US Supplier Claims PDVSA Default

US-based oil service company Williams says it will report a non-cash impairment of about $241m in 1Q 2009 because PDVSA has not paid past due bills and probably will not cover them, even though it has issued notices of default to PDVSA. “In the event that PDVSA does not cure the defaults and does not comply with its contractual obligations to purchase the related assets, Williams will pursue all rights available to it under its agreements, including international arbitration,” Williams says. However, Barclays head of LatAm and EMEA corporate credit analyst Juan Cruz says in a research note that PDVSA will eventually liquidate pending balances with suppliers and that it should have no issues covering short-term obligations.