CARACAS (Realist English). Venezuela is preparing to disclose its total public debt of $240 billion, which would constitute the largest sovereign debt restructuring in world history.
According to the Financial Times, citing sources familiar with the government’s plans, the actual level of indebtedness significantly exceeds market estimates, which ranged between $150–200 billion.
Scale of Debt and Economic Collapse
Under the plan, which will be presented to creditors in the coming weeks, Venezuela’s economy has contracted by roughly two-thirds since 2012. The country’s total economic output is estimated at about $100 billion, meaning the debt-to-GDP ratio will exceed 200%.
The debt includes sovereign bonds and obligations of the state oil company PDVSA, amounting to about $60 billion in defaulted bonds, as well as arbitration awards and accrued interest. Venezuela has not serviced its external debt since 2017.
Background: Maduro’s Fall and Return to Markets
The restructuring became possible after the change of power in Caracas.
In early 2026, the Donald Trump administration carried out an operation to remove President Nicolás Maduro from power. Following this, Washington began a phased lifting of sanctions on Venezuela, including permission for debt restructuring.
The United States effectively took control of Venezuela’s oil industry.
In May 2026, the Venezuelan government announced the launch of a “formal, comprehensive and orderly” process to restructure its external public debt and PDVSA’s liabilities.
Financial Advisers and Key Figures
The Venezuelan government has hired US investment firm Centerview Partners as its financial adviser.
A key role in the negotiations is being played by French banker Matthieu Pigasse, a Centerview partner with long-standing connections to both Caracas and Washington. His candidacy was backed by former Trump special envoy for Latin America Mauricio Claver-Carone.
“We won this business because our team is a global leader with unique experience in the largest sovereign debt restructurings,” a Centerview representative said.
Restructuring Plan and Outlook
A detailed plan to restore the country’s debt sustainability is expected to be published in early July 2026. Centerview is developing a project that would allow Venezuela to re-enter international capital markets. However, the process will be lengthy. Experts warn the restructuring could drag on until 2027.
The main disputes will centre on the size of the debt write‑down: Atlantic Council analysts estimate the necessary reduction at 50% or more.
A particular complication is that a significant portion of Venezuela’s debt is owed to China and Russia. Washington has already called on the World Bank and the IMF to resume engagement with Venezuela.
Oil Sector as the Key to Recovery
Restoring the oil industry, according to Rystad Energy estimates, could cost more than $180 billion and take more than a decade. Even then, Venezuela would not be able to reach peak production levels of the 1990s.
Nevertheless, according to S&P Global, oil production in April 2026 rose 4.8% to 1.13 million barrels per day, and PDVSA aims to reach 1.37 million barrels by year‑end. Progress on the restructuring is expected to boost investor confidence in the country’s oil sector.
