Obligation Venezuella 9% ( USP17625AA59 ) en USD

Venezuella

100 % ▲

Venezuela

USP17625AA59 ( en USD )

9% par an ( paiement semestriel )

07/05/2023 - Obligation échue

Prospectus brochure de l'obligation Venezuela USP17625AA59 en USD 9%, échue

100 000 USD

2 000 000 000 USD

P17625AA5

Le Venezuela est une république fédérale présidentielle d'Amérique du Sud, riche en ressources pétrolières mais confrontée à une crise économique et politique profonde.

L'Obligation émise par Venezuella ( Venezuela ) , en USD, avec le code ISIN USP17625AA59, paye un coupon de 9% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 07/05/2023

LISTING MEMORANDUM

Bolivarian Republic of Venezuela
U.S.$2,000,000,000 9.00% Bonds due 2023 (the "Bonds due 2023")
U.S.$2,000,000,000 9.25% Bonds due 2028 (the "Bonds due 2028")
____________

The Bonds due 2023 will bear interest at the rate of 9.00% per annum, accruing from May 7, 2008 and will pay interest on May 7
and November 7 of each year, commencing November 7, 2008. The Bonds due 2023 will mature on May 7, 2023.
The Bonds due 2028 will bear interest at the rate of 9.25% per annum, accruing from May 7, 2008 and will pay interest on May 7
and November 7 of each year, commencing November 7, 2008. The Bonds due 2028 will mature on May 7, 2028.
Neither the Bonds due 2023 nor the Bonds due 2028 (each of the Bonds due 2023 and the Bonds due 2028 being referred to
herein as a "Series" of Bonds and collectively as the "Bonds") are redeemable prior to maturity or are entitled to the benefit of
any sinking fund. The Bonds are direct, unconditional and unsecured obligations of the Bolivarian Republic of Venezuela (the
"Republic" or "Venezuela"). Venezuela has applied to list the Bonds on the Official List of the Luxembourg Stock Exchange
(the "Exchange") and to trade the Bonds on the Euro MTF market of the Exchange. This Listing Memorandum constitutes a
prospectus for the purposes of the Luxembourg law dated July 10, 2005 on Prospectuses for Securities.
The Bonds are designated Collective Action Securities and, as such, contain provisions regarding future modifications to their
terms that differ from those applicable to a substantial portion of Venezuela's outstanding public issues of capital market
indebtedness. Under these provisions, which are described in the section entitled "Description of the Bonds--Meetings and
Amendments" in this Listing Memorandum, Venezuela may amend the payment provisions and certain other terms of the Bonds
with the consent of the holders of 75% of the aggregate principal amount outstanding of the Bonds.
The provisions relating to events of default in the Bonds differ from those contained in the substantial majority of its other
outstanding public issues of Venezuela's capital market indebtedness in that the Bonds do not contain an event of default
provision that would be triggered if Venezuela were to cease at a future date to maintain its membership in the International
Monetary Fund ("IMF") or to cease to be eligible to use the general resources of the IMF.
Issue Price:
Bonds due 2023: 115%
Bonds due 2028: 115%
in each case, plus accrued interest, if any, from May 7, 2008

Delivery of the Bonds is expected to be made on May 7, 2008 through the book-entry facilities of The Depositary Trust Company
("DTC") and its direct and indirect participants including Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking,
société anonyme ("Clearstream, Luxembourg").
See "Risk Factors" beginning on page 5 to read about certain risks you should consider before investing in the Bonds.
You should read this Listing Memorandum carefully before you invest.
The Bonds have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the
"Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States and
are subject to United States tax law requirements. The Bonds are being offered outside the United States in accordance
with Regulation S under the Securities Act ("Regulation S") and may not be offered, sold or delivered within the United
States or to, or for the account or benefit of, U.S. persons as defined in Regulation S except to persons in offshore
transactions in reliance on Regulation S. This Listing Memorandum has been prepared by the Republic solely for use in
connection with the offer and sale of the Bonds outside the United States pursuant to Regulation S.
Deutsche Bank Securities
Barclays Capital

This Listing Memorandum is dated as of May 9, 2008.

