying value of this investment was $         
23.9 million at December 31, 1999 and exceeded PDVMR's equity in the underlying net assets by approximately $5.7 million at that date.

F19

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PROPERNYN B.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. INVESTMENT IN AFFILIATES (Continued)

Selected
financial information, provided by Needle is shown below:

|                                                                                                                  |                        | 2000 |   | 1999   |  | 1998
|----------------------------------------------------------------------------------------------------------------- | ---------------------- | ---- | - | ------ |  | ----
|
|Summary of financial position at December 31:                                                                     |                        |      |   |        |  |     
|                                                                                                                  | Current assets         |      | $ |       |  | $   
|                                                                                                                  | Noncurrent assets      |      |   |       |  |     
|                                                                                                                  | Current liabilities    |      |   |       |  |     
|                                                                                                                  | Noncurrent liabilities |      |   |       |  |     
|Summary of operating results (full year except for 2000, which is for the eleven months ended November 30, 2000): |                        |      |   |        |  |     
|                                                                                                                  | Revenues               |      | $ | 67,769 |  | $   
|                                                                                                                  | Gross profit           |      |   | 3,636  |  |     
|                                                                                                                  | Net earnings           |      |   | 168    |  |     

PDV ChalmettePDV Chalmette has a 50% interest in Chalmette refinery, which is accounted for using the equity method.

Information
included in the Company's consolidated financial statements provided by PDV Chalmette is as follows:

|                                                    |  | 2000 |        | 1999 |   | 1998    |  
|--------------------------------------------------- |  | ---- | ------ | ---- | - | ------- | -
|
|Investment in affiliate at December 31:             |  | $    |       |      | $ | 251,136 |  
|Equity in net income (loss) of affiliate            |  |      | 21,880 |      |   | (27,585 | )
|Dividends and distributions received from affiliate |  |      |       |      |   |        |  

Selected
financial information included in the Company's consolidated financial statements provided by the PDV Chalmette is summarized as follows:

|                                                                                                                  |                        | 2000 |   | 1999      |  | 1998 |          
|----------------------------------------------------------------------------------------------------------------- | ---------------------- | ---- | - | --------- |  | ---- | ---------
|
|Summary of financial position at December 31:                                                                     |                        |      |   |           |  |      |          
|                                                                                                                  | Current assets         |      | $ |          |  | $    | 163,884  
|                                                                                                                  | Noncurrent assets      |      |   |          |  |      | 497,470  
|                                                                                                                  | Current liabilities    |      |   |          |  |      | 196,375  
|                                                                                                                  | Noncurrent liabilities |      |   |          |  |      | 3,560    
|Summary of operating results (full year except for 2000, which is for the eleven months ended November 30, 2000): |                        |      |   |           |  |      |          
|                                                                                                                  | Revenues               |      | $ | 1,908,036 |  | $    | 1,295,101
|                                                                                                                  | Gross profit           |      |   | 325,024   |  |      | 5,270    
|                                                                                                                  | Net income (loss)      |      |   | 43,760    |  |      | (94,285  

Inventories
of Chalmette at December 31, 1998 were carried at estimated net market value which was $40.8 million lower than cost. Chalmette incorporated this writedown
into the carrying value of its inventory layers, creating a new basis which, under Chalmette's accounting policy, will remain until such

F20

---

layers are liquidated under the LIFO-method of accounting. During 1999 the physical units of inventory for which the reserve had been provided were sold. The Company's accounting policies
with respect to lower of cost or market reserves is to match the new basis of revalued inventories with sales of the actual physical units that were revalued. Accordingly, for the year ended
December 31, 1999 the Company recorded equity in the net loss of Chalmette of approximately $20.4 million less than its share of net loss reported by Chalmette. Furthermore, at
December 31, 1999, the Company's investment in Chalmette was approximately $20.4 million more than its share of the equity reported by Chalmette at that date.

PDV Sweeny and PDV TexasPDV Sweeny and PDV Texas have a combined 50% interest in the Sweeny joint venture, which is
accounted for using the equity method.

Information
included in the Company's consolidated financial statements for PDV Sweeny's and PDV Texas' combined investment is as follows:

|                                         |  | 2000 |        | 1999 |   | 1998  
|---------------------------------------- |  | ---- | ------ | ---- | - | ------
|
|Investment in affiliate at December 31   |  | $    |       |      | $ | 30,118
|Equity in net (loss) income of affiliate |  |      | (1,448 | )    |   | (1,793

Selected
financial information included in the Company's consolidated financial statements, provided by the affiliate is summarized as follows:

|                                                                                                                 |                        | 2000. |   | 1999.  |   | 1998
|---------------------------------------------------------------------------------------------------------------- | ---------------------- | ----- | - | ------ | - | ----
|
|Summary of financial position:                                                                                   |                        |       |   |        |   |     
|                                                                                                                 | Current assets         |       | $ |       |   | $   
|                                                                                                                 | Noncurrent assets      |       |   |       |   |     
|                                                                                                                 | Current liabilities    |       |   |       |   |     
|                                                                                                                 | Noncurrent liabilities |       |   |       |   |     
|Summary of operating results (full year except for 2000, which is for the eleven month ended November 30, 2000): |                        |       |   |        |   |     
|                                                                                                                 | Revenues               |       |   | 68,401 |   |     
|                                                                                                                 | Net (loss) income      |       |   | (2,897 | ) |     

PDVEIn accordance with Dutch custom, if an investment is accounted for under the equity method of accounting, a
non-distributable statutory reserve must be formed for the equity of net income of entities in which those interests are held. The statutory reserve is reduced by the dividends to which
the investor is entitled, or which can be collected without restriction in the Netherlands. The amount of
non-distributable statutory reserves at December 31, 2000, 1999 and 1998 were $54 million, $40 million and $51 million, respectively.



