March 21, 2017 / 2:16 PM / a year ago

Venezuela vows PDVSA will met 2017 bond payments amid stronger oil prices

CARACAS, March 21 (Reuters) - Venezuelan state oil company PDVSA will honor some $17 billion in bond payments due this year thanks to stronger oil prices, Economy Vice President Ramon Lobo said in a newspaper interview published on Tuesday.

Brent crude, the international benchmark for oil, surged in January above $58 per barrel in the wake of output cuts, although it slipped last week to a three-month low.

Cash-squeezed Venezuela depends on oil for over 90 percent of its hard-currency revenues, so market fears have grown over its ability to service major debt payments. President Nicolas Maduro’s government, however, has repeatedly ruled out a default.

“If we managed to pay last year, which was a harder and trickier year, we’ll certainly achieve it this year,” Lobo told state-owned newspaper Correo del Orinoco. He added that an increase in oil prices at the start of the year gave the country a boost.

Analysts largely expect Venezuela to pay, although the recent slip in oil prices is a worry.

“The estimated $5 decline in oil prices that translates into $3.2 billion fewer petrodollars is not yet a trigger for default,” Siobhan Morden, managing director and head of Latin America Fixed Income Strategy at Nomura, said in a note to clients last week.

“However it clearly raises concern without yet knowing the bottom for oil prices.” (Reporting by Deisy Buitrago; Writing by Alexandra Ulmer; Editing by Dan Grebler)

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