• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 4 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 2 hours Shale profitability
  • 7 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 5 mins Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 10 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 22 mins Europe: The Cracks Are Beginning To Show
  • 14 hours Let's shut down dissent like The Conversation in Australia
  • 17 hours New designs will reduce transport fuels consumption
  • 8 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 14 hours A little something for all you Offshore swabbies
  • 2 hours LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 18 hours Democrats and Gun Views
  • 32 mins US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 5 hours Yawn... Parliament Poised to Force Brexit Delay Until Jan. 31

A Failed Bond Swap Deal, Low Oil Prices Could Signal the End for PDVSA

Amazon oil

Venezuela’s PDVSA is in the hot seat today, with only one business day left for investors to take or leave its $5.3 billion 2017 bond proposal to push new notes back into 2020.

The likelihood of investors accepting this deal depends on how flexible the floundering Venezuelan oil company is at the hypothetical negotiating table in the final hours, according to two analysts.

“If the swap doesn't happen, they're in big trouble for next year," said Francisco Monaldi, Latin American energy policy fellow at the Baker Institute for Public Policy. "I think they're really worried about that."

Monaldi added that PDVSA was hoping that the swap—along with oil prices—would rescue it from the precarious position it is now in, but neither remedy is looking too hopeful at this point.

Raul Gallegos, Control Risks senior analyst, said of the swap deal that the initial terms were not enough to lure investors, and that the adjusted terms were not “doing much for investors” either, adding that if oil prices ticked up a bit, it might be enough to get them through next year.

Despite the hard road ahead, the analysts believe that it is possible for PDVSA to “still scrape through” next year without default.

Venezuela’s crude production has been on almost a steady decline since 2014, according to secondary sources reported by OPEC—from an average of 2.36 million barrels per day for all of 2014, to an average of 2.09 million barrels per day in September 2016.

Venezuela has been one of the most vocal advocates for an OPEC production cut, which may be the only thing that could save PDVSA—and Venezuela as a whole—from the brink of disaster.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play