You should rely only on the information contained in this Listing Memorandum. The Republic has not
authorized anyone to provide you with different or additional information. The Republic is not making an
offer of the Bonds in any jurisdiction where the offer or sale is not permitted. You should not assume that the
information provided by this Listing Memorandum is accurate as of any date other than the date on the front
of this Listing Memorandum. The financial condition and prospects of the Republic may have changed since
that date.

TABLE OF CONTENTS
Listing Memorandum
ABOUT THIS LISTING MEMORANDUM ................................................................................................................1
FORWARD-LOOKING STATEMENTS .....................................................................................................................2
ENFORCEMENT OF CIVIL LIABILITIES ................................................................................................................4
RISK FACTORS ...........................................................................................................................................................5
USE OF PROCEEDS ..................................................................................................................................................10
DESCRIPTION OF THE BONDS ..............................................................................................................................11
PRINCIPAL ECONOMIC INDICATORS .................................................................................................................23
COUNTRY DESCRIPTION .......................................................................................................................................24
REGISTRATION AND BOOK-ENTRY SYSTEM .................................................................................................109
BANCO CENTRAL UNDERTAKING ....................................................................................................................110
CLEARING AND SETTLEMENT...........................................................................................................................111
VENEZUELAN TAXATION ...................................................................................................................................113
NOTICE TO VENEZUELAN INVESTORS............................................................................................................114
DEALER MANAGERS ............................................................................................................................................115
VALIDITY OF THE BONDS...................................................................................................................................116
GENERAL INFORMATION....................................................................................................................................116

i

ABOUT THIS LISTING MEMORANDUM
The Republic, having made all reasonable inquiries, confirms that this Listing Memorandum contains all
information with respect to the Republic and the Bonds which is material in the context of the issue and offering of
the Bonds, that such information is true and accurate in all material respects and is not misleading, that the opinions
and intentions expressed herein are honestly held, have been reached after considering all relevant circumstances
and are based on reasonable assumptions, and that, to the best of the Republic's knowledge and belief, there are no
other facts the omission of which would make any such information or the expression of any such opinions and
intentions materially misleading. The Republic accepts responsibility accordingly.
Neither of Deutsche Bank Securities, Inc. or Barclays Bank PLC (together the "Dealer Managers") makes any
representation or warranty, express or implied, as to the accuracy or completeness of this information, and nothing
contained in this Listing Memorandum is, or shall be relied upon as, a promise or representation, whether as to the
past or the future. The Dealer Managers have not independently verified any of such information and does not
assume any responsibility for its accuracy or completeness. The Dealer Managers do not warrant that no events
have occurred that have not yet been publicly disclosed by the Republic and that would affect the accuracy or
completeness of the information concerning the Republic included herein. Each person receiving this Listing
Memorandum acknowledges that (i) such person has not relied on the Dealer Managers or any person affiliated with
the Dealer Managers in connection with its investigation of the accuracy of such information or its investment
decision, and (ii) no person has been authorized to give any information or to make any representation concerning
the Republic or the Bonds other than as contained herein and, if given or made, any such other information or
representation by such persons should not be relied upon as having been authorized by or made on behalf of the
Republic or the Dealer Managers.
This Listing Memorandum does not constitute an offer of, or an invitation by or on behalf of the Republic or the
Dealer Managers to purchase, any of the Bonds. The Listing Memorandum may only be used for the purposes for
which it has been published. The distribution of this Listing Memorandum and the offer and sale of the Bonds in
certain jurisdictions may be restricted by law. Persons into whose possession this Listing Memorandum comes are
required by the Republic and the Dealer Managers to inform themselves about and to observe any such restrictions.
For a description of certain further restrictions on offers and sales of the Bonds and distribution of this Listing
Memorandum, see "Dealer Managers".
References to the "Republic" or "Venezuela" are to the Bolivarian Republic of Venezuela.
The Republic is a foreign sovereign state. Consequently, it may be difficult for investors to obtain or realize upon
judgments of courts in the United States against the Republic. See "Enforcement of Civil Liabilities" and "Risk
Factors--Legal Status and Enforcement" in this Listing Memorandum.
Effective January 1, 2008, the currency of Venezuela has been converted to the Bolívar Fuerte, each Bolívar Fuerte
representing one thousand Bolívares. Unless otherwise specified or the context requires, references to "dollars",
"U.S. dollars", "U.S.$" and "US$" are to United States dollars, references to "Bolívares" and "Bs." are to
Venezuelan Bolívares, references to "Bolívar Fuerte" and "Bs.F" are to the currency of Venezuela introduced
effective January 1, 2008 in replacement of Bolívares; references to "Euro", "EUR" and "" are to the lawful
currency of the European Union, references to "¥" are to Japanese yen, and references to "bpd" are to barrels per
day. As used in this Listing Memorandum, the term "billion" means one thousand million, or 1,000,000,000, and
the term "trillion" means one thousand billion, or 1,000,000,000,000. Historical amounts translated into Bolívares
or U.S. dollars have been converted at historical rates of exchange, unless otherwise stated. Unless otherwise noted
herein, all references to Venezuelan Bolívares refer to nominal Bolívares. All references to Bolívares Fuerte refer to
nominal Bolívares Fuerte. Certain amounts that appear in this Listing Memorandum have been rounded for ease of
presentation. Accordingly, figures shown as totals in certain tables may not represent an arithmetical aggregation of
the amounts that precede them.
1

