S&P: Petrozuata debt on watch

Standard & Poor's said it placed its B rating on Petrozuata Finance Inc.'s approximate $870 million debt on CreditWatch with negative implications.

The agency said that the rating action follows ConocoPhillips announcement that it failed to reach agreement with the government of Venezuela over the terms of transfer of control of the project, as mandated by the Venezuela government for all Venezuelan joint-venture heavy oil projects.

Petroleos de Venezuela SA (BB-/stable) or its affiliates will therefore assume full control of the Petrozuata project, the agency said, noting that these developments could allow the lenders to conclude that an event of default has occurred due to a change of control and expropriation concerns and potentially begin the process to accelerate the bonds.

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