Social Programs
NOCs are often required to contribute to the economic well being of the population. Many state-owned oil companies contribute a substantial portion of their annual earnings to fund social programs. PDVSA contributes approximately 40 percent (or more) of its pre-tax net earnings to Venezuela's domestic economy in taxes and has consistently done so for many years.
The downside to that situation is the lack of investment a company such as PDVSA can make in its own infrastructure. One can argue the economic disadvantages of forcing a state-owned oil and gas production company to fund health care and education programs instead of investing in refining capacity or reducing debt. This is often part of the business model of NOCs.
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