FORWARD-LOOKING STATEMENTS
This Listing Memorandum contains forward-looking statements. Statements that are not historical facts, including
statements about Venezuela's beliefs and expectations, are forward-looking statements. Specifically, words such as
"anticipates", "estimates", "expects", "intends", "plans", "seeks", "believes" and "will", and words and terms of
similar substance used in connection with any discussion of future economic, social or political developments,
identify forward-looking statements. These statements are based on current plans, objectives, estimates and
projections and you should not place undue reliance on them. Forward-looking statements speak only as of the date
they are made, and Venezuela undertakes no obligation to update any of them in light of new information or future
events. Forward-looking statements include, but are not limited to:
·
Venezuela's statements regarding its prospects for continued political stability;
·
Venezuela's plans with respect to the implementation of its economic plan;
·
Venezuela's outlook for inflation, interest rates and its fiscal accounts; and
·
Venezuela's success in the development of the non-petroleum sectors of its economy.
Forward-looking statements involve inherent risks. Venezuela cautions you that many factors could affect the future
performance of the Venezuelan economy. These factors include, but are not limited to:
External factors, such as:
·
higher international interest rates, which could increase Venezuela's debt service requirements and
require a shift in budgetary expenditures toward additional debt service;
·
lower oil prices, which could decrease Venezuela's fiscal and foreign exchange revenues and could
negatively affect Venezuela's tax receipts, the balance of payments and the level of international
reserves;
·
recession or low growth in Venezuela's trading partners, which could lead to fewer exports from
Venezuela and, therefore, affect Venezuela's growth;
·
damage to the international capital markets for emerging markets issuers caused by economic
conditions in other emerging markets and the international capital markets generally, which could
affect Venezuela's ability to engage in planned borrowing;
·
changes in import tariffs and exchange rates of other countries, which could harm Venezuelan
exporters and, as a consequence, have a negative impact on the growth of Venezuela's economy;
·
changes in the international prices of commodities; and
·
a deterioration in relations between Venezuela and other countries in the region or other disruptions to
its international relations.
Internal factors, such as:
·
the effect of the Venezuelan Government's exchange control regime on the ability of domestic and
international businesses to obtain foreign currency to pay for imported goods and raw materials, as
well as Venezuela's ability to continue to attract foreign investment;
·
the Venezuelan Government's ability to pass legislation in support of Venezuela's economic plan, as
well as public support for legislation that has been enacted as part of Venezuela's economic plan;
·
the stability of the banking system;
·
general economic and business conditions in Venezuela, including a decline in foreign direct and
portfolio investment, high domestic inflation, high domestic interest rates and volatile unemployment
levels, each of which could lead to lower levels of growth, lower international reserves and diminished
access of both the government and Venezuelan businesses to international capital markets;
2

·
the Venezuelan Government's ability to contain inflationary pressures in the economy;
·
foreign currency reserves; and
·
the level of domestic debt.

