Venezuela's Oil Giant Still In Disarray

Troubles at Petróleos de Venezuela (PDVSA) led Standard & Poor's to downgrade Venezuela's credit rating on its $23.6 billion in foreign debt on Jan. 18. The downgrade to "selective default" came after Venezuela missed an estimated $35 million payment on oil-indexed obligations. PDVSA hasn't fully recovered from its general strike in 2002-03, which resulted in the firing of 17,000 employees. The company is behind on filing financial statements. As a result, the government said it was unable to calculate and make the payment due. Venezuela's normal B credit rating is lower than some other oil producers because the country depends on oil for more than 80% of export revenue. The government has nearly depleted a $6 billion oil stabilization fund by tapping it for social spending.

Edited by Rose Brady

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