UPDATE 1-Venezuela PDVSA '07 profit jumps to $6.3 bln

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CARACAS, March 28 (Reuters) - Venezuelan state oil company PDVSA said 2007 profit rose 15 percent to $6.3 billion on a reduction in costs, though revenue slumped 3 percent to $96.2 billion and oil production fell 3 percent.

Analysts often question PDVSA's results because market observers say production is at least 25 percent less than the official 2007 average of 3.15 million barrels per day (bpd).

PDVSA's earnings are also difficult to compare with those of publicly listed companies because the results include large deductions for social spending.

The company is the financial engine for President Hugo Chavez's self-styled socialist revolution, laying out $14.1 billion on social spending in 2007.

The numbers contrast starkly with unaudited figures released by the nation's energy ministry this month showing PDVSA's profit declining by around 32 percent.

In results released late on Thursday, PDVSA said costs fell 8 percent to $72.3 billion compared with 2006.

The company said the cost savings came from converting costly oil field subcontracting agreements with private companies to state majority joint ventures that are more favorable to PDVSA.

Sources at companies involved in the newly created joint ventures say PDVSA has not fully paid them for the oil those joint ventures have produced.