3

ENFORCEMENT OF CIVIL LIABILITIES
Venezuela is a foreign state. As a result, you may not be able to effect service of process within the United States
against Venezuela or enforce against Venezuela judgments in the courts of the United States predicated on the civil
liability provisions of the federal or state securities laws of the United States. Venezuela has agreed to submit to the
jurisdiction of United States federal and New York state courts located in the Borough of Manhattan, New York,
New York, the courts of England located in London and the courts of Venezuela located in Caracas, and has waived
some immunities and defenses in actions that might be brought against Venezuela with respect to the Bonds. Under
Venezuelan law, neither Venezuela nor any of Venezuela's property have any immunity from the jurisdiction of any
court or from set-off or any legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution or otherwise), except that Venezuela, as well as Venezuela's
properties located in Venezuela, have immunity from set-off, attachment prior to judgment, attachment in aid of
execution of judgment and execution of a judgment in actions and proceedings in Venezuela.
4

RISK FACTORS
This section describes certain risks associated with investing in the Bonds. You should consult your financial and legal
advisors about the risk of investing in the Bonds. Venezuela disclaims any responsibility for advising you on these matters.
Investors are urged to read carefully the entirety of this Listing Memorandum and to note, in particular, the following
considerations.
Social and Political Risks
In prior years, events in Venezuela produced significant social and political tensions, which could worsen and have a
material adverse effect on Venezuela's economic growth and its ability to service its public debt.
Since 2001, the Republic has experienced frequent periods of political and social turmoil involving groups that oppose and
those that support the Chávez administration. In April 2002, a group of high ranking military officers publicly refused to
recognize President Chávez's authority and detained him in the Presidential Palace, effecting a brief coup d'etat. Between
December 2001 and February 2003, certain groups opposed to the Chávez administration staged four nationwide work
stoppages to protest against actions taken by the Government, the last of which involved the operations of Petróleos de
Venezuela, S.A. (or "PDVSA") and lasted between December 2, 2002 and February 3, 2003. The inclusion of part of the oil
sector in this general work stoppage severely crippled oil production but failed to achieve its primary objective of removing
President Chávez from power.
The most recent elections for state and local officials were held on October 31, 2004. Candidates supported by President
Chávez won 21 of the 23 gubernatorial elections; the two remaining governorships were retained by opposition parties. On
December 4, 2005, elections were held for the 167 seats in the Asamblea Nacional (the "National Assembly"). On
December 1, 2005, the principal opposition parties announced that their candidates would not participate in the elections.
The electoral authorities reported that approximately 25% of those eligible to vote participated in the elections. President
Chávez's political party, Movimiento Quinta República, or MVR, won 121 seats and other parties aligned with the Chávez
administration won the remaining seats.
On December 3, 2006, President Chávez was re-elected President for a six-year term, capturing 62.8% of the vote. Upon
his re-election, in December 2006 President Chávez proposed to the group of political parties aligned with his
administration the creation of a unified socialist political party, Partido Socialista Unido de Venezuela, or PSUV. PSUV
will be open to new members after the official creation of the party, which is anticipated to occur during the first half of
2008. As of December 2007, six political parties had joined PSUV. PSUV will be one of many political parties in
Venezuela.
On August 15, 2007, President Chávez submitted to the National Assembly a proposal to amend certain provisions in a
number of articles of Venezuela's existing constitution (the "1999 Constitution") in accordance with procedures contained
in the 1999 Constitution. In addition to the proposed amendments to the 1999 Constitution submitted by President Chávez,
members of the National Assembly have proposed additional changes. The National Assembly approved the proposed
amendments at the requisite three separate discussions and called for a referendum to be held on December 2, 2007 to
decide on whether to approve or disapprove of the proposed amendments. According to the figures announced by
Venezuela's National Electoral Council, or CNE, approximately 50.8% of the voters rejected the changes to the 1999
Constitution proposed by President Chávez and approximately 51.1% of the voters rejected the reforms proposed by the
National Assembly. As a result, under Venezuelan electoral law, neither set of proposals was approved by the voters.
On March 2, 2008, President Chávez announced a movement of troops towards Venezuela's border with Colombia and on
March 3, 2008 announced the suspension of diplomatic relations with Colombia as a result of the incursion by the
Colombian military into Ecuador and the killing by Colombian military forces of certain members of the Fuerzas Armadas
Revolucionarias de Colombia - FARC, including one of its leaders. During 2007, Colombia was among Venezuela's largest
trading partners. On March 7, 2008, the governments of Venezuela, Colombia and Ecuador announced a resolution of their
political disputes and restitution of normal diplomatic and trade relations as part of a diplomatic mission led by the
Organization of American States. Any similar or new political disputes between Venezuela and Colombia could have
adverse consequences on the Venezuelan economy.
Venezuela's regional elections for mayors and governors of all cities and states are scheduled to take place on November
23, 2008.
5

