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, July 27, 2012

July 27th, 2012

Economics & Finance

Exchange controls to remain despite MERCOSUR entry
President Hugo Chávez says Venezuela will continue to have full freedom to set its monetary, exchange and tax policy upon its entry into the Common Market of the South (MERCOSUR). After a meeting with Brazilian senior authorities, he emphasized that the trade bloc is not a supra-national scheme set to impose domestic policy related issues. "We have full freedom to keep exchange control, Cadivi (Foreign Exchange Administration Board) and mechanisms, such as Aladi (Latin American Integration Association) and many other mechanisms," he remarked. (El Universal, 07-26-2012;

Venezuela's socialist model clashes with MERCOSUR, according to Carlos Larrazabal, President of the National Council of Industries (CONINDUSTRIA). "Many restrictions placed by MERCOSUR totally contradict socialist guidelines and policies" established in the First National Socialist Plan for 2007-2013, he says. More in Spanish: (El Universal, 07-27-2012;

Shortage is in the lowest level
According to the DATANALISIS polling firm, the level of food shortages was at its lowest level this year dropping 1.2 percentage points over the previous survey to reach 13.8%. According to measurements, no product was in the serious shortage category (over 40%) and nine items were placed in the level of scarcity significant (between 11% and 40%). More in Spanish: (Últimas Noticias, 07-23-2012;

"The priority is to have food, even if it is imported", says General Carlos Osorio, Minister for Nutrition, who also claims the government has over 22,000 sales outlets throughout the country, and serves over 16 million people. More in Spanish: (El Universal, 07-27-2012;

Venezuela hit with U$D 600 million of new arbitration claims
The administration of President Hugo Chavez faces new demands for compensation worth at least U$D 600 million at the World Bank after companies rushed to present their claims before the South American nation pulled out of the arbitration system. Spain’s Valle Verde Sociedad Financiera SL and Barbados- based companies Blue Bank International & Trust Ltd and Transban Investment Corp. filed separate claims to the bank’s International Centre for Settlement of Investment Disputes, said DLA Piper LLP, the law firm representing the investment firms. Miami-based DLA Piper partner Pedro Martinez-Fraga says: “The decision to file, sometimes it’s precipitated by knowing that you won’t have that remedy anymore.” (Bloomberg, 07-26-2012;


PDVSA loses U$D 2.19 billion in gasoline subsidies
Most Venezuelans are convinced that they live in a rich country with the largest oil reserves in the world, and are prone to think that energy prices mainly gasoline-should be cheap. (El Universal, 07-23-2012;; The Washington Post, 07-20-2012,

Oil sales to the US drop to 11%
Venezuelan oil exports to the United States slipped back again in the first half of 2012, according to preliminary data collected by the statistical arm of the US Department of Energy. The information supplied by the US government points out that in January-June 2012, approximately 823,000 barrels per day (bpd) of crude oil were shipped to US ports. This volume is 11% lower than the exports counted in the first half of 2011, which averaged 925,000 bpd. (El Universal, 07-26-2012;

Analyst says Venezuela will boost MERCOSUR'S energy capability.
According to Venezuelan expert Miguel Jaimes, the nation´s entry to MERCOSUR will add the largest proven and certified oil reserves on earth, as well as the eight largest gas reserves: 297.57 billion barrels of oil and 196 billion cubic feet of gas. He also says Venezuela's electricity generating potential is over 25.000 megawatts. More in Spanish: (AVN, 07-27-2012;ética-mercosur)

Zulia power generation system expanded, according to the government
President Chavez has inaugurated the Bajo Grande thermoelectric power plant, with 100 megawatts-generating capacity in Zulia state. (AVN, 07-22-2012;

Butene plant opened in western Venezuela
President Hugo Chavez inaugurated a plant to process organic chemical compound 1-butene at Petrochemical Complex Ana Maria Campos, in the Sur del Lago region of the western state of Zulia. The plant is to provide the compound necessary to ensure a total coverage of plastic manufacturing process in the country. 1–Butene (C4H8) is a colorless, flammable, liquefied gas with a slightly aromatic odor which may be used in the production of plastics, lubricants, mercaptans, flavors and fragrances. (AVN, 07-22-2012;–butene-plant-western-venezuela)

Iran builds oil tanker for Venezuela, demonstrating shipbuilding capabilities
Iran’s official news agency is reporting the country has finished building an oil tanker for Venezuela, a key ally. The IRNA report says the project means Iran has joined countries with capability of building oil tankers. It comes as Iran considers building nuclear-powered freighters and oil tankers. That could provide a reason to increase the level of its uranium enrichment for fuel. The West suspects Iran is aiming at building nuclear weapons. Iran denies that. (The Washington Post, 07-24-2012;

Logistics & Transport

29 ships remain at bay in Puerto Cabello
Ships continue arriving at the port of Puerto Cabello, primarily bearing basic foodstuff. According to Port authority reports, 21 ships are at dock: 11 bear in bulk products and in transit time remains at 21 days. More in Spanish: (El Carabobeño, 07-27-2012;; Notitarde,

Restrictions to continue on US air carriers
US carriers will continue to be restricted by Venezuelan authorities, who met with airline carriers to reiterate a policy adopted weeks ago. More in Spanish: (El Universal, 07-27-2012;


Venezuela is now out of ICSID
On Wednesday, July 25th, Venezuela's withdrawal from the International Center for Settlement of Investment Disputes, or ICSID, went into effect. (AVN, 07-25-2012;; El Universal,

... also withdraws from regional human rights court
President Hugo Chavez says Venezuela is withdrawing from the regional human rights court that Latin America's leftist leaders have increasingly criticized as a pawn of Washington. Allies of Venezuela including Bolivia, Ecuador and Nicaragua have accused the Inter-American Court of Human Rights of improperly weighing in on disputes still being heard in domestic courts and working to undermine leftist governments. (Reuters, 07-25-2012;; The Washington Post, 07-24-2012;

UN fears "devastating" effects from Venezuela's withdrawal from IACHR
The Office of the United Nations High Commissioner for Human Rights (OHCHR) says Venezuela's pullout of the Inter-American Court of Human Rights, Inter-American Commission on Human Rights (IACHR Court) would be "devastating" for the international organization. Spokesperson Rupert Colville told Efe that the move "will be not good for Venezuela either." (El Universal, 07-26-2012;

Chavez signals preference in US presidential race, comparing his rival to Romney
Hugo Chavez has signaled a preference in the U.S. presidential campaign by comparing Mitt Romney to his own challenger. Chavez, who is up for re-election a month before U.S. President Barack Obama, has in recent weeks expressed a clear preference for the man currently in the White House. In a campaign speech Saturday night, Chavez equated the agenda of his challenger, Henrique Capriles, with that of Romney, saying both men represent the callously selfish capitalist elite. (The Washington Post, 07-22-2012;

REPSOL should reach friendly deal with Argentina over YPF, says Chavez
President Hugo Chavez indicated that Spain's REPSOL SA come to a "friendly" agreement with Argentina's government as both parties remain in dispute over the recent nationalization of Argentine oil and gas company YPF SA (YPF). "I advise them to think it through very carefully," Mr. Chavez said in comments carried on state television, following a meeting with Argentine Planning Minister Julio de Vido. In May, Argentina's government expropriated 51% of YPF from its majority shareholder, REPSOL, after President Cristina Kirchner accused the Spanish company of under investing and using YPF's generous dividends to fund operations in other countries. (Fox Business, 07-24-2012;

No comments:

Post a Comment