Economics & Finance
Government considers denouncing investment protection treaties
A recently disclosed Venezuelan Foreign Ministry paper reveals that several meetings have been held to assess the possibility of denouncing several investment protection treaties signed with other nations; as well as a possible denunciation of the Convention on the Settlement of Investment Disputes between States and National of other States (ICSID Convention) in order to withdraw from the International Center for Settlement of Investment Disputes (Icsid). (El Universal, 09-14-2011; http://www.eluniversal.com/2011/09/14/venezuela-reviews-investment-protection-agreements.shtml)
Venezuelan bonds reach lowest level YTD on worsened risk perception
Despite a surge in the international bond market due to the agreement between Germany and France to aid Greece, The Venezuelan Global 27 closed at 66.75%, and the PDVSA 2022 at 76.5% of value, down from 86.5% in March. Brokers say the official announcements about gold repatriation and revising investment treaties have increased risk perception. More in Spanish at: (El Universal, 09-15-2011; http://www.eluniversal.com/2011/09/15/bono-marcador-venezolano-cae-al-nivel-mas-bajo-del-ao.shtml)
Central bank ponders keeping some gold reserves abroad
The board of directors of the Central Bank of Venezuela (BCV) is considering the possibility of keeping some of the gold reserves in foreign banks, so that they can be readily cashable, if necessary. BCV sources said that the number of gold ingots that will be brought to Venezuela and the gold bars that will remain in foreign financial institutions has not yet been determined. (El Universal, 09-14-2011; http://www.eluniversal.com/2011/09/14/central-bank-ponders-keeping-some-gold-reserves-abroad.shtml)
China has injected over U$D 30 billion into Venezuelan economy, U$D 4 billion more sought
Foreign Minister Nicolás Maduro has said agreements with China have brought over U$D 30 billion into the Venezuelan economy though two special funds. Venezuela has recently signed a long term agreement (2013-2030) with the China Development Bank to cover large investments in construction, telecommunications, health, technology and agriculture, among others. After a meeting between President Chavez and the President of the China Development Bank it was announced the Bank is currently financing 137 development projects locally. Maduro said there is a plan to install 3 refineries in China over the next 10-15 years to process heavy oil from the Orinoci Oil Belt. Chavez met this week with the Bank president to negotiate a new U$D 4 billion tranche. More in Spanish: (AVN, 09-14-2011; http://www.avn.info.ve/node/77403; http://www.avn.info.ve/node/77381 and http://www.avn.info.ve/node/77555; El Universal, 09-16-2011; http://www.eluniversal.com/2011/09/16/venezuela-negocia-nuevo-tramo-de-endeudamiento-con-china.shtml)
PDVSA has provided Treasury 61% of its annual fiscal contribution over first five months of 2011
According to the Central Bank. Petróleos de Venezuela (PDVSA) made a fiscal contribution of U$D 6.39 billion in five months. By the end of May, the state-owned oil company had transferred 61% of its expected fiscal contribution for 2011, which is projected at U$D 10.51 billion. (El Universal, 09-14-2011; http://www.eluniversal.com/2011/09/14/pdvsa-transfers-61-of-2011-contribution-to-the-treasury.shtml)
International reserves down slightly to U$D 31.113 billion
The Central Bank says international reserves remain over U$D 31 billion, although slightly down from U$D 31.223 billion last Monday. More information in Spanish: (El Mundo, 09-14-2011; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/reservas-internacionales-bajan-a-$31-113-millones.aspx)
Commodities
PETROBRAS-PDVSA talks on refinery hit snags
Brazilian federal oil company Petroleo Brasileiro (PBR, PETR4.BR) confirmed it is still talking to Petroleos de Venezuela SA (PDVSA) over a joint-venture deal to build a refinery in Brazil's Pernambuco state. PDVSA still faces several hurdles to officially take its expected 40% stake in the Abreu e Lima refinery currently under construction, and assume 40% of already contracted loans for the project and meet loan guarantee demands from the Brazilian National Development Bank, or BNDES. Petrobras has pledged to build the nearly U$D15 billion refinery with or without the participation of PDVSA, and would be able to save some cash by not needing to install specialized equipment to process heavy crude from Venezuela's Carabobo field should PDVSA not participate. (Fox Business, 09-13-2011; http://www.foxbusiness.com/industries/2011/09/13/brazil-petrobras-in-talks-with-venezuelas-pdvsa-on-refinery-jv/#ixzz1XvcBLRQT)
Venezuela's PDVSA says upgrader to halt on Sept 21
