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The ugly truth about PDVSA

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Pdvsa, the third-largest company in Latin America, is in trouble. The state-owned company is facing a one-two punch: declining production and growing financial demands from Venezuela’s cash-starved government. “The cash flow that the government takes from Pdvsa is very high,” says Lucas Aristizabal, an analyst with Fitch Ratings in Chicago. “That includes the royalties, taxes, dividends, social programs and oil barter agreements such as Petrocaribe and the Fondo Conjunto Chino-Venezolano. When you add it all together, the cash flow from operations is about negative.” That’s hamstringing Pdvsa, which is trying to develop Venezuela’s oil reserves, which at 297 million barrels […]
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