Venezuela

As the rest of the oil-producing world recovers on the back of stronger energy prices, Venezuela is getting worse, the result of dysfunctional management, rampant corruption and the country’s crippling economic crisis, the New York Times reported. The deepening troubles at the state oil company, the country’s economic mainstay, threaten to further destabilize a nation and government facing a dire recession, soaring inflation and unbridled crime, as well as food and medicine shortages.

Mining company Crystallex International Corp said on Thursday Venezuela failed to honor a settlement and urged a federal judge to allow it to seize control of U.S. refiner Citgo Petroleum Corp., which is owned by the country’s state oil company, Reuters reported. Canada-based Crystallex won a 2016 international arbitration award of $1.2 billion against Venezuela, which has refused to pay. The company had been trying to collect by seizing shares of Citgo’s U.S. parent company, which is owned by Venezuelan state oil company PDVSA.

Venezuela investors are worried they’re getting ghosted. That’s the concern among a growing number of sovereign bondholders six weeks after the government’s mysterious announcement that it would seek to restructure its debt while also continuing to pay what’s owed in the meantime, Bloomberg News reported. It’s now been a month since a creditor meeting in Caracas produced no specific proposals, and as overdue bond payments pile up without any word from officials, the relationship looks to be on rocky ground.

One of China's biggest state-run conglomerates has sued a Venezuelan counterpart in a U.S. court in a dispute over unpaid bills, a sign of Beijing's growing impatience with its socialist South American ally as it slides into bankruptcy, the International New York Times reported on an Associated Press story. In the lawsuit filed Nov. 27 in a Houston federal court, a U.S. subsidiary of Sinopec sought more than $23 million in damages from Venezuela's state-run oil company, PDVSA.

One of China’s biggest state-owned oil companies is suing its Venezuelan counterpart in a US court, in a sign that Beijing’s patience over unpaid debts is running out as the Caribbean nation falls deeper into economic and social chaos, the Financial Times reported. A US subsidiary of Sinopec is suing PDVSA, the Venezuelan state oil company, for $23.7m plus punitive damages over a May 2012 contract to supply steel rebar for $43.5m, half of which it says remains unpaid, according to court documents seen by the Financial Times.

Back in May, Goldman Sachs Group Inc. stirred up a public-relations nightmare when its asset-management arm bought almost $3 billion worth of distressed Venezuelan bonds for pennies on the dollar. They were labeled “hunger bonds,” a nod at the country’s deepening humanitarian crisis, and critics pilloried Goldman Sachs online. Now, to make matters worse for the bank, those bonds are in default, Bloomberg News reported.

It has been called the Schrödinger’s cat of the debt world — the country that simultaneously both is and is not in default. This month, Venezuela announced it would restructure all its foreign debts, the Financial Times reported. Soon after, it began missing deadlines for bond payments and was declared to be in default by rating agencies and others. Nevertheless — apparently — it continues to make payments on its bonds.

Crystallex International Corp. and Venezuela agreed to settle a $1.2 billion dispute over the 2011 nationalization of a gold deposit in the South American nation, Bloomberg News reported. Ontario Superior Court Justice Glenn Hainey in Toronto approved the settlement on Friday after it was announced two days earlier through filings in Canada. Parts of the agreement remain sealed, including the amount to be paid.

Already in default and struggling with sinking oil production, Venezuela’s state-run energy firm told its employees to cut costs and expenses by 50 percent in an austerity drive to reflect the broader economic crisis hitting the OPEC nation of 30 million people, Bloomberg News reported.

As Venezuela struggles to make bond payments on time, about a dozen institutions holding the country’s debt are in the early stages of organizing themselves and meeting with attorneys, according to people with knowledge of the matter. The group -- which isn’t yet an official committee -- includes mutual-fund managers Pacific Investment Management Co., T. Rowe Price Group Inc., Amundi Pioneer, Ashmore Group Plc, AllianceBernstein Holding LP, Fidelity Investments, BlackRock Inc. and Allianz SE, as well as the asset-management arms of Goldman Sachs Group Inc.