“Oil Price at $50/barrel Enough to Avoid Debt Default” – Venezuela 

Venezuela’s state oil producer has said oil prices at $50 per barrel are just enough to avoid a default on its debt, Bloomberg quoted company president and national oil minister Eulogio Del Pino to have said in an interview.

Del Pino, speaking on Bloomberg Television from Russia at the St. Petersburg International Economic Forum, said:
“$50 is enough.”  The company’s average production cost is around $12 a barrel, he said.

Petroleos de Venezuela SA will be able to make payments on its dollar bonds due later this year, Del Pino said. PDVSA, as the Caracas-based company is known, has interest and principal payments totaling $1.4 billion in October and $2.8 billion in November, according to data compiled by Bloomberg.

“We are working to pay that,” Del Pino said, noting that “we have been paying all of our debts” during what he called “the longest cycle of low prices that we have had.”

Crude’s rally from a 12-year low at the start of the year to near $50 a barrel is helping boost Venezuela’s ability to repay debt. Still, prices are well short of the $121.06 a barrel the South American country needs to balance its budget, according to RBC Capital Markets.

Venezuela, which depends on oil for 95 percent of its export revenue, remains the country most at risk of failing to pay its debt in the world, according to credit-default swaps.

The company will continue to use its refineries in the U.S., most of which are operated by its Citgo Petroleum Corp. subsidiary, to support its business, Del Pino said, when asked if the company had any plans to sell them in order to meet its debt payments. The reopening of a refinery in nearby Aruba will also be a “big plus” for the company, he said.

Del Pino said that PDVSA is working to with some of its “most important” service providers to change their contracts after companies including Halliburton Co. and Schlumberger Ltd. said they have curbed activity in the country because of unpaid invoices.

The country has enough active rigs to sustain production in the Orinoco oil belt and hold off any further decline in output, he added.