The Ruhr joint venture owns and operates four refineries in Germany for the benefit of the joint venture partners. Under the agreements with the joint venture
partners, Ruhr is reimbursed for the actual cost of refining, designed to achieve no profit or loss at Ruhr. The Company's investment in

F21

---

Ruhr at December 31, 2000, 1999 and 1998 was $130 million, $180 million and $215 million, respectively.

Financial
information of Ruhr is as follows:

|                                              |                        | 2000 |   | 1999    |  | 1998
|--------------------------------------------- | ---------------------- | ---- | - | ------- |  | ----
|
|Summary of financial position at December 31: |                        |      |   |         |  |     
|                                              | Current assets         |      | $ | 188,550 |  | $   
|                                              | Noncurrent assets      |      |   | 601,797 |  |     
|                                              | Current liabilities    |      |   | 171,696 |  |     
|                                              | Noncurrent liabilities |      |   | 359,423 |  |     
|Summary of operating results (full year):     |                        |      |   |         |  |     
|                                              | Revenues               |      | $ | 751,986 |  | $   
|                                              | Gross profit           |      |   | 652,175 |  |     
|                                              | Net income             |      |   | 2,266   |  |     

Under
a crude oil supply agreement, Ruhr processed $2.5 billion, $1.7 billion and $1.5 billion of crude oil owned by a wholly-owned subsidiary of PDVSA in 2000,
1999 and 1998, respectively.



Nynäs owns and operates four specialized refineries and owns a 50% interest in a specialized asphalt refinery, all designed to process heavy,
sour crude oil into asphalt and naphtenic specialty oils. Other information provided by Nynäs is as follows:

|                                   |  | 2000 |        | 1999 |   | 1998  
|---------------------------------- |  | ---- | ------ | ---- | - | ------
|
|Investment in Nynäs at December 31 |  | $    | 75,769 |      | $ | 69,349
|Equity in net income               |  |      | 16,120 |      |   | 8,942 
|Distributions received from Nynäs  |  |      | 7,850  |      |   | 8,239 

Financial
information of Nynäs is as follows:

|                                              |                        | 2000 |   | 1999    |  | 1998
|--------------------------------------------- | ---------------------- | ---- | - | ------- |  | ----
|
|Summary of financial position at December 31: |                        |      |   |         |  |     
|                                              | Current assets         |      | $ | 258,984 |  | $   
|                                              | Noncurrent assets      |      |   | 200,687 |  |     
|                                              | Current liabilities    |      |   | 161,776 |  |     
|                                              | Noncurrent liabilities |      |   | 148,721 |  |     
|Summary of operating results (full year):     |                        |      |   |         |  |     
|                                              | Revenues               |      | $ | 740,793 |  | $   
|                                              | Gross profit           |      |   | 196,483 |  |     
|                                              | Net income             |      |   | 37,762  |  |     

F22

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Under
a long-term crude oil supply agreement and vessel transportation contracts, Nynäs purchased $         145 million, $235 million
and $247 million of crude oil from a wholly-owned subsidiary of PDVSA in 2000, 1999 and 1998, respectively. The terms and pricing formulas are similar to the Company's subsidiaries' crude oil
supply agreements (Note 3).

8. SHORT-TERM BANK LOANS

As of December 31, 1999, CITGO has established $182 million of uncommitted, unsecured, short-term borrowing facilities with various
banks. Interest rates on these facilities are determined daily based upon the Federal funds' interest rates, and maturity options vary up to 30 days. The weighted average interest rates
actually incurred in 2000 and 1999, were 6.4% and 5.5% respectively. CITGO had approximately $16 million of borrowings outstanding under these facilities at December 31, 1999. No CITGO
outstanding borrowings are included in the consolidated balance sheet at December 31, 2000 as the Company had sold all its shares in PDVH to PDVSA on December 1, 2000 (see
Note 1).

9. LONG-TERM DEBT

|                                                                                              |  | 2000 |   | 1999 |  
|--------------------------------------------------------------------------------------------- |  | ---- | - | ---- | -
|
|Revolving bank loansCITGO                                                                    |  | $    |  |      | $
|Revolving bank loanPDVMR                                                                     |  |      |  |      |  
|Term bank loan, due 2003 with a variable interest rate                                        |  |      |  |      |  
|Senior Notes $200 million face amount, due 2006 with
interest rate of 7.875%                  |  |      |  |      |  
|Senior Notes due 2003 with interest rate of 7.875%                                            |  |      |  |      |  
|Private Placement Senior Note, due 2000 to 2006 with                                          |  |      |   |      |  
|interest rates from 9.03% to 9.30%                                                            |  |      |  |      |  
|Master Shelf Agreement Senior Notes, due 2002 to 2009 with interest rates from 7.17% to 8.94% |  |      |  |      |  
|Tax Exempt Bonds, due 2004 to 2029 with variable and fixed interest rates                     |  |      |  |      |  
|Taxable Bonds, due 2026 to 2028 with variable interest rates                                  |  |      |  |      |  
|Cit-Con bank credit agreement                                                                 |  |      |  |      |  
|                                                                                              |  |      |   |      |  
|                                                                                              |  |      |  |      |  
|Current portion of long-term debt                                                             |  |      |  |      |  
|                                                                                              |  |      |   |      |  
|                                                                                              |  | $    |  |      | $
|                                                                                              |  |      |   |      |  

As
discussed in Note 1, effective December 1, 2000 the Company sold and transferred all shares in PDVH to PDVSA. Consequently, the Company had no
long-term debt related to PDVH and subsidiaries at December 31, 2000.

