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Oil production in this South American country in October reached a 28-year low, as the state-owned oil company PDVSA struggled to find means to drill wells, maintain oil fields and maintain pipelines and ports.
Oil production in Venezuela, which fell by about 20,000 barrels per day a month from last year, will be at least 250,000 barrels a day lower in 2017 than at 2016, according to the Organization of the Exporting Countries oil (OPEC). All this takes place against the background of sanctions imposed by Venezuela against Venezuela and the absence of capital operations.
Some OPEC members believe that the fall will only accelerate in 2018. At a recent OPEC meeting, Venezuelan officials were asked to give a clearer idea of the reduction in production in the country.
Saudi Arabia representatives also have many questions about the real picture of the state of production in the country, a source said. This topic can again be raised at the next meeting of the group.
Saudi Arabia will not increase production to compensate for this decline, since the de facto leader of OPEC is focused on reducing world oil reserves, a source in OPEC familiar with Saudi Arabia's oil policy told Reuters.
According to sources and Thomson Reuters, heavy oil from a member state of Iraq's OPEC and producers from non-OPEC countries (Canada and Brazil) is already replacing Venezuelan oil for key consumers in the US and India.
Earlier, the International Association of Swaps and Derivatives (ISDA) officially recognized the delay in payment, which was due on October 12 on PDVSA bonds.
Immediately after the delay in payment, investors appealed to the ISDA with the question whether the organization recognizes a default on payments by the PDVSA. After the association officially recognized a default on payments, investors are entitled to receive payments under the insurance against default.
The Association reports that the payments on PDVSA bonds with repayment in 2027 were past due. The payment was due on October 12, and on November 13 the 30-day grace period for payment ended.
The international rating agency Fitch also downgraded Venezuela's long-term rating on foreign currency obligations to "restricted default" ("RD"). The agency indicated delays in paying interest on bonds maturing in 2019 and 2024.
Prior to this, the rating agency Standard & Poors adopted a similar decision, declaring a downgrade of Venezuela's rating to a selective default.
S&P also said that Venezuela is unable to pay coupons on global bonds maturing in 2019 and 2024. The 30-day grace period ended last week. As a result, the issue rating on these bonds was lowered from "CC" to "D", while the long-term sovereign credit rating in Venezuela's foreign currency was from "CC" to "SD".
source: reuters.com
Oil production in Venezuela, which fell by about 20,000 barrels per day a month from last year, will be at least 250,000 barrels a day lower in 2017 than at 2016, according to the Organization of the Exporting Countries oil (OPEC). All this takes place against the background of sanctions imposed by Venezuela against Venezuela and the absence of capital operations.
Some OPEC members believe that the fall will only accelerate in 2018. At a recent OPEC meeting, Venezuelan officials were asked to give a clearer idea of the reduction in production in the country.
Saudi Arabia representatives also have many questions about the real picture of the state of production in the country, a source said. This topic can again be raised at the next meeting of the group.
Saudi Arabia will not increase production to compensate for this decline, since the de facto leader of OPEC is focused on reducing world oil reserves, a source in OPEC familiar with Saudi Arabia's oil policy told Reuters.
According to sources and Thomson Reuters, heavy oil from a member state of Iraq's OPEC and producers from non-OPEC countries (Canada and Brazil) is already replacing Venezuelan oil for key consumers in the US and India.
Earlier, the International Association of Swaps and Derivatives (ISDA) officially recognized the delay in payment, which was due on October 12 on PDVSA bonds.
Immediately after the delay in payment, investors appealed to the ISDA with the question whether the organization recognizes a default on payments by the PDVSA. After the association officially recognized a default on payments, investors are entitled to receive payments under the insurance against default.
The Association reports that the payments on PDVSA bonds with repayment in 2027 were past due. The payment was due on October 12, and on November 13 the 30-day grace period for payment ended.
The international rating agency Fitch also downgraded Venezuela's long-term rating on foreign currency obligations to "restricted default" ("RD"). The agency indicated delays in paying interest on bonds maturing in 2019 and 2024.
Prior to this, the rating agency Standard & Poors adopted a similar decision, declaring a downgrade of Venezuela's rating to a selective default.
S&P also said that Venezuela is unable to pay coupons on global bonds maturing in 2019 and 2024. The 30-day grace period ended last week. As a result, the issue rating on these bonds was lowered from "CC" to "D", while the long-term sovereign credit rating in Venezuela's foreign currency was from "CC" to "SD".
source: reuters.com