There can be no assurance that the significant domestic instability that existed during the periods between 2001 to 2004 will
not re-emerge. Such instability could have a material adverse effect on Venezuela's economic growth and its ability to
service its public debt.
Economic Risks
Certain economic risks are inherent in any investment in an emerging market.

Investing in an emerging market economy such as Venezuela carries certain economic risks which may be different from
that of more developed economies. These risks include economic instability that may affect Venezuela's economic results.
Economic instability in Venezuela and in other Latin American and emerging market countries has been caused by many
different factors, including the following:
· high levels of inflation;
· exchange controls;
· high interest rates;
· changes in currency values;
· wage and price controls;
· changes in economic or tax policies; and
· the imposition of trade barriers.

Any of these factors, as well as volatility in the markets for securities similar to the Bonds, may adversely affect the
liquidity of, and trading markets for the Bonds.
Foreign Exchange Control Regime
A devaluation of the Bolivar Fuerte could have a material adverse effect on the Venezuelan economy and its ability to
service its public debt.
The Republic suspended foreign exchange trading on January 23, 2003 in response to a significant decrease in the amount
of foreign currency generated from the sale of oil and an extraordinary increase in the demand for foreign currency which
combined to produce a decline in the level of the Republic's international reserves. On February 5, 2003, the Government
adopted a series of exchange agreements, decrees and regulations establishing a new exchange control regime. The Foreign
Currency Administration Commission ("CADIVI"), administers, manages and controls the new exchange control regime.
Purchases and sales of foreign currencies are centralized in Banco Central. The Ministry of Popular Power for Finance (the
"Ministry of Finance"), together with Banco Central, is in charge of setting the exchange rate with respect to the U.S. dollar
and other currencies.
On February 5, 2003, the Ministry of Finance and Banco Central fixed the U.S. dollar exchange rate at Bs.1,596 =
U.S.$1.00 for purchase operations and Bs.1,600 = U.S.$1.00 for sale operations. The exchange rate for the payment of the
public foreign debt was set at Bs.1,600 = U.S.$1.00 effective February 10, 2003.
On February 9, 2004, the Ministry of Finance and Banco Central changed the U.S. dollar exchange rate to Bs.1,915.20 =
U.S.$1.00 for purchase operations and Bs.1,920.00 = U.S.$1.00 for sale operations. The exchange rate for the payment of
external public debt was set at Bs.1,920.00 = U.S.$1.00.
On March 2, 2005, the Ministry of Finance and Banco Central further modified the U.S. dollar exchange rate to Bs.2,144.60
= U.S.$1.00 for purchase operations and Bs.2,150.00 = U.S.$1.00 for sale operations. The exchange rate for the payment of
external public debt was also set at Bs.2,150.00 = U.S.$1.00.
Effective January 1, 2008, the currency of Venezuela has been converted to the Bolívar Fuerte, which represents one
thousand Bolívares. Accordingly, from that date the U.S. dollar exchange rate has been set at Bs.F 2.1446 = U.S.$1.00 for
purchase operations and Bs.F 2.15 = U.S.$1.00 for sale operations.
Venezuela cannot assure you that the Bolívar Fuerte will not devalue in the future. Depreciation of the Bolívar Fuerte could
have a material adverse effect on Venezuelan companies and financial institutions, which could adversely affect the
Venezuelan economy and in turn, the Republic's ability to service its public debt and the market price of the Bonds.
6

