PDVSA's Bankruptcy: A Look from Venezuelan Law, in the Context of a Default

Abstract

This Working Paper addresses Petróleos de Venezuela, S.A. (PDVSA), a State Owned Enterprise (SOE) and National Oil Company (NOC) fully owned by Venezuela, which operates the oil and gas industry in the country, and its eventual insolvency and default on its payments obligations due under its current financial indebtedness. In particular, the Working Paper examines (i) the nature of PDVSA as a SOE, (ii) its ability to fail or be subject to insolvency proceedings, before Venezuelan courts; and (iii) how would an eventual insolvency and default on its external indebtedness would need to be conducted in the country. Two particular questions constitute the focus of the analysis: Can PDVSA actually go bankrupt? And, how would a prospective PDVSA’s bankruptcy proceeding be conducted in Venezuela?

Keywords: Insolvency, Debt Restructuring, Bankruptcy, PDVSA, Venezuela, Sovereign Debt, Default, Event of Default, Moratorium, SOE, NOC, Chapter 15, Oil, Bonds, Emerging Markets, Latin America, Fixed-Income

JEL Classification: F34, H63, H12, H81, K22, K23, K35, K41,K33