Revolving Bank Loans (CITGO)CITGO's credit agreement with various banks consists of: (i) a $400 million,
five year, revolving bank loan maturing in May 2003 and (ii) a $150 million, 364 days, revolving bank loan, both of which are unsecured and have various borrowing
maturities and interest rate options. Interest rates on the revolving bank loans was 7.8% at December 31, 1999.

F23

---

PROPERNYN B.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. LONG-TERM DEBT (Continued)

Revolving Bank Loans (PDVMR)PDVMR has a revolving credit facility with a consortium of banks which is committed through
April 28, 2002 and allowed for borrowings up to $125 million at December 31, 1999. Inventories and accounts receivable of PDVMR are pledged as collateral. The weighted average
interest rate at December 31, 1999, was 7.58%.

Term Bank LoanOn December 30, 1998, PDVH obtained a $50 million term loan from the lenders listed in a
credit agreement dated December 29, 1998 (the "Lenders"). The loan matures on December 29, 2003. Principal is due in five equal annual installments of $10 million on each
December 29th through 2003. Interest is based, at the PDVH's discretion, on either a one, two, three, six or twelve-month period and on either the Eurodollar or bank's borrowing rates plus
applicable margin (7.03% for the six-month period from June 29, 2000 through December 29, 2000). Interest is payable in arrears on the last day of each interest period, if
PDVH selects an interest period longer than six months, interest would be payable on the last business day of each quarter during such interest period.

Shelf RegistrationIn April 1996, CITGO filed a registration statement with the Securities and Exchange Commission
relating to the shelf registration of $600 million of debt securities that may be offered and sold from time to time. In May 1996, the registration became effective and CITGO sold a
tranche of debt securities with an aggregate offering price of $200 million. On October 28, 1997, CITGO entered into a Selling Agency Agreement with Salomon Brothers Inc. and
Chase Securities Inc. providing for the sale of up to an additional $235 million in aggregate principal amount of notes in tranches from time to time by CITGO under the shelf
registration. No amounts were sold under this agreement through December 1, 2000.

Senior Notes due 2003In August 1993, PDV America issued $1 billion principal amount of Senior Notes (the
"Senior Notes") with interest rates ranging from 7.25 to 7.875% with due dates ranging from 1998 to 2003. Interest on the Senior Notes is payable semi-annually, commencing
February 1, 1994. The Senior Notes represent senior unsecured indebtedness of PDV America, and are structurally subordinated to the liabilities of PDV America's subsidiaries. The Senior Notes
are guaranteed by Propernyn B.V. and PDVSA.

Private PlacementAt December 31, 1999, CITGO had outstanding approximately $137 million of privately placed,
unsecured Senior Notes. Principal amounts are payable in annual installments in November and interest is payable semi-annually in May and November.

Master Shelf AgreementAt December 31, 1999, CITGO had issued $260 million of privately placed senior notes
under an unsecured Master Shelf Agreement with an insurance company. The notes have various fixed interest rates and maturities.

Tax-Exempt BondsAt December 31, 1999 through state entities, CITGO had issued $74.8 million of
industrial development bonds for certain Lake Charles port facilities and pollution control equipment and $231 million of environmental revenue bonds to finance a portion of environmental
facilities at its Lake Charles and Corpus Christi refineries and at the LYONDELL-CITGO refinery. Additional credit support for these bonds is provided through letters of credit. The bonds bear
interest at various floating rates, which ranged from 4.5 to 6% at December 31, 1999.

F24

---

PDVMR has issued $19.8 million of variable rate pollution control bonds, with interest currently paid monthly. The bonds have one payment at maturity in the year 2008 to retire
the principal, and principal and interest payments are guaranteed by a $20.3 million letter of credit.

Taxable BondsThrough state entities, as of December 31, 1999 CITGO issued $178 million of taxable
environmental revenue bonds to finance a portion of CITGO's environmental facilities at its Lake Charles refinery and at the LYONDELL-CITGO refinery. Such bonds are secured by letters of credit and
have floating interest rates (6.1% at December 31, 1999). At the option of CITGO and upon the occurrence of certain specified conditions, all or any portion of such taxable bonds may be
converted to tax-exempt bonds. As of December 31, 1999, $17 million of originally issued taxable bonds had been converted to tax-exempt bonds.

Cit-Con Bank Credit AgreementThe Cit-Con bank credit agreement consists of a term loan
collateralized by throughput agreements of the owner companies. The loan contains various interest rate options, (weighted average effective rates of 7.5% at December 31, 1999), and requires
quarterly principal payments through December 2001.

CovenantsThe various agreements above contain certain covenants that, depending upon the level of capitalization and
earnings of the Companies, could impose limitations on the ability of the Companies to pay dividends, incur additional debt, place liens on property, and sell fixed assets. The Companies were in
compliance with the debt covenants at December 31, 1999.

Interest Rate Swap AgreementsCITGO has entered into the following interest rate swap agreements as of December 31,
1999 to reduce the impact of interest rate changes on its variable interest rate debt:

|Variable Rate Index |  | Expiration
Date |  | Fixed Rate
Paid |  | Notional Principal
Amount 1999
|------------------- |  | --------------- |  | --------------- |  | ------------------------------
|
|One-month LIBOR     |  | May 2000        |  | 6.28%           |  | $                             
|J.J. Kenny          |  | May 2000        |  | 4.72            |  |                               
|J.J. Kenny          |  | February 2005   |  | 5.30            |  |                               
|J.J. Kenny          |  | February 2005   |  | 5.27            |  |                               
|J.J. Kenny          |  | February 2005   |  | 5.49            |  |                               
|                    |  |                 |  |                 |  |                               
|                    |  |                 |  |                 |  | $                             
|                    |  |                 |  |                 |  |                               

Interest
expense includes $0.6 million and $1.5 million in 2000 (11 months) and 1999, respectively, related to net settlements on these
agreements.

