Petróleos de Venezuela S A's (PDVSA's) difficulties obtaining letters of credit (L/Cs) have forced the state owned oil company to look at alternative financial solutions.

But Venezuela's attempts to raise capital by issuing a cryptocurrency, the petro, have proved problematic.


The petro is linked to Venezuela's Orinoco oil reserves but political analysts suggest it is only a matter of time before Washington imposes sanctions on trading in the cryptocurrency.

This will force PDVSA into finding even more inventive ways to monetise its oil production now that the world's banks have marginalised the company.

L/C situation

Banks have become increasingly reluctant to open L/Cs for transactions involving entities named as or connected with individuals or firms proscribed in sanctions imposed on Venezuela (DC World News, 27 November 2017).

Last year it emerged that a US company, PBF Energy, had made several unsuccessful attempts to find a bank willing to provide the L/C required to discharge a cargo of PDVSA oil from its tanker (DC World News, 4 September 2017).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.