Venezuelan Oil Giant Vows to Pay Back Debt Amid Price Gains
- PDVSA committed to making ‘important’ debt repayment in autumn
- Drought hasn’t affected nation’s oil production: Minister
Venezuela’s state oil company is committed to making a major debt repayment in the autumn amid rising crude prices, according to its oil minister.
“We have an important maturity between October and November and we’re getting ready,” Eulogio del Pino told Bloomberg News in Vienna Thursday. “We have a firm conviction that we will pay. We will meet our obligations as we always have.”
PDVSA has interest and principal payments totaling $1.4 billion in October and $2.8 billion in November, according to data compiled by Bloomberg. The company recently paid $1 billion of interest on all of its bonds, and has interest payments due every six months, said Del Pino, who is also the state oil company’s president.
Crude’s rally from a 12-year low at the start of the year to near $50 a barrel is helping boost Venezuela’s ability to repay debt. Still, prices are well short of the $121.06 a barrel the South American country needs to balance its budget, according to RBC Capital Markets.
While Venezuela, which depends on oil for 95 percent of its export revenue, remains the country most at risk of failing to pay its debt in the world, that risk is receding, according to credit-default swaps. The implied probability that a default happens over the next 12 months fell to 62 percent as of June 1 from 79 percent earlier this year.
Oil production hasn’t been affected by the recent drought, which reduced power generation from the country’s Guri dam, except for some “small” oil fields, Del Pino said. Refining capacity was untouched as the country’s plants don’t rely on hydroelectricity, he said.
Oil shipments continue uninterrupted, he said. “Have you heard any of our customers protest or have you heard that we’ve declared any force majeure?” Del Pino asked.
--With assistance from Nathan Crooks.
To contact the reporter on this story:
Angelina Rascouet in London at arascouet1@bloomberg.net
To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
To contact the reporter on this story:
Angelina Rascouet in London at arascouet1@bloomberg.net
To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
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