Venezuela's state-run oil company PDVSA announced that its 130,000-barrels-per-day Petroanzoategui heavy crude upgrader will shut down for planned maintenance on Sept. 21. The company announced the suspension of operations in a statement that did not mention how long the upgrader was expected to be closed. In February the local oil workers' union said the scheduled shutdown would last 40 days. (Reuters, 09-14-2011; http://www.reuters.com/article/2011/09/14/venezuela-upgrader-idUSS1E78D1WQ20110914)
Venezuelan oilmen find opportunities in Colombia
Oil workers banished by President Hugo Chavez have taken their experience drilling for Venezuela’s tar-like oil to countries as varied as Iraq, Nigeria and Canada. But the presence of Venezuelan petro-scientists has been most vital here in Colombia, where they have helped oil companies sharply increase the production of crude, much of which is exported to the United States. Colombia is now on the verge of achieving what just a few years ago were unthinkable: pumping 1 million barrels of oil a day, up from 540,000 barrels daily in 2005. (Washington Post, 09-12-2011; http://www.washingtonpost.com/world/americas/venezuelan-oilmen-find-opportunities-in-colombia/2011/09/12/gIQAiOcjTK_story.html)
Politics
Presidential elections in Venezuela scheduled for October 7, 2012
The National Electoral Council (CNE) has announced presidential elections for the 2013-2019 term will be held on October 7, 2012. It was decided unanimously that the presidential, governors and municipal elections would be carried out at different dates. Elections for governors will be held in December 2012 and municipal elections in April 2013. (AVN, 09-13-2011; http://www.avn.info.ve/node/77081)
Chavez to undergo fourth and last chemotherapy round, will skip UN General Assembly
President Chávez has announced he will soon begin the fourth and last round of chemotherapy. He explained he will undergo a comprehensive evaluation in October to “verify there are no malignant cells. Once that is done, we would enter a new stage.” However, he expects not to attend a United Nations General Assembly meeting this month in New York because of cancer treatment. (Veneconomy, 09-13-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=27579&idc=1 and Bloomberg, 09-15-2011; http://www.bloomberg.com/news/2011-09-15/chavez-says-he-will-likely-start-new-round-of-chemo-on-sept-19.html)
Chávez avoids comment on China's recognition of Libyan rebels
President Hugo Chávez refrained from giving an opinion on a decision of the Chinese government to recognize the National Transitional Council (NTC) as Libya's official government. He reckoned that the Beijing had his reasons to do so. He says: “Beijing will certainly have reasons to do so. I am not going to question that decision". (El Universal, 09-13-2011; http://www.eluniversal.com/2011/09/13/chavez-avoids-assessing-chinas-recognition-of-the-ntc.shtml)
Chavez aims for 2012 re-election, says he will seek additional enabling powers after victory
Venezuela's 2012 presidential election race has kicked off with President Hugo Chavez confident of victory in South America's biggest oil exporter next year. The socialist leader has won three presidential votes during 12 years in power and has vowed to emerge triumphant again -- despite undergoing chemotherapy treatment for cancer. He recently said: “Once we achieve a ‘bolivarian’ victory on October 7th I may ask for a Special Enabling Law from October to February, for a transition from my Third Government to my Fourth Government” (Reuters, 09-14-2011; http://www.reuters.com/article/2011/09/14/us-venezuela-chavez-fb-idUSTRE78D45N20110914 and more in Spanish: El Universal, 09-15-2011; http://www.eluniversal.com/2011/09/15/chavez-pedira-ley-habilitante-si-gana-las-elecciones-de-2012.shtml)
Trade with Argentina rose 23% over the first semester 2011
Trade between Argentina and Venezuela totaled U$D 749,2 million over the first semester of 2011, an increase of 23% over the same period in 2010.Argentina sold U$D 742,6 million – mainly in food and beverages - and bought only U$D 6,6 million from Venezuela. More in Spanish: (El Nacional, 09-15-2011; http://www.el-nacional.com/)
Billionaire Cisneros seeking to buy Spanish assets amid crisis
Venezuelan billionaire Gustavo Cisneros is looking to buy Spanish companies as the European debt crisis drives down asset valuations. Cisneros says he has decided to “look at Spain again. It’s a natural market for us. These are good companies, especially companies that export to Latin America.” He added: “Media obviously in Spain for us would be a natural, but I don’t discard manufacturing companies. I’m not interested in banking.” Cisneros is also setting up joint ventures with Chinese banks to carry out investment in Latin American commodities industries. (Business Week, 09-15-2011; http://www.businessweek.com/news/2011-09-15/billionaire-cisneros-seeking-to-buy-spanish-assets-amid-crisis.html)
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