One of the largest national oil companies worldwide Unleveraged balance sheet Increased direct social spending and government intervention Historically, the ratings on Petroleos de Venezuela S.A. (PDVSA), Venezuela's national oil company, have reflected the sovereign rating on Venezuela, its lone shareholder. Standard&Poor's Ratings Services believes that the creditworthiness of PDVSA and Venezuela will likely remain tightly linked because of their ties of ownership and economic interests. We are concerned regarding the impact of the increase in direct social spending on the company's operating cash flow generation and the government's increased intervention in the oil industry. We believe that the aforementioned factors could lead to a weakening of PDVSA's liquidity position, a long-term increase in its debt leverage, and