F25

---

10. NOTES PAYABLE TO AFFILIATES

|                                                  |                    | 2000 |         | 1999
|------------------------------------------------- | ------------------ | ---- | ------- | ----
|
|Loan for acquisition of Nynas                     |                    | $    |        |     
|Loan for acquisition of 50% of CITGO              |                    |      |        |     
|Promissory Note for acquisition of 50% of         |                    |      |         |     
|                                                  | UNO-VEN            |      |         |    
|Promissory Note for acquisition BOPEC             |                    |      |        |     
|Promissory Note for acquisition of Borco          |                    |      |        |     
|Note for capital contribution in Baproven Ltd.    |                    |      |        |     
|Promissory Note for capital contribution in       |                    |      |         |     
|                                                  | Baproven Ltd.      |      |         |    
|Promissory Note for capital contribution in PDVA  |                    |      |        |     
|Promissory Note for financing of the additional   |                    |      |         |     
|                                                  | investment in Ruhr |      |         |    
|Promissory Note for capital increase in CITGO     |                    |      |        |     
|Promissory Note for capital increase in CITGO     |                    |      |        |     
|Promissory Note for repayment of Guaranteed Notes |                    |      |         |     
|                                                  | Baproven Ltd.      |      |         |    
|Promissory Note for capital contribution to       |                    |      |         |     
|                                                  | PDV Holding        |      |         |    
|Promissory Note for capital contribution to       |                    |      |         |     
|                                                  | PDV Holding        |      |         |    
|Promissory Note for capital contribution by       |                    |      |         |     
|                                                  | PDV Holding        |      |         |    
|Promissory Note for capital contribution to       |                    |      |         |     
|                                                  | PDV Holding        |      |         |    
|Promissory Note of PDVE                           |                    |      |        |     
|Loans from PDVSA                                  |                    |      | 204,550 |     
|                                                  |                    |      |         |     
|                                                  |                    | $    | 204,550 |     
|                                                  |                    |      |         |     

On
December 30, 1988, the Company signed a promissory note payable to Venedu to pay upon demand $250.0 million. The note bears no interest. The note is
subordinated and junior in right of payment to other debt of the Company and can converted by the Company into its own ordinary shares at any time.

On
December 1, 1989, Propernyn B.V. signed a promissory note payable to Venedu to pay an amount in Dutch guilders equivalent to $144.5 million. The note bears no
interest and is payable, upon demand, in Dutch guilders at the exchange rate published in the Wall Street Journal on the promissory note date. The amount of Dutch guilders to be paid is fixed at NLG
291.2 million. This promissory note was used for the financing of a capital contribution to PDV-America, where upon PDV-America used it for the financing of a
sub-joint interest in the partnership Uno-Ven Company.

On
March 15, 1989, Propernyn B.V. signed a promissory note payable to Venedu to pay an amount in Dutch guilders equivalent to $48.8 million. The note bears no interest
and is payable, upon demand, in Dutch guilders at the exchange rate published in the Wall Street Journal on the promissory note date. The amount of Dutch guilders ("NLG") to be paid is fixed at NLG
103.1 million. This promissory note was used for the financing of the acquisition of the wholly-owned group company of BOPEC.

F26

---

In 1990, the Company signed a promissory note payable to Venedu to pay an amount in Dutch guilders equivalent to $133.0 million. The note bears no interest and is payable, upon
demand, in Dutch guilders at the exchange rate published in the Wall Street Journal on the promissory note date. $127.5 million has been repaid. For the remaining note balance of
$5.5 million, the amount of Dutch guilders to be paid is fixed at NLG 9.7 million. In 1990, the Company also signed a promissory note payable to Venedu to pay an amount in Dutch guilders
equivalent to $1.7 million. The note bears no interest and is payable, upon demand, in Dutch guilders at the exchange rate published in the Wall Street Journal on the promissory note date. The
amount of Dutch guilders to be paid is fixed at NLG 3.0 million. The promissory notes were used to finance the acquisition of a storage and transshipment facility and a
non-operating oil refinery in the Bahamas.

In
1992, the Company received a loan of $15.6 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars, and was used for the
financing of a capital contribution in Baproven Limited.

In
1994, the Company received a loan of $29.1 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars.

On
December 31, 1992, the Company received a loan of DM 48.4 million from Venedu. The loan has a variable rate of interest, which is determined annually at the end of
each calendar year by both parties. The principle is payable in full in Deutsche marks on December 31, 2007. Interest is payable annually in arrears beginning December 31, 1993. The loan
is subordinated and junior in right of payment to other debt of the Company. The loan can be converted by Venedu into shares of common stock of the Company.

On
June 17, 1993, the Company received a loan of $212.0 million from Venedu. The loan bore no interest for the first year. For subsequent years, the loan has a variable
rate of interest that is determined annually by both parties. The interest rate will not exceed the lower of (i) 1% above the LIBOR rate on the first day of the interest period or
(ii) 9.9%. The loan is subordinated and junior in right of payment to other debt of the Company and can be converted by the Company into shares of PDV America, Inc. at a conversion rate
agreed upon by the Company and Venedu. The principle is payable in full in United States dollars on June 17, 2008.

On
August 3, 1993, the Company received a loan of $435.0 million from Venedu. The loan bore no interest for the first year. For subsequent years, the loan has a variable
rate of interest that is determined annually by both parties. The interest rate will not exceed the lower of (1) 1% above the LIBOR rate on the first day of the interest period, or
(ii) 9.9%. The loan is subordinated and junior in right of payment to other debt of the Company and can be converted by the Company into shares of PDV America, Inc. at a conversion rate
agreed upon by the Company and Venedu. The principle is payable in full in United States dollars on August 3, 2008.