Sovereign Credit Rating
Changes in Venezuela's credit ratings may adversely affect the value of the Bonds.
In September 2004, Moody's Investor Services assigned a "B2" rating with a "stable" outlook with respect to the
Republic's long-term foreign currency-denominated debt.
In November 2005, Fitch raised its rating for the Republic's foreign currency-denominated debt from "B+" to "BB-" citing
improvement in external debt and liquidity as a result of sound oil revenues. In October 2007, Fitch cut its outlook on
Venezuela's foreign currency-denominated debt rating from "stable" to "negative" citing an increasingly unsustainable
macroeconomic policy framework. In October 2007, Fitch also revised its outlook on PDVSA's long-term foreign and
local currency rating to "negative".
In February 2006, Standard & Poor's raised Venezuela's foreign currency debt rating from "B+" to "BB-", citing economic
growth and stronger international reserves. In October 2006, Standard & Poor's lifted its outlook on Venezuela's sovereign
debt from "stable" to "positive" citing the contribution of high oil prices to the continued improvement in Venezuela's debt
indicators. In January 2007, Standard & Poor's modified its outlook on Venezuela's sovereign debt from "positive" to
"stable" citing increased uncertainty with respect to government policy.
The information above was obtained from information available on the websites of the rating agencies.
Any actual or anticipated changes or downgrades in Venezuela's credit ratings could affect the market value of the Bonds.
Oil Dependency
Any sustained decline in international petroleum prices, and disputes with former joint venture partners, could have a
material adverse effect on the Venezuelan economy and its fiscal accounts.
The Republic, a member of the Organization of the Petroleum Exporting Countries ("OPEC"), is the world's ninth-largest
oil producer and fifth-largest oil exporter. The structure of the Venezuelan fiscal system has been highly dependent on
petroleum revenues. From 2003 through 2007, petroleum products accounted for an average of approximately 86.0% of the
Republic's total exports. During the same period, petroleum revenues accounted for an average of approximately 44.6% of
the Republic's total Central Government revenues and the petroleum sector accounted for an average of approximately
15.5% of Venezuela's gross domestic product, or GDP.
The average petroleum export price for the Venezuelan basket in 2007 was U.S.$64.95 per barrel, compared to U.S.$56.40
per barrel for 2006. There can be no assurance that Government revenues from petroleum activities will not experience
fluctuations as a result of changes in the international petroleum market. Any sustained decline in international petroleum
prices could adversely affect the Government's fiscal accounts and international reserves. Additionally, Venezuelan
petroleum production capacity may decrease if the necessary capital expenditures are not allocated to this sector.
In February 2007, President Chávez issued a law-decree under the authority conferred by the 2007 Enabling Law, pursuant
to which existing Orinoco Belt projects, namely Petrozuata, Sincor, Cerro Negro and Hamaca, were required to be
converted into Empresas Mixtas, or Mixed Companies, in which Corporación Venezolana del Petróleo, or CVP, a PDVSA
wholly-owned subsidiary, or another PDVSA subsidiary, holds an equity interest of at least 60% in accordance with the
Hydrocarbons Law. Pursuant to this law-decree, operators of the Orinoco Belt project will become Mixed Companies, with
PDVSA becoming the majority owner of the operations. The Ministry of Energy and Petroleum is required to make a
valuation of each new Mixed Company in order to determine the fair participation of the PDVSA subsidiary and to provide
any economic or financial adjustment as necessary. The law-decree also provided that existing profit-sharing agreements for
the exploration of the Golfo de Paria Oeste, Golfo de Paria Este and the blocks known as La Ceiba, as well as Orifuels
Sinovensa, S.A., must be converted into Mixed Companies.
In May 2007, CVP completed the acquisition process with respect to the four Orinoco Belt strategic associations,
Petrozuata, Sincor, Cerro Negro and Hamaca. In June 2007, Chevron Texaco, Statoil, Total, BP, Eni SpA (ENI), Petroleum
& Chemical Corp (Sinopec), and Ineparia agreed to convert their participations in the four Orinoco Oil Belt projects into
Mixed Companies controlled by PDVSA, increasing PDVSA's average participation in the projects to 78%. In the same
month, Moody's downgraded its credit rating on the Cerro Negro project from B1 to B3, and in June 2007, Moody's
7

