What Happened: The Venezuelan government and state-owned oil company Petroleos de Venezuela (PDVSA) must make over $3 billion worth of debt payments by the end of 2019, Argus reported Oct. 3. The obligations include a $500 million payment to ConocoPhillips that is particularly critical for Caracas, as the U.S. company could immediately seize Venezuelan export and storage terminals in the Caribbean if the country defaults on the payment.
Why It Matters: If Venezuela's government or PDVSA fail to make payments, then further export disruptions will follow, resulting in the likely seizure of some of PDVSA's assets. In addition, more companies could choose to band together and sue the Venezuelan government in an attempt to recoup their losses through arbitration payments or by seizing PDVSA's assets.
Background: PDVSA and the Venezuelan government have already defaulted on $6.4 billion worth of foreign debt payments. In April, the International Court of Justice awarded ConocoPhillips a $2 billion settlement to compensate the company for assets PDVSA seized in 2007.
- U.S. Policy on Venezuela Formally Shifting Toward Regime Change (Oct. 4, 2018)
- Venezuela: The Maduro Government Makes a Grab for Oil Revenue (Sept. 11, 2018)
- A $2 Billion Ruling Adds to Venezuela's Woes (May 14, 2018)