In
1995, the Company received a loan of 140.2 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars. During 1999,
$29.4 million was repaid and $93.9 million was written-off. The remaining loan balance is $16.9 million.

In
1997, the Company received a loan of $258.7 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars. This loan was used for
capital contributions in the acquisition of a remaining 50% joint interest in Uno-Ven Company. This wholly-owned group company is now a new company called PDV-Midwest Refinery.

F27

---

In 1997, the Company received a loan of $57.8 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars. This loan was used for a
partial capital payment of a 50% joint interest acquired in Chalmette Refinery, Louisiana, USA.

In
1998, the Company received a loan of $39.9 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars. The loan was used for a
partial capital payment of a 50% joint interest in Chalmette Refinery, Louisiana, USA.

In
1998, the Company received a loan of $6.7 million from Venedu. The loan bears no interest and is payable, upon demand, in United States dollars. The loan was used for a
partial capital payment of a 50% joint interest in a new Coker to be built at Sweeny Refinery.

The
above-mentioned promissory notes and loans, were all fully repaid in 2000 in connection with the transfer of the shares of the Company from Venedu to PDVSA.

In
2000 the Company received loans from PDVSA and other affiliates for a total amount of $204.5 million. The loans bear no interest and are payable upon demand in United States
dollars. PDVSA and affiliates have stated their intention not to demand payment throughout 2001 and therefore such notes have been classified as non-current liabilities.

Due
to the related party nature of the notes payable described above, it is not practicable to estimate their fair value.

11. EMPLOYEE BENEFIT PLANS

Pension PlanBOPEC maintains a pension plan which provides retirement benefits for eligible employees. The plan is funded
by BOPEC's contributions. The contribution for 2000 was $349,540 (1999: $359,942) and was paid to a Netherlands Antilles insurance company which administers the plan. The (unaudited) discounted value
of the past service premium, calculated at a rate of 4.8% per year, as of December 31, 2000 is $825,950 (1999: $987,663).

Employee SavingsCITGO sponsors three qualified defined contribution retirement and savings plans covering substantially
all eligible salaried and hourly employees. Participants make voluntary contributions to the plans and CITGO makes contributions, including matching of employee contributions, based on plan
provisions. CITGO charged $16 million, $18 million and $19 million to operations related to its contributions to these plans in 2000 (11months), 1999 and 1998 respectively.

Pension BenefitsCITGO sponsors three qualified noncontributory defined benefit pension plans, two of which cover eligible
hourly employees and one of which covers eligible salaried employees. CITGO also sponsors three nonqualified defined benefit plans for certain eligible employees. The qualified plans' assets include
corporate securities, a fixed income mutual fund, two collective funds and a short-term investment fund. The nonqualified plans are not funded.

CITGO's
policy is to fund the qualified pension plans in accordance with applicable laws and regulations and not to exceed the tax deductible limits. The nonqualified plans are funded
as necessary to pay retiree benefits. The plan benefits for each of the qualified pension plans are primarily based on an employee's years of plan service and compensation as defined by each plan.

Postretirement Benefits Other Than PensionsIn addition to pension benefits, CITGO also provides certain health care and
life insurance benefits for eligible salaried and hourly employees at retirement. These benefits are subject to deductibles, copayment provisions and other limitations and are primarily funded on a
pay-as-you-go basis. CITGO reserves the right to change or to terminate the benefits at any time.

F28

---

As discussed in Note 1 to the consolidated financial statements there are no amounts related to CITGO that are included in the Company's consolidated balance sheet at
December 31, 2000. The following sets forth the changes in benefit obligations and plan assets for the pension and postretirement plans for the year ended December 31, 1999 and the
funded status of such plans reconciled with amounts reported in the Company's consolidated balance sheets:

|                                                                             |                                              | Pension
Benefits          |         | Other Benefits |        
|---------------------------------------------------------------------------- | -------------------------------------------- | ------------------------- | ------- | -------------- | -------
|
|
|Change in benefit obligation:                                                |                                              |                           |         |                |        
|                                                                             | Benefit obligation, beginning of year        |                           | $       | 270,382.       |        
|                                                                             | Service cost                                 |                           |         | 19,554.        |        
|                                                                             | Interest cost                                |                           |         | 17,899.        |        
|                                                                             | Actuarial gain                               |                           |         | (39,996        | )      
|                                                                             | Benefits paid                                |                           |         | (9,136         | )      
|                                                                             |                                              |                           |         |                |        
|Benefit obligation, beginning of year                                        |                                              |                           | 258,703 |                |        
|                                                                             |                                              |                           |         |                |        
|Change in plan assets:                                                       |                                              |                           |         |                |        
|                                                                             | Fair value of plan assets, beginning of year |                           |         | 254,648        |        
|                                                                             | Actual return on plan assets                 |                           |         | 28,644         |        
|                                                                             | Employer contribution                        |                           |         | 1,226          |        
|                                                                             | Benefits paid                                |                           |         | (9,136         | )      
|                                                                             |                                              |                           |         |                |        
|Fair value of plan assets, end of year                                       |                                              |                           | 275,382 |                |        
|                                                                             |                                              |                           |         |                |        
|Funded status                                                                |                                              |                           | 16,679  |                |        
|Unrecognized net actuarial gain                                              |                                              |                           | (85,606 | )              |        
|Unrecognized prior service cost                                              |                                              |                           | 107     |                |        
|Net gain at date of adoption                                                 |                                              |                           | (1,012  | )              |        
|                                                                             |                                              |                           |         |                |        
|Net amount recognized                                                        |                                              | $                         | (69,832 | )              | $      
|                                                                             |                                              |                           |         |                |        
|Amounts recognized in the Company's consolidated balance sheets consists of: |                                              |                           |         |                |        
|                                                                             |                                              | Accrued benefit liability |         | $              | (76,303
|                                                                             |                                              | Intangible asset          |         |                | 1,245. 
|                                                                             |                                              | Accumulated other         |         |                |        
|                                                                             |                                              | comprehensive income      |         |                | 5,226  
|                                                                             |                                              |                           |         |                |        
|Net amount recognized                                                        |                                              | $                         | (69,832 | )              | $      
|                                                                             |                                              |                           |         |                |        