downgraded its credit ratings on the remaining three Venezuelan heavy oil projects (Hamaca, Petrozuata and Sincor) from
B1 to B2.
ExxonMobil and ConocoPhillips, the majority partners in the Cerro Negro and Petrozuata projects, respectively, have
failed to reach a financial agreement with PDVSA regarding the required sale of their ownership interests. As a result, an
ExxonMobil affiliate filed a request for arbitration with the International Centre for Settlement of Investment Disputes, or
ICSID, as a result of it having been unable to successfully negotiate the terms of, or agree on the value of, the assets in the
Cerro Negro project being transferred to the Republic. Prior to the enactment of the law-decree, ExxonMobil had a 41.7%
interest in the Cerro Negro project. On January 25, 2008 the ExxonMobil affiliate commenced an additional arbitration
under the rules of the International Chamber of Commerce.
On December 27, 2007 and January 8, 2008 the ExxonMobil affiliate obtained from the U.S. District Court for the Southern
District of New York an attachment order totaling U.S.$315 million against accounts of a PDVSA affiliate, and on January
25, 2008 the ExxonMobil affiliate obtained a freezing injunction from the High Court of Justice in London preventing the
removal or non-ordinary course disposition of up to U.S.$12 billion in assets of PDVSA and its affiliates in the United
Kingdom and the non-ordinary course disposition of up to that amount of assets elsewhere in the world. A court in the
Netherlands has issued an order relating to the freezing of certain PDVSA assets in the Netherlands and in the Netherlands
Antilles. On March 18, 2008 the High Court of Justice in London lifted the U.S.$12 billion freeze order, which decision is
subject to appeal by ExxonMobil. There can be no assurance that ExxonMobil will not appeal the London High Court of
Justice's decision in order to reinstate the freeze order or that similar orders, attachments or injunctions will not be issued
against PDVSA and/or any of its subsidiaries.
Legal Status and Enforcement
Venezuela is a foreign sovereign state and accordingly it may be difficult to obtain or enforce judgments against it.
Venezuela is a foreign state. As a result, it may not be possible for investors to effect service of process within their own
jurisdiction upon the Republic or to enforce against the Republic judgments obtained in their own jurisdictions. Any such
restriction might have a negative impact both on the liquidity of an investment in the Bonds and the performance of an
investment in the Bonds.
Interest Rate Risks
Fluctuations in interest rates of the currency in which the Bonds are denominated may affect the market value of the Bonds.
Investors in the Bonds should be aware that an investment in the Bonds may involve an interest rate risk insofar as there
may be fluctuations in the interest rates of the currency of denomination of the Bonds. Fluctuations in interest rates of the
currency in which the Bonds are denominated may affect the market value of the Bonds. Such fluctuations might have a
materially adverse impact both on the liquidity of an investment in the Bonds and on the performance of an investment in
the Bonds.
Emerging Markets
Venezuela's economy is vulnerable to external shocks that could be caused by significant economic difficulties suffered by
its major regional trading partners or by more general "contagion" effects, which could have a material adverse effect on
Venezuela's economic growth and its ability to service its public debt.
Investment in the emerging markets generally poses a greater degree of risk than investment in more mature market
economies because the economies in the developing world are more susceptible to destabilization resulting from domestic
and international developments.
A significant decline in the economic growth of any of Venezuela's major trading partners, including the United States,
could have a material adverse impact on Venezuela's balance of trade and adversely affect Venezuela's economic growth.
The United States is Venezuela's largest export market. A decline in the United States' demand for imports could have a
material adverse effect on Venezuelan exports and Venezuela's economic growth.
In addition, because international investors' reactions to the events occurring in one emerging market country sometimes
have demonstrated a "contagion" effect with respect to other emerging market countries, in which an entire region or class
8