We must therefore look beyond the announced percentage of debt cancellation.

Even if Venezuela reduced its $240 billion debt by 50 per cent, it would still owe $120 billion. With a 65 per cent reduction, $84 billion would remain. In both cases, the residual debt and its servicing costs would represent an enormous burden given the current state of the economy and public revenue.

The question is therefore not merely how much creditors will agree to write off. It is also a matter of determining how much will remain to be paid, at what rate, over what period, with what guarantees, under what conditions, and with what access to future oil revenues.

How can we explain the fact that, between May and June 2026, the debt rose from $150 billion to $240 billion?

Regardless, we should approach the announced figures with extreme caution and a genuinely critical perspective.At the end of May 2026, all the media outlets that reported the selection of Centerview and Matthieu Pigasse to help Caracas restructure its debt stated that the debt stood at around $150 billion. A month later, Delcy Rodríguez’s government put forward a figure of $240 billion. Why such a difference?

The following explanation seems reasonable: since the Venezuelan government and Centerview will have an interest in presenting the outcome of the restructuring as a success, they also have an interest in publicly inflating the amount of the debt at the start of the negotiations. Indeed, if, at the end of the process, the debt were reduced to, say, $120 billion, they could claim a major success by announcing that the debt had been halved. This presentation also suits the creditors, as it opens up greater prospects for them to increase their gains or limit their losses.

The announced debt figure is exaggerated, and its components must be meticulously verified: the debts claimed by creditors, the amounts of penalties and compensation claimed by the various parties involved, the market value of the debt securities, their legitimacy, their legality, and so on.

What Does the $240 Billion Consist of?

Subject to the usual reservations, it is essential to distinguish between the different categories of “debt”.

One component consists of Venezuelan sovereign bonds and PDVSA bonds. The principal is estimated at around $60 billion, to which would be added some $40 billion in interest arrears accumulated since the 2017 default. We shall see later that, in reality, this figure is greatly exaggerated, as it does not account for the value of the securities in question on the debt market.

A second component consists of bilateral debts, notably to China and Russia, to which are added debts to the Paris Club and various regional financial institutions.

A third component consists of commercial debts owed to foreign companies, notably the sums owed by PDVSA to foreign oil firms. The Financial Times cites up to $50 billion in unpaid bills to oil companies.

Finally, another category, which is particularly important for our analysis, consists of claims arising from international legal and arbitration proceedings, notably those linked to nationalisations and expropriations carried out under Hugo Chávez.

The Financial Times cites more than $20 billion in legal claims.But these different categories cannot be treated as equivalent.

A sovereign bond, an unpaid bill to an oil company and compensation awarded by an arbitral tribunal following an expropriation are not claims of the same nature.

Claims Arising From Nationalisations During the Chávez Era

This issue warrants particular attention.

Hugo Chávez’s government carried out numerous nationalisations and takeovers in the oil, mining, industrial and agricultural sectors.

However, we must avoid a legally erroneous presentation: international law does not prohibit nationalisation or expropriation. States have the right to regain control of activities or natural resources, particularly on grounds of public interest, subject to the international obligations they have undertaken and, in particular, the rules relating to compensation.

In several Venezuelan cases, the Chávez government had therefore provided for or offered compensation to comply with international law. The dispute centred, in particular, on the amount of this compensation. The companies concerned considered that the sums offered were insufficient in light of the investment protection treaties they invoked. They therefore brought the matter before international arbitration tribunals.

It is important to make the distinction clear, as it would be misleading to suggest that Venezuela systematically expropriated without providing compensation.

Under Hugo Chávez (President of Venezuela from 1999 to 2013), nationalisations gave rise to a wide variety of situations. In several cases — CANTV, Electricidad de Caracas, Banco de Venezuela, Sidor and the cement manufacturers Holcim, Lafarge and Cemex — the government negotiated directly with the owners and paid compensation, which in some instances was very substantial. The owners of the companies mentioned above received a total of more than 7 billion dollars.