|                                                |  | Pension Benefits |  | Other Benefits
|----------------------------------------------- |  | ---------------- |  | --------------
|
|Weighted-average assumptions as of December 31: |  |                  |  |               
|Discount rate                                   |  | 7.75%            |  | 7.75%         
|Expected return on plan assets                  |  | 9.0%             |  | 6.0%          
|Rate of compensation increase                   |  | 5.0%             |  |              

F29

---

PROPERNYN B.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. EMPLOYEE BENEFIT PLANS (Continued)

For
measurement purposes, a 6.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2000 and 1999, respectively. The rate was assumed to
decrease gradually to 5.5% for 2002 and remain at that level thereafter. The amounts in the table below are for full year except for 2000, which is the eleven months ended November 30, 2000.

|                                             |  | Other Benefits |         | Pension Benefits |  
|-------------------------------------------- |  | -------------- | ------- | ---------------- | -
|
|
|Components of net periodic benefit cost:     |  |                |         |                  |  
|Service cost                                 |  | $              | 14,238  |                  | $
|Interest cost                                |  |                | 18,040  |                  |  
|Expected return on plan assets               |  |                | (22,364 | )                |  
|Amortization of prior service cost           |  |                | 131     |                  |  
|Amortization of net gain at date of adoption |  |                | (246    | )                |  
|Recognized net actuarial gain                |  |                | (4,422  | )                |  
|                                             |  |                |         |                  |  
|Net periodic benefit cost                    |  | $              | 5,377   |                  | $
|                                             |  |                |         |                  |  

Actuarial
gains (or losses) related to the postretirement benefit obligation are recognized as a component of net postretirement benefit cost by the amount the beginning of year
unrecognized net gain (or loss) exceeds 7.5% of the accumulated postretirement benefit obligation.

The
projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan with accumulated benefit obligations in excess of plan assets were
$23.4 million, $22.8 million and $0, respectively, as of December 31, 1999.

PDVMR Pension PlansIn accordance with a transfer of assets from a former owner, on May 1, 1997, PDVMR assumed the
responsibility for the former owner's pension plans, which include both a qualified and a nonqualified plan which were frozen at their current levels on April 30, 1997. The plans cover
employees of the former owner who were participants in the plans as of April 30, 1997. At December 31, 1999, plan assets consisted of equity securities, bonds and cash.

As
discussed in Note 1 to the consolidated financial statements, there are no amounts related to CITGO and PDVMR in the Company's consolidated balance sheet at
December 31, 2000. The following sets forth the changes in benefit obligations and plan assets for the year ended December 31,

F30

---

1999 and the funded status of the plans reconciled with amounts reported in the Company's consolidated balance sheets:

1999(000s Omitted)Change in benefit obligation:Benefit obligation, beginning of year

$
64,771Interest cost


4,298Actuarial gain


(10,353
)Benefits paid


(8,329
)Benefit obligation, end of year


50,387Change in plan assets:Fair value of plan assets, beginning of year


68,057Actual return on plan assets


10,054Benefits paid


(8,329
)Fair Value of plan assets, end of year


69,782Funded status


19,395Unrecognized net actuarial loss


(11,448
)Prepaid benefit cost

$
7,947Weighted-average assumptions as of December 31:Discount rate


7.75%Expected return on plan assets


9.50%


The
amounts in the table below are for the full year except for 2000, which is for the eleven months ended November 30, 2000.

2000.

1999

1998000s OmittedComponents of net periodic benefit credit:Interest cost

$
3,504

$
4,298

$
4,348Expected return on plan assets


(5,612
)

(5,996
)

(5,482
)Recognized net actuarial loss


50


34


215Net periodic benefit credit

$
(2,058
)
$
(1,664
)
$
(919
)


The
projected benefit obligation of the nonqualified plan (which equals the accumulated benefit obligation for this plan) was $380,250 as of December 31, 1999. The plan is
unfunded.

Employee Separation ProgramsDuring 1997, CITGO's senior management implemented a Transformation Program, which resulted in
certain personnel reductions (the "Separation Programs"). CITGO expensed approximately $1 million, $7 million and $8 million for the years ended December 31, 2000, 1999 and
1998, respectively, relating to the Separation Programs.

F31

---

12. INCOME TAXES

The provisions for income taxes are comprised of the following:

2000

1999

1998(000s Omitted)Current:Federal

$
101,312

$
(31,526
)
$
36,781State


3,824


674.


5,857Other


288


 .


650105,424


(30,852
)

43,288Deferred


77,329


80,172.


81,263$
182,753

$
49,320.

$
124,551


The
Netherlands statutory tax rate differs from the effective rate due to the following:

2000

1999

1998Netherlands statutory tax rate

35.0
%
35.0
%
35.0
%Exchange losses (gains) not subject to taxbenefits (expense)





1.4State taxes, net of U.S. federal benefit

1.8

2.4

0.7Dividend exclusions

(1.2
)
(3.7
)
(0.8
)Pre-tax losses of non-U.S. entities





6.1Tax benefit of non-U.S. entities

(0.3
)
(6.1
)
Tax settlement



(5.4
)
Other

2.7

1.2

0.6Effective tax rate

38.0
%
23.4
%
43.0
%


The
effective tax rate for 1999 was unusually low due primarily to the favorable resolution in that year with the United States of America's Internal Revenue Service ("IRS") of
significant tax issues related to environmental expenditures.

