Fitch cuts PDVSA outlook to negative

Fitch Ratings said it revised Petroleos de Venezuela SA's (PDVSA) outlook to negative from stable following Fitch's revision of the Bolivarian Republic of Venezuela's outlook to negative from stable.

Concurrently, Fitch said it affirmed PDVSA's foreign and local currency issuer default ratings at BB- and the national long-term rating at AAA(ven).

Due to its high dependence on crude oil, decreases in the Venezuela crude oil basket will adversely affect the broader economy of Venezuela, the agency said.

Furthermore, Fitch noted that it remains concerned with the long-term challenges faced by PDVSA regarding the company's ability to extract and develop hydrocarbons reserves, sufficiently reinvest in its business and the potential increase in taxes that hinders the company's ability to invest in much needed infrastructure.

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