Venezuela oil company PDVSA delays bond payments

[thackney]

Venezuela oil company PDVSA delays bond payments
http://www.pennenergy.com/articles/pennenergy/2016/11/oil-and-gas-venezuela-oil-company-pdvsa-delays-bond-payments.html
November 22, 2016

Venezuela's state oil company reportedly is delaying $404 million in bond payments in an apparent sign that the oil giant's financial woes are worsening amid the slump in petroleum prices.

A JPMorgan analysts' note said Monday that the oil company PDVSA is taking advantage of a grace period to delay payments on 2021, 2024 and 2035 bonds.

The terms of the bonds permit PDVSA to put off payment for 30 days before being considered in default. Analysts do not expect the company to default, but the delay highlights cash flow problems and raises the specter of non-payment.

PDVSA is the lifeblood of Venezuela's faltering economy, which is beset by high inflation and shortages of basic goods. Oil is virtually the country's only source of export revenue.

[Oceander]

The question isn't if PDVSA will default, the question is only when. 

[truth_seeker]

The firm used to be named "Lagoven" and was a partner with Exxon.

An associate of mine was on assignment there, for months and liked it a lot. Early-mid 80s.

There are huge hydrocarbon deposits in Venezuela, in the form of heavy oil, similar to Alberta.

http://www.fluor.com/projects/lagoven-refinery-upgrade-expansion-epc

[thackney]

The firm used to be named "Lagoven" and was a partner with Exxon.

Lagoven, like Maraven, was a subsidiary of PDVSA from the Nationalization of the oil companies until 1997.

Maraven was the takeover of Shell"s assets, like Lagoven was a takeover of Creole Petroleum, which at the time was a subsidiary of Standard Oil, which later become ExxonMobil.  Not really a partner, rather the previous owner that had to help with the transition in the Nationalization.

[geronl]

PDVSA was pretty much the state piggy bank for years

[IsailedawayfromFR]

PDVSA was pretty much the state piggy bank for years

A country with such a long history of oil and such huge deposits not diversifying beyond that is the main culprit.

The blessing of oil was squandered rather than to use it to initiate less variable, long lasting successful industries in other areas.

Too bad for those citizens there.

It is not likely to get much better as the govt has destroyed its outside assistance by nationalizing foreign company assets now twice. 

Few will be angling to try a third time.  How does that rhyme go again, "Fool me once,......"