In other cases, negotiations have broken down, and the companies have brought claims against Venezuela before various tribunals. This is particularly the case for two US oil companies, ExxonMobil and ConocoPhillips; three Canadian gold mining companies, including Gold Reserve, Crystallex and Rusoro; FertiNitro (a Venezuelan joint venture producing ammonia and urea, in which the US firm Koch Industries holds a 35 per cent stake), Tidewater (a US company providing maritime services to offshore oil companies); Owens-Illinois (a US company specialising in the manufacture of glass containers and bottles, particularly for the food and drink industry) and Monaca (a Venezuelan subsidiary of the Mexican group Gruma, specialising in the production of maize and wheat flour). Various tribunals, including the World Bank tribunal, have ordered Venezuela to pay several billion dollars in compensation, and a significant proportion of these claims has never actually been paid, or has only been paid in part.When reviewing the claims made by the companies mentioned above, it becomes apparent that they tended to seek enormous sums in compensation, to the extent that the tribunals before which they brought their cases – despite ruling in their favour – considerably reduced the amounts actually awarded in the form of damages or compensation. In the case of the US oil company ConocoPhillips, which was demanding just over 30 billion dollars from Venezuela, the World Bank tribunal (ICSID) ordered the country to pay 8.5 billion dollars.

Today, the following questions arise:

• Should the claims of large private companies be recognised as legitimate, and should the rulings handed down by institutions such as ICSID, the World Bank tribunal, be accepted?
• What sum had been offered or paid by Venezuela?
• What sum was ultimately set by the tribunals?
• What interest was added?
• What payments have been made since then?
• And what is the actual outstanding balance?

In any case, the amounts currently being claimed must not be accepted.

They must be audited.

This audit must take into account the human and environmental impact of the past activities of the large companies claiming compensation. Indeed, the value of the damage caused by these companies must be calculated and reparations demanded. The damage caused by oil and gold is particularly severe. The courts that have ordered Venezuela to pay compensation to these companies have never taken this aspect into account.

Why Did Chávez, Morales and Correa Walk Out of the World Bank Tribunal?

We must also view this question in its historical context.

Evo Morales’s Bolivia, Rafael Correa’s Ecuador and Hugo Chávez’s Venezuela had challenged the investor-state arbitration system created by the World Bank, arguing that it granted excessive power to large transnational corporations at the expense of states’ ability to exercise sovereignty over their natural resources. The institution in question is part of the World Bank Group and is known as ICSID (International Centre for Settlement of Investment Disputes).

Bolivia denounced the ICSID Convention on 2 May 2007, with withdrawal taking effect on 3 November of the same year. Ecuador denounced it on 6 July 2009, with withdrawal taking effect on 7 January 2010. Venezuela finally notified its withdrawal on 24 January 2012, which took effect on 25 July 2012.

At the time, CADTM welcomed these decisions, precisely because we considered that the ICSID system was too favourable to the interests of private investors and limited the ability of states to regain control of their natural resources[6].

It is necessary to challenge the validity of ICSID awards and to audit them.

Sanctions and Defaults

Venezuela has been in default on a large portion of its bond debt since 2017. But this default must also be seen in context.US sanctions have gradually cut off part of Venezuela’s access to international financial markets. Sanctions against PDVSA have also made it extremely difficult for the state-owned oil company to manage its cash flows normally.

We need to separate two issues: the Venezuelan government’s responsibilities regarding the accumulation and management of the debt – including any possible cases of corruption involving civil servants by creditor companies, which must be investigated – and the effects of US sanctions on the state’s ability to honour or refinance its commitments, which must also be documented.

A thorough audit must take both aspects into account.

The IMF is Back in the Picture

Under pressure from Donald Trump and Marco Rubio, the IMF officially resumed contact with the Venezuelan authorities in April 2026, following several years of suspension.

It should be noted, however, that at this stage the IMF is not negotiating the restructuring or conducting the debt sustainability analysis directly. Centerview is playing this role.