Deferred
income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes, and (b) loss and tax credit carryforwards. There were no deferred fax liabilities or assets as of

F32

---

December 31, 2000. The tax effects of significant items comprising the Company's net deferred tax liability as of December 31, 1999 are as follows:

1999(000s Omitted)Deferred tax liabilities:Property, plant and equipment

$
648,298Inventories


106,457Investments in affiliates


150,702Other


70,985976,442Deferred tax assets:Postretirement benefit obligation


77,371Marketing and promotional accruals


9,271Employee benefit accruals


38,893Alternative minimum tax credit carryforward


42,915Net operating loss carryforward


77,603Other


116,573362,626Net deferred tax liability (of which $0 and $9,908 is included in prepaid expenses and other at December 31, 2000 and 1999, respectively)

$
613,816


During
1999, the Companies filed a claim with the IRS to reclassify certain losses from capital to ordinary. The Companies were successful and were able to utilize the
$6.7 million capital loss carryforward in their 1998 tax return.

13. COMMITMENTS AND CONTINGENCIES

Litigation and Injury ClaimsVarious lawsuits and claims arising in the ordinary course of business
are pending against the Companies. The Companies record accruals for potential losses when, in management's opinion, such losses are probable and reasonably estimable. If known lawsuits and claims
were to be determined in a manner adverse to the Companies, and in amounts greater than the accruals of the Companies, then such determinations could have a material adverse effect on the results of
operations of the Companies in a given reporting period. However, in management's opinion, the ultimate resolution of these lawsuits and claims will not exceed, by a material amount, the amount of the
accruals and the insurance coverages available to the Companies. This opinion is based upon management's and counsel's current assessment of these lawsuits and claims. The most significant lawsuits
and claims are discussed below.

F33

---

Environmental Compliance and RemediationThe Companies are subject to various environmental laws and regulations which may
require the Companies to take action to correct or improve the effects on the environmental of prior disposal or release of petroleum substances by the Companies or other parties. Maintaining
compliance with environmental laws and regulations in the future could require significant capital expenditures and additional operating costs.

14. LEASES

CITGO leases certain of its Corpus Christi refinery facilities under a capital lease. The basic term of the lease expires on January 1, 2004; however,
CITGO may renew the lease until January 31, 2011, the date of its option to purchase the facilities at a nominal amount. Capitalized costs included in property plant, respectively and equipment
related to the leased assets were approximately $0 and $209 million at December 31, 2000 and 1999, respectively. Accumulated amortization related to the leased assets was approximately
$110 million at December 31, 1999. Amortization is included in depreciation expense.

CITGO
has various noncancellable operating leases, primarily for product storage facilities, office space, computer equipment and vehicles. Rent expense on all operating leases
totaled $32 million, $35 million and $34 million in 2000 (11 months), 1999 and 1998, respectively. As discussed in note 1, to
the consolidated financial statement, there are no amounts related to PDVH and subsidiaries (including CITGO) as of December 31, 2000.

PDVE's
annual rental expenses for its building amounts approximately to $154,540.

In
1995, BOPEC signed a contract to purchase water. The contract's term is 60 months and requires a minimum payment of approximately $28,000 per year. BOPEC has a lease
agreement for its transshipment facility site with the government of the Netherlands Antilles and the Island Government of Bonaire. The initial term of the lease is through 2034, and, subject to
government approval, provides

F34

---

for an extension of the lease for an additional 60 years. Future annual rentals will be approximately $80,000 per year. BOPEC has obligations regarding contracts in connection with construction
in progress for approximately $46,000. BOPEC, in conjunction with its performance of marine services, enters into time charters for two tugboats, which require a combined minimum monthly rental
expense of $72,050.

Future
minimum lease payments for the noncancellable operating leases are as follows:

Year

Operating
leases(000s Omitted)2001

$
1,1452002


1,0992003


1,0992004


1,0992005


1,099Thereafter


1,099$
6,640


15. FAIR VALUE INFORMATION

The following estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies.
However, considerable judgment is necessarily required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of
the amounts that the Companies could realize in a current market exchange.

The
use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The carrying amounts of cash and cash
equivalents, restricted cash and variable-rate debt approximate fair values. The carrying amounts and estimated fair values of the Companies' other financial instruments are as follows:

2000

1999(000s Omitted)

(000s Omitted)LiabilitiesShort-term bank loans





$
16,000

$
16,000Long-term debt






2,364,301


2,304,954Derivative and off-balance sheet financial instrumentsunrealized losses:Interest rate swap agreements









(1,281
)Guarantees of debt









(898
)Letter of credit









(4,443
)Surety bonds









(159
)


F35

---

PROPERNYN B.V. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. FAIR VALUE INFORMATION (Continued)

Short-Term Bank Loans and Long-Term DebtThe fair value of short-term bank loans and
long-term debt at December 31, 1999 is based on interest rates that are currently available to the Companies for issuance of debt with similar terms and remaining maturities, except
for PDV America's $750 million principal amount senior notes which were based upon quoted market prices.

Interest Rate Swap AgreementsThe fair value of these agreements at December 31, 1999 is based on estimated amount
that CITGO and PDVMR would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the counterparties.

Guarantees, Letters of Credit and Surety BondsThe estimated fair value of contingent guarantees of third-party debt,
letters of credit and surety bonds is based on fees currently charged for similar one-year agreements or on the estimated cost to terminate them or otherwise settle the obligations with
the counterparties at the reporting dates.

The
fair value estimates presented herein are based on pertinent information available to management as of the reporting dates. Although management is not aware of any factors that
would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and current estimates of
fair value may differ significantly from the amounts presented herein.

