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Editorial Commentary
PW: ExxonMobil vs PDVSA
The step taken by Exxon Mobil securing courts orders to freeze 12 billions dollars of Venezuela's state oil company PDVSA assets will not have any impact in the country's oil production, it is just a preventive move to secure a way of payment in case the arbitration goes against PDVSA and it does not want to honor the decision of the arbitrators.
The move also is design to put pressure to get PDVSA back to negotiating table for an off courts settlement.
However it does have a direct impact around the world, it is turning a red light in the financial community and investors on the price of the venezuelan company's bonds in the international market.
Late Thursday, the Venezuela's overall emerging debt returns ended the day 0.37 percent lower, according the JP Morgan EMBI+ index 11EMJ and on early Friday Venezuelan benchmark Global Bond 2027 issue traded at 5-1/2 month lows and fell 2.6 points in price to 96.313 <VENGLB27=RR>, Venezuela's five-year credit default swaps were trading 40-50 bps wider to around 540 bps.
It is simple, investors are becoming more and more aware of the implications of the Chavez government policies towards its golden goose "PDVSA".
PW
Petroleumworld News 02/09/08
Copyright© 2008 Scott Sullivan. All rights reserved.
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