The IMF’s return is nonetheless significant. In sovereign debt restructurings, the IMF traditionally plays a central role in establishing the macroeconomic framework and in defining what constitutes sustainable debt.

The risk, therefore, is that a new cycle will take hold: restructuring of the current debt, a return to the international markets, new borrowing, followed by the repayment of both old and new debts using future oil revenues.

A Major Disaster: The Earthquakes of 24 June 2026

A natural disaster of exceptional magnitude compounded this already extremely difficult situation. On 24 June 2026, two earthquakes measuring 7.2 and 7.5 on the Richter scale struck Venezuela. They caused widespread destruction across several states and damaged essential infrastructure.

As of 14 July, the Venezuelan authorities reported 4,734 deaths, 16,740 injuries and nearly 18,000 people left homeless.

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Collapsed and damaged buildings in Los Palos Grandes (Public Domain)

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The damage is also considerable. As early as 26 June, the United Nations Development Programme estimated the direct physical damage at $6.7 billion. A subsequent UN assessment put the cost of direct damage to buildings and infrastructure at around $37 billion, without even including indirect economic losses or the full costs of reconstruction.

This disaster should inevitably lead to a reassessment of Venezuela’s financial obligations. It would be absurd to demand that a country struck by such a disaster prioritise the use of its available resources to repay foreign creditors when it needs to rebuild homes, hospitals, water networks, roads, energy infrastructure and public services.

Reconstruction must take precedence over debt servicing.

At the very least, a moratorium on debt servicing, without the accumulation of penalties and late-payment interest, should be introduced to enable the country to address the humanitarian emergency and undertake reconstruction.

The disaster must also be factored into any serious analysis of debt sustainability.

Who has verified the figure of $240 billion in debt that has been put forward?

The figure of $240 billion is substantial, but it is not enough simply to state it. Its composition and justification must be established.

We need to know:

• which bonds are still actually outstanding;
• which debts are owed by the state and which by PDVSA;
• which loans have been taken out from China, Russia and other countries;
• which claims are held by foreign companies;
• which arbitration awards have been made;
• what compensation has been offered or already paid;
• what payments have been made since the awards;
• what interest has accrued;
• which claims are still disputed;
• what security has been provided to creditors;
• which public assets have been provided as security;
• what fees have been paid to investment banks and law firms.We must also assess the domestic public debt, even though it is not part of the current restructuring plan, which concerns the external public debt.But Venezuela’s assets must also be examined.
• What are its oil revenues?
• What are its assets abroad?
• How much gold is held in the United Kingdom?
• What other assets are frozen?
• Which oil revenues are currently controlled or administered by the US authorities?
• How much would these assets have yielded had they been available?It is therefore necessary to audit both the liabilities and the assets.

What Might a Debt Restructuring With a 50 Per Cent Write-down Mean for Creditors?

The face value of a debt instrument does not necessarily correspond to the amount actually invested by its current holder. Venezuelan bonds and those issued by PDVSA have been trading for several years on the secondary market at prices well below their face value. Some PDVSA bonds were trading at around 12 to 13 cents on the dollar for 2024 maturities. They subsequently rose sharply, reaching over 40 cents for certain issues maturing in 2026.

This trend is key to understanding the interests at stake in the restructuring. A fund that had purchased a debt with a face value of 1 dollar for 12 cents and ultimately recovered 50 cents as part of the restructuring would have more than quadrupled its investment. If it recovered 60 cents, its return would reach 400 per cent. A 50 per cent or 60 per cent reduction in the nominal debt does not imply that the current holders of the debt will suffer an equivalent loss on their actual capital investments. On the contrary, some investors who specialise in distressed debt may realise considerable gains.

It is therefore essential to distinguish between the nominal value of the debt, its market value and the purchase price paid by its current holders. As part of a citizens’ audit, efforts should also be made to identify the main current holders of the debt and, where possible, the terms on which they acquired it.In a forthcoming article, I shall outline various restructuring scenarios, including an estimate of the gains and losses for debt holders, and I shall put forward a series of proposals aimed at upholding the sovereignty of the country and its people.