16. INFORMATION BY GEOGRAPHICAL AREA

|                            |               | 2000 |            | 1999       |   | 1998       |           
|--------------------------- | ------------- | ---- | ---------- | ---------- | - | ---------- | ----------
|
|Revenue:                    |               |      |            |            |   |            |           
|                            | United States |      | $          | 20,445,788 |   | $          | 13,300,165
|                            | Europe        |      |            | 20,723     |   |            | 7,968     
|                            | Caribbean     |      |            | 44,255     |   |            | 97,570    
|                            |               |      |            |            |   |            |           
|                            |               |      | 20,510,766 |            | $ | 13,405,703 |           
|                            |               |      |            |            |   |            |           
|Income before income taxes: |               |      |            |            |   |            |           
|                            | United States |      | $          | 502,632    |   | $          | 173,639   
|                            | Europe        |      |            | 22,007     |   |            | 8,266     
|                            | Caribbean     |      |            | (44,373    | ) |            | 28,168    
|                            |               |      |            |            |   |            |           
|                            |               | $    | 480,266    |            | $ | 210,073    |           
|                            |               |      |            |            |   |            |           
|Identifiable assets:        |               |      |            |            |   |            |           
|                            | United States |      | $          |           |   | $          | 8,103,127 
|                            | Europe        |      |            | 211,443    |   |            | 258,916   
|                            | Caribbean     |      |            | 276,925    |   |            | 161,783   
|                            |               |      |            |            |   |            |           
|                            |               | $    | 488,368    |            | $ | 8,523,826  |           
|                            |               |      |            |            |   |            |           

****

F36

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Schedule I

PROPERNYN B.V. AND SUBSIDIARIES        CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE REGISTRANT        (Dollars in thousands)

Financial Position of the Registrant

|                                      |                                             | December 31,
|------------------------------------- | ------------------------------------------- | ------------
|
|Assets:                               |                                             |             
|                                      | Investments in and advances to subsidiaries |             
|Other assets                          |                                             |             
|                                      |                                             |             
|                                      |                                             | $           
|                                      |                                             |             
|Liabilities and Shareholder's equity: |                                             |             
|                                      | Notes payable to affiliate                  |             
|                                      | Other liabilities                           |             
|                                      | Shareholder's equity                        |             
|                                      |                                             |             
|                                      |                                             | $           
|                                      |                                             |             

S1

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Schedule I

PROPERNYN B.V. AND SUBSIDIARIES        CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE REGISTRANT (Continued)        (Dollars in thousands)

|                                   |                                          | Year ended December 31,
|---------------------------------- | ---------------------------------------- | -----------------------
|
|Revenue:                           |                                          |                        
|Equity in earnings of subsidiaries |                                          |                        
|                                   |                                          |                        
|Expenses:                          |                                          |                        
|                                   | Interest                                 |                        
|                                   | Foreign currency exchange losses/(gains) |                        
|                                   | Other                                    |                        
|                                   |                                          |                        
|                                   |                                          |                        
|                                   |                                          |                        
|Income before interest income      |                                          |                        
|                                   |                                          |                        
|Interest income                    |                                          | $                      
|                                   |                                          |                        
|Net income                         |                                          | $                      
|                                   |                                          |                        

S2

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Schedule I

PROPERNYN B.V. AND SUBSIDIARIES        CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE REGISTRANT (Continued)        (Dollars in thousands)

Cash Flows of the Registrant

|                                                     |  | Year ended December 31, |         
|---------------------------------------------------- |  | ----------------------- | --------
|
|Net cash (used in)/provided by operating activities  |  | $                       | (202,418
|                                                     |  |                         |         
|Cash used in investing activities:                   |  |                         |         
|Investment in and advances to subsidiaries           |  |                         | 202,409 
|                                                     |  |                         |         
|Cash provided by financing activities:               |  |                         |         
|(Payments)/Proceeds of notes payable to affiliates   |  |                         |        
|                                                     |  |                         |         
|Net (decrease)/increase in cash and cash equivalents |  |                         | (9      
|Cash and cash equivalentsbeginning of period        |  |                         | 3,556   
|                                                     |  |                         |         
|Cash and cash equivalentsend of period              |  | $                       | 3,547   
|                                                     |  |                         |         

S3

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PROPERNYN B.V. AND SUBSIDIARIES        FINANCIAL STATEMENT SCHEDULE  VALUATION AND QUALIFYING ACCOUNTS  FOR EACH OF THE YEARS IN THE PERIOD ENDED DECEMBER 31, 2000        (Dollars in thousands)

|Description                  |                                 | Balance at
Beginning
of year |   | Additions charged
to Costs
and Expenses |  | Deductions |        | Decrease due to
Sale of PDV
Holding, Inc. |   | Balance at
End of
Year
|---------------------------- | ------------------------------- | ---------------------------- | - | --------------------------------------- |  | ---------- | ------ | ----------------------------------------- | - | ----------------------
|Year ended December 31, 2000 |                                 |                              |   |                                         |  |            |        |                                           |   |                       
|                             | Allowance for Doubtful Accounts |                              | $ | 18,367                                  |  | $          | 1,651  |                                           | $ | (3,255                
|Year ended December 31, 1999 |                                 |                              |   |                                         |  |            |        |                                           |   |                       
|                             | Allowance for Doubtful Accounts |                              | $ | 19,667                                  |  | $          | 15,110 |                                           | $ | (16,410               
|Year ended December 31, 1998 |                                 |                              |   |                                         |  |            |        |                                           |   |                       
|                             | Allowance for Doubtful Accounts |                              | $ | 25,450                                  |  | $          | 13,838 |                                           | $ | (19,621               

S4

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