The ratings for Petroleos de Venezuela S.A. PDVSA, the Venezuelan national oil company, reflect the foreign currency rating of its lone shareholder, the Republic of Venezuela. Standard&Poor's maintains the same rating on PDVSA as on the Republic of Venezuela because of the government's ability to exert substantial control over PDVSA's finances and its dependence on PDVSA's cash flow for meeting its own obligations. Branches of government have direct control over the company's budget, tax regime, appointment of officers, debt management, and dividend policies. The Chavez administration, which assumed office in 1999, has utilized these powers to a much greater extent than previous administrations, resulting in adverse changes to the company's growth strategy and financial management. The ratings of