For a Citizens’ Audit of the Debt and Public Accounts

The conclusion is clear: before any comprehensive debt restructuring takes place, a citizens’ audit of Venezuela’s debt and public accounts must be carried out[7].

This audit must be independent of creditors, the investment banks tasked with negotiating the restructuring, and international financial institutions.

It must involve social, trade union, academic and citizens’ organisations and have full access to the necessary information.

It must cover state revenues, oil revenues, PDVSA’s accounts, oil contracts, loans, guarantees, repayments made and assets held abroad.It must assess the impact on the population and the nature of the past activities of the major companies claiming compensation. It is indeed necessary to evaluate the damage caused by these companies and to demand that they provide redress. The damage caused by oil and mining companies, amongst others, is particularly significant. The courts that have ordered Venezuela to pay compensation to these companies have never taken this aspect into account.

It must also examine all the claims made against Venezuela, distinguishing between:

• the debt actually owed;
• debt already repaid;
• disputed claims;
• claims arising from arbitration awards;
• compensation negotiated following nationalisations;
• accrued interest;
• any claims that may be legally contestable;
• and claims whose legitimacy must be examined.

The aim is to ensure that the Venezuelan people do not spend decades repaying a mass of claims whose origin, composition, actual amount and payments already made remain publicly unverified.

Regaining Sovereignty Over Resources and Debt

The issue of debt is inseparable from that of sovereignty.

Venezuela possesses considerable natural resources. But sovereignty over these resources cannot be limited to legal ownership of the deposits.

It means that the Venezuelan people must be able to decide how these resources are used and oversee the public accounts into which the revenue from these resources is channelled.

Oil revenues must, as a priority, be used to rebuild the country, develop public services, guarantee access to healthcare, education, housing and food, and rebuild destroyed infrastructure. They cannot be regarded as a source of repayment intended primarily to reassure the financial markets and creditors.

The fundamental question is therefore this:

Instead of asking creditors what they are prepared to accept, we must ask the Venezuelan people what actually needs to be paid, to whom, why and under what conditions.

It is recommended that a government genuinely committed to the people should secure the cancellation of all illegitimate or illegal debts or declare a repudiation of them.

Debt restructuring that includes the cancellation of all illegitimate or illegal debts should not be viewed as a means for Venezuela to re-enter the international financial markets. A new model of economic and social policy must be put into practice so that the country’s wealthiest individuals and major national and foreign companies contribute to the public treasury in such a way as to minimise the need to resort to new borrowing. In addition, recourse to the financial markets to repay old illegitimate or illegal debts must be ruled out.

The prospect of debt restructuring must provide an opportunity to open a public debate on the financing of public expenditure, the use and protection of natural resources, and the country’s economic future to ensure the well-being of the population.

*Ultimately, it is a matter of reclaiming what belongs to the Venezuelan people:

• sovereignty over its resources;
• sovereignty over its revenues;
• sovereignty over its public accounts;
• sovereignty over its debt;
• sovereignty over its economic and social choices.

Full and complete sovereignty cannot exist when the country’s main wealth is placed under the unilateral control of a foreign power, when national assets remain frozen abroad, and when decisions committing the country’s future revenues for several decades are negotiated between the government, investment banks and international creditors.

Conclusion

Before deciding how much Venezuela must repay, we must know what it actually owes. Instead of guaranteeing creditors access to future oil revenues, we must restore control over this wealth to the Venezuelan people. Instead of talking about Venezuela’s return to the financial markets, we must enable Venezuela to regain its economic sovereignty.

That is why the priority should be a moratorium on debt servicing, followed by a comprehensive citizen-led audit of Venezuela’s public accounts, debt, oil revenues and assets. The reconstruction of the country and meeting the needs of its population must take precedence over repaying creditors.

Appendix: Table showing an estimate of the total amount of financial claims against Venezuela (in billions of US dollars).

The figures shown correspond to creditors’ claims, which must be audited and may result in cancellations or repudiations.

Read the endnotes here.