Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Friday, September 23, 2011

September 23th, 2011

Economics & Finance

Venezuela proposes U$D 1 billion compensation for EXXON MOBIL
Venezuela has proposed paying EXXON MOBIL Corp U$D 1 billion in compensation for the nationalization of its assets in 2007. In a telephone call to Reuters, Energy Minister Rafael Ramirez denied that the government of President Hugo Chavez was negotiating with Exxon separately from an ongoing arbitration process at New York's International Chamber of Commerce. "Our proposal is $1 billion for its assets .... We are not in negotiations with EXXON MOBIL, nor has it crossed our minds to approach them," Ramirez said. His statement seemed to contradict an earlier one made by Solicitor General, who had told media: “Venezuela has to pay -- we are clear on that. The problem now is how much we will pay”. (Reuters, 09-21-2011;; Bloomberg, 09-21-2011;

IMF: Venezuela has region’s worst outlook
In its latest edition of the World Economic Outlook, the International Monetary Fund (IMF) forecast that Venezuela's economy should expand 2.8% this year, with an inflation rate of 25.8%. According to the intergovernmental organization, Venezuela has the worst outlook in South America and a poor performance among oil exporters.
The projected economic growth in the countries of the region is higher than Venezuela's, with their inflation rate much lower, at 7.9% on average. (El Universal, 09-21-2011;

World Bank calls Venezuela unresponsive to global crisis
The World Bank says that within the emerging environment it will be essential for Latin American economies to leverage their connections with China. The institution added that although Venezuela has ties with the Asian country, it is included in the group of low- and medium-growth countries. (El Universal, 09-21-2011;

Closer to Zimbabwe
Venezuela ranked 139th –down one rank from 2010- with 4.23 points out of 10 in the 2011 Annual Report on Economic Freedom of the World, published by the Canadian Fraser Institute and by CEDICE Libertad in Venezuela. Zimbabwe once again received the worst ranking among the 141 countries studied, preceded by Myanmar, Venezuela and Angola. (Veneconomy, 09-22-2011;

Companies still waiting on foreign currency for dividends
Carlos Tejera, the general manager of the Venezuelan-American Chamber of Commerce and Industry (VenAmCham), said that none of the companies belonging to the trade organization has received foreign currency to repatriate dividends. He added that only 10 out of the 50 VenAmCham companies that have been seized by the government have received a compensation for their assets. (El Universal, 09-22-2011;

Costs Law to hit all economic sectors
The government is speeding up the mechanisms to implement the Law on Costs and Fair Prices starting November 22. Against all original statements, officials now say that the legislation will include all economic sectors. Trade Minister Edmée Betancourt says the Superintendent of Costs and Fair Prices will continue to assess cost structures, and that the study will first focus on food items, but later encompass all economic sectors. (El Universal, 09-22-2011;

Eight month liquidity is more than all of 2010
Central Bank figures show liquidity for the first eight months of this year has risen by 19,89%, which is more than 19,06% for all of 2010. More in Spanish at: (Tal Cual;

GDP projected to grow 3,1% this year and 3,4% in 2012
Cristina Rodríguez, director of METROECONÓMICA-ECOANALÍTICA, says a weakened global demand for hydrocarbons and renewed production in Libya will bring down the Venezuelan oil basked to an average U$D 85 per barrel. More in Spanish at: (El Universal, 09-23-2011;

International reserves up to U$D 30.842 billion
International Reserves on closed Tuesday at U$D 30,842 according to the Central Bank of Venezuela (BCV). More in Spanish at: (El Mundo, 09-22-2011;$30-842-millon.aspx)


US Department of Energy says Venezuela's oil policy will hinder Orinoco belt development
The US Department of Energy International Energy Outlook for 2011-2035 says sustained high oil prices will make it cost competitive to develop unconventional petroleum resources such as heavy crudes in the Orinoco belt, oil sands in Canada, deep-water oil reservoirs in Mexico. However, it adds that "for some resource-rich countries it is assumed that current political barriers to production increases will not continue after 2015. For instance, both Mexico and Venezuela currently have laws that restrict foreign ownership of hydrocarbon resources. Their resources policies have discouraged investment, both foreign and domestic, and hindered their ability to increase or even maintain historic production levels." (El Universal, 09-21-2011;

Central bank to purchase gold produced in Venezuela
The Central Bank of Venezuela (BCV) was designated as the entity responsible of the purchase of gold obtained from mining activities in Venezuela following the recently issued law that reserves exploration and development of gold activities to the State. (El Universal, 09-22-2011;

Logistics & Transport

Air Cargo: Monterrey, Caracas Gain
Airports in Monterrey, Caracas and Buenos Aires were among the fastest-growing in cargo traffic in Latin America last year, according to a Latin Business Chronicle analysis based on data from Swiss-based Airports Council International (ACI).  Cargo traffic at Monterrey (MTY), the 20th-largest cargo airport in Latin America, grew 42.4% to 48,710 metric tons. Meanwhile, traffic at Caracas (CCS), the 14th-largest cargo airport, grew 39.6% to 85,655 metric tons.  And at the Aeroparque Jorge Newbery in Buenos Aires (AEP), the 34th-largest cargo airport, traffic grew 38.3% to 18,945 metric tons. The three were among the top five winners in Latin American cargo growth last year. (Latin Business Chronicle, 09-19-2011;


Chavez said "The chemotherapy cycle is over, we will now work on a full recovery", as he returned to Venezuela from Cuba. He added: “I know speculation continues, let’s not pay attention. I feel well and will continue to undertake my duties at an adequate pace”. More in Spanish at: (Enfoques 365; 09-23-2011;

Solicitor General to challenge IACHR Court ruling
Solicitor General Carlos Escarrá says independence and national sovereignty will be official arguments for asking the Supreme Court to support the Government’s position of disregarding the ruling by the Inter-American Court of Human Rights (IACHR Court), which orders political reinstatement of opposition leader and former Chacao municipality mayor Leopoldo López, and would allow him to participate in primary elections to be held in 2012. (El Universal, 09-22-2011;

Chavez opponents prepare for Venezuela's 2012 vote
Venezuela's opposition coalition will pick a unity candidate in February to fight the 2012 presidential election and try to scupper President Hugo Chavez's re-election bid. Henrique Capriles Radonski. The youthful governor of Venezuela's second most populous state, Capriles has emerged as the strongest candidate in a crowded field, according to polls. (Reuters, 09-22-2011;

Expert: Guyana's request is a hostile act against Venezuela
Aníbal Martínez, head of non-governmental organization Instituto de Defensa del Petróleo (Institute for the Defense of Oil), considers Guyana's request to extend its continental shelf from 200 miles to 350 miles is "the culmination of a series of hostile acts that have been carried out by this country against Venezuela, while our country has not exercised its legitimate right to defend territorial integrity." He adds that: "Venezuela has indisputable rights in its Atlantic front." (El Universal, 09-22-2011;

Peru seeks trade complementation agreement with Venezuela
Peruvian Trade and Tourism Minister José Luis Silva say his country seeks to close negotiations for a trade complementation agreement with Venezuela before October 19, which will mark the end of bilateral tariff preferences by Venezuela within. More in Spanish at: (El Nacional, 09-22-2011;

Chavez in telephone conversation with CARICOM leaders about ALBA
President Hugo Chávez held a telephone conference with representatives of the 14 nations within the Caribbean Community (CARICOM), about a possible agreement between this regional grouping and ALBA toward an integrated economic area for South America and the Caribbean. More in Spanish: (Agencia Venezolana de Noticias, 09-23-2011;

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

No comments:

Post a Comment