Economics &
Finance
Venezuela's internal debt up 40% in
the first half of 2012
Although the crude oil price is about U$D 100, due to an
official policy of extensive indebtedness internal and external debt rose by
18% during the first semester of 2012, according to data from the Finance and
Planning Ministry which reflects it rose from U$D 79.2 billion in December 2011
to U$D 93.5 billion by the end of June this year. (El Universal, 08-30-2012; http://www.eluniversal.com/economia/120830/venezuelas-internal-debt-up-40-in-the-first-half-of-2012)
Government has U$D 6 billion
available in the Chinese Fund
China and Venezuela contributed U$D 6 billion to establish the China
Fund as a way for the government to increase its liquid assets. The China
Development Bank disbursed U$D 4 billion and the Venezuelan National
Development Fund (FONDEN) U$D 2 billion. President Chávez has said the fund is
already activated and the Ministry of Foreign Affairs stated that the resources
were already deposited, stated AFP. (El Universal, 08-29-2012; http://www.eluniversal.com/economia/120829/venezuelas-government-has-usd-6-billion-in-the-chinese-fund)
Commodities
Venezuela in ‘no hurry’ to restart oil
refinery after fires
Venezuela is carrying out an “exhaustive” inspection of its biggest refinery before attempting to
restart processing after extinguishing a four-day fire yesterday caused by an
explosion that killed 48 people. State-owned Petroleos de Venezuela, S.A. is “in no hurry” to restart the Amuay
refinery and will allow for at least a one-day cooling-down period, Oil
Minister Rafael Ramirez told reporters in Falcon state near the plant.
(Bloomberg, 08-29-2012; http://www.bloomberg.com/news/2012-08-29/venezuela-in-no-hurry-to-restart-refinery-after-four-day-fire.html;
Reuters, http://www.reuters.com/article/2012/08/30/venezuela-refinery-idUSL2E8JU0O120120830;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=31892&idc=4;
CNN, http://edition.cnn.com/2012/08/29/world/americas/venezuela-refinery-problems/index.html?iref=allsearch)
Refinery disaster reveals weaknesses
in Venezuela oil company, financial hit expected
The deadly blast and fire at Venezuela’s biggest refinery
are prompting critics to question whether the state oil company has been
neglecting maintenance while helping fund government programs under President
Hugo Chavez.
Analysts say the disaster at the Amuay refinery could
also mean a financial hit for state-run Petroleos de Venezuela SA by forcing it
to further increase imports of fuel for domestic consumption. (The Washington
Post, 08-29-2012; http://www.washingtonpost.com/world/the_americas/refinery-disaster-reveals-weaknesses-in-venezuela-oil-company-financial-hit-expected/2012/08/29/c627c7da-f24e-11e1-b74c-84ed55e0300b_story.html)
Oil spill reported at Venezuelan
refinery in Curacao
Curacao's local press has reported a spill of
hydrocarbons at the Venezuelan Isle refinery, located in Curacao, and that
PDVSA officials responded ten days after the spill occurred. The Local
newspaper reported that the Coastguard noticed the spill on August 17, and informed
Harbor Safety Inspection (HVI). Nonetheless, responses did not come until
August 25. "It's incomprehensible
that Pdvsa waited until Saturday to send a cleaning team to the area and let
the situation get worse" said Peter van Leeuwen, chairman of Clean Environment on Curacao
(SMOC). (El Universal,
08-29-2012; http://www.eluniversal.com/economia/120829/oil-spill-reported-at-venezuelan-refinery-in-curacao)
PETROBRAS sees first of new
refineries starting up November 2014
The first processing train of the refinery joint venture with
Venezuela's Petroleo de Venezuela SA, or PDVSA, will be followed by a second
line in May 2015. The refinery will add 230,000 barrels of daily processing
capacity, Petrobras said. PETROBRAS currently processes about 2 million barrels
per day at 12 refineries, Downstream Director Jose Carlos Cosenza said during a
presentation. PETROBRAS will invest U$D71.6 billion in its downstream
operations through 2016. The investments are part of the company's U$D237
billion spending plan for 2012-2016. (Fox Business; 08-29-2012; http://www.foxbusiness.com/news/2012/08/29/petrobras-sees-first-new-refineries-starting-up-november-2014/)
Logistics
& Transport
Port delays cost U$D 16,000 per day
Ismael Pérez Vigil, Executive President of CONINDUSTRIA, the National
Federation of Industries, says port inefficiency increases costs as well as the
risk for goods, all of which lowers productivity, increases inflation and loses
international markets. At the same time, Carabobo state legislator Neidy Rosal
reports "There are approximately 15 grain carriers at bay waiting to be
offloaded because average stays are now 3 to 4 weeks, and each day costs around
U$D 16,000. In the past offloading was done in 72 hours." More in Spanish:
(Tal Cual, 08-30-2012; http://www.talcualdigital.com/index.html)
Politics
Chavez faces new election threats
It’s been a rough month for President Hugo Chávez. In
less than two weeks, he has had to deal with a deadly prison riot, a collapsing
bridge, flooding, an embarrassing confrontation with steel workers on live TV
and the country’s worst oil-industry disaster, which killed at least 41 and
still has families digging through the rubble looking for loved ones. The
avalanche of bad news would be hard on any leader, but this train of troubles
comes as Chávez, 58, is heading into an Oct. 7 presidential race that polls
suggest is getting tighter. For the last 14 years in office, Chávez has played
the roll of an energetic leader with a common touch. Even when his
administration had missteps, voters rarely held their charismatic comandante
accountable. But the scale of this month’s calamities might change that
dynamic, said Xavier Rodríguez Franco with Entorno Parlamentario, a legislative
watchdog group. “The events the country has had to face recently clearly show a
breakdown in the government’s ability to manage,” he said “And that breakdown
is dragging down the president’s image.” (Miami Herald, 08-30-2012; http://www.miamiherald.com/2012/08/30/2976134_p2/venezuelas-chavez-faces-new-election.html=)
Government Spins On Amuay Disaster, Evidence Mounts Of
Insufficient Maintenance
Although the Government is trying to convince Venezuelans that the Amuay
disaster is something normal and has little to do with bad management or bad maintenance,
evidence seems to show the opposite and is mounting fast. The leak of the report
by the refinery's underwriter is quite damming. The report says on page 8,
that while US$1 billion was budgeted for maintenance, only US$314 million was
actually spent. Less than US$ 2 billion was spent in the last four years. So,
when PDVSA's Asdrubal Chavez boasts that US$ 4 billion were spent on
maintenance in the same period, he clearly is talking about how much was
budgeted, not spent. Part of the problem is that Bariven, the PDVSA affiliate
in charge of imports, is now in charge of all the food imports of PDVAL, thus
it's just in time ability of yesteryear is no longer there. The result, even if
maintenance needs to be done, there are no materials for it. The report also
says that the target of PDVSA was to have 80% of the maintenance be preventive
and 20% corrective. However, the report concludes that it ended up being 69%
corrective, 31% preventive. (The Devils Excrement, 08-30-2012; http://devilsexcrement.com/2012/08/30/venezuelan-governmentt-spins-on-amuay-disaster-evidence-mounts-of-insufficient-maintenance/)
