Updates prices

By Karin Strohecker and Marc Jones

LONDON, May 14 (Reuters) - Venezuela's international bonds rallied on Thursday after the country launched what is widely expected to be one of the biggest and most complex sovereign debt restructuring exercises ever undertaken.

Just over five months since U.S. forces' surprise capture of Nicolas Maduro, Venezuela's government said it had appointed U.S. advisory firm Centerview Partners for a rework of what is estimated to be hundreds of billions of dollars of sovereign and state-owned oil firm debt.

The move - seen as sign of gathering momentum - lifted Venezuela's long-defaulted dollar-denominated bonds to their highest level in more than a decade.

The higher-interest 11.95% 2026-maturing bonds were up nearly 2 cents to bid at just over 60 cents on the dollar, Tradeweb data showed. Some bonds issued by state oil firm Petroleos de Venezuela (PDVSA) rallied more than 3 cents, trading also at decade-highs at between 40 and 50 cents. USP17625AD98=TE, US716558AF83=TE, USP7807HAQ85=TE

"It is clearly a great signal," said Jean-Charles Sambor, head of EM debt at TT International in London, viewing it as a sign that a debt restructuring was now one of the top issues both Caracas and the White House wanted to address.

"The recovery rate will be high," he added, "because we are talking about a country where oil production and debt sustainability is improving sharply."

COMPREHENSIVE AND ORDERLY

The South American country - home to the world's largest proven oil reserves - and PDVSA owe an estimated $150 billion to $170 billion in debt and unpaid interest, a burden that needs to be reduced to make the economic situation viable.

The government said late on Wednesday it was aiming for a "comprehensive and orderly" overhaul that would cover both sovereign and PDVSA obligations, and aim for "substantial" debt relief.

Venezuela, under pressure from U.S. sanctions, defaulted on its external debts in 2017, though its bonds have risen steadily since U.S. President Donald Trump returned to the White House early last year.

Momentum has been picking up since the U.S. removed President Maduro in January and relations between Washington and acting Venezuelan President Delcy Rodriguez have grown closer since then.

"With financial advisers hired, the plan is to move 'expeditiously'," JPMorgan analyst Ben Ramsey said in a note to clients. "We remain MW (marketweight) Venezuela in our model portfolio, pending a better assessment of a debt sustainability framework."

Ramsey added though that the fact the process had started before the International Monetary Fund had provided its view on Venezuela's economic prospects and debt sustainability metrics did raise some questions about the process.