PDVSA to Issue $3 Billion in Bonds

Mérida, June 26th 2009 (Venezuelanalysis.com) - Petroleos de Venezuela S.A. (PDVSA), Venezuela's state owned oil company, will issue $3 billion in bonds (called Petrobono 2011), the energy minister, Rafael Ramirez, announced on Thursday.

The Central Bank of Venezuela (BCV) will coordinate the effort, while the Finance Ministry has also approved it. Bonds are available to residents of Venezuela and approved investment institutions, from 26 June until 1 July.

The BCV president, Nelson Merentes, explained that the bonds will expire on 8 July 2011. They will be bought with bolivars but denominated in US dollars according to the official exchange rate, 2.15 bolivars to the dollar, at a minimum of $2000 and from there in increments of $1000. The bonds will only be paid back when they expire.

PDVSA, in its press statement, said that the funds obtained from the sale of the bonds will go towards the "fulfillment of local obligations" as part of the national "Sowing the Oil Plan," (Siembra Petrolera), a long term investment plan in infrastructure, integration and reserve certification. According to the Bolivarian News Agency, the funds will also go towards PDVSA's debt to local service providers.

On 6 June PDVSA stock holders approved the annual management report for 2008, which said that PDVSA had had a total of $126.4 billion in earnings for a net profit of $9.4 billion in 2008.

Also during 2008 PDVSA decreased its financial debt from $16.6 billion to $15.9 billion. The Petroleum Intelligence Weekly recently ranked PDVSA as the fourth oil company in the world, due to its high levels of proven reserves, refinery capacity, production and income.

Published on Jun 26th 2009 at 6.07pm