Energy
October 29

Pdvsa still owes USD 4.5 billion to service providers
The goal of reducing to zero the debts of the state-run oil company Petróleos de Venezuela (Pdvsa) still looks distant.

The Venezuelan oil industry has 4.5 billion debt obligations with suppliers. Although the state oil company has issued bonds to meet its commitments, funds are still insufficient.

Pdvsa's Chief Finance Executive Víctor Aular reiterated that the oil company still has outstanding debts.

As part of the economic measures, the authorities announced that one of the actions was to pay the debt to providers. As a matter of fact, Nelson Merentes, the President of the Central Bank of Venezuela (BCV), said that Pdvsa has already a schedule, up to December, to minimize the debt."

Aular said that the state-run oil company has still not paid service providers after their nationalization because the audits and valuations have not been completed yet.

With regard to the repurchase of debt, the top oil official said that Pdvsa is not considering this type of financial operation. However, he did not rule out the possibility.

Aular did not reject either the possibility of a new bond issue.

This week the oil industry sold USD 3 billion in dollar-denominated bonds paid in local currency. With these operations the total debt of the state-run oil company exceeds USD 23 billion.

October 30

Analysts: Pdvsa's alliances with China and Russia face hurdles
Venezuela's plan to boost oil output by 900,000 barrels per day in partnership with Russia and China faces major hurdles, while its partners bear the burden of lack of technical expertise and tight funding, Reuters said.

"These projects clearly will be beholden to foreign interests; if there are capital needs at home, foreign partners such as Russia and China will prioritize these disbursements, and it is likely that it will slow the pace of development in the Orinoco Belt," said RoseAnne Franco, analyst at PFC Energy.

The energy deals with Russia and China are pillars of the "oil diplomacy" policy promoted by Venezuelan President Hugo Chávez.

After promising the development of the oil belt to several countries around the world, from Uruguay to Vietnam, Venezuela has accelerated and deepened energy cooperation agreements with Russia and China.