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.

Tuesday, August 28, 2012

August 28th, 2012

Economics & Finance

Giordani: inflation is likely to end the year below 20%
Planning and Finance Minister Jorge Giordani says it is highly likely that by the end of 2012 the rate of inflation could be below the 20% projected in the 2012 budget. More in Spanish: (AVN, 08-27-2012;ón-cierre-año-debajo-20)

The Food Industry Association (CAVIDEA) reports a negative trend in the sale of basic food products, down from -4.25% tons in June to -3.49% tons in July. (Veneconomy, 08-24-2012;

TENARIS brings a second suit against Venezuela at ICSID
The number of lawsuits against Venezuela continues to increase at the International Center for Settlement of Investment Disputes (ICSID). It now stands at 28 cases as TENARIS and TALTA Trading and Marketing have brought an additional suit over takeover of a briquette producing plant. Venezuela is subject to 18.5% of cases currently being processed by ICSID. It formally requested to drop out of the organization last July, but investment treaties still in force call for this Center to be involved in resolving all controversies. More in Spanish: (El Nacional, 08-28-2012;

Stock market up 152.74%
Venezuela's stock market rose sharply again for the week ending August 24, as the Caracas Stock Index went up 6.6% to close at 295,797 -- a new 52 week high. The rally has been driven in part by Banco Provincial shares, which declared a dividend of VEB 11.3 per share to be paid on an as yet undetermined date. Provincial shares rose 7.14% to VEB 105. The big winner this week was SIVENSA, up 12.5% at VEB 18. Mercantil Servicios Financieros A rose 6.7% to VEB 87, while the B shares were up 5.5% at the same price. MANPA shares also rose 5.9% to VEB 4.5. All other stocks were flat or did not trade as volume remained low. The Venezuela Stock Market is now up 152.74% for the year to date. (Latin American herald Tribune, 08-26-2012;


Venezuela struggles with refinery blaze after deadly blast
Venezuelan firefighters struggled on Sunday to put out a blaze at the country's biggest refinery sparked by an explosion that killed 41 people in one of the global oil industry's deadliest accidents. Officials at the 645,000 barrel-per-day Amuay refinery are trying to stop the fire still raging at two storage tanks from spreading to other nearby fuel storage facilities. That would delay Amuay's restart beyond the current estimate of two days. The incident may support world fuel prices, which are already expected to rise with crude oil as tropical storm Isaac threatens to disrupt industry operations in the Gulf of Mexico. (Reuters, 08-27-2012;;; Bloomberg,; The New York Times,; The Washington Post,

Early PDVSA reports point to gas leak as the cause for the accident, Government now hints at sabotage
Eulogio del Pino, PDVSA's Vice President for Production and Exploration said a propane gas leak was detected around midnight and the explosion took place around 1 AM. His statement is supported by those of the Amuay plant's General Manager, Jesús Luongo, and early claims by Minister Rafael Ramirez himself; all of which point to the failure of contingency plans. The Government is now denying there was a gas leak and insinuating "sabotage". More in Spanish: (El Universal;

PDVSA's Annual reports reflect shortcomings in maintenance at Amuay, and point to electricity outages, lack of resources and qualified personnel, fewer materials and equipment, as well as delays in payment to service providers as the main causes for lack of maintenance at national refineries. Oil Minister and PDVSA President Rafael Ramírez and PDVSA Vice President Asdrúbal Chavez - the President's cousin - are now denying the fatal accident took place due to lack of maintenance.  More in Spanish: (El Universal;

Fire may be extinguished in the coming hours at Amuay refinery, officials downplay disaster
Petroleum and Mining Minister Rafael Ramirez claimed yesterday that the Amuay fire may be extinguished in a few hours. The plan would be to reduce the fire at one of the tanks of catalytic naphtha to then go to the second tank, so as to extinguish the fire completely, he said on Government television. PDVSA's Vice President for Exploration and Production, Eulogio del Pino is saying that the remainder of oil production remains normal; as the General Manager of the complex claimed it would take at least 4 days to restart operations. He also said that loading and unloading docks had been reopened and distillation and gasoline fractioning units were already in operation. (AVN, 08-27-2012;; El Universal, AVN, 08-27-2012;; (El Universal, 08-27-2012;

Chávez in Amuay: "The show must go on"
"A philosopher, cannot remember which, said that the show must go on, with our sorrow, grief and dead." These were the words used by President Hugo Chávez to address the disaster at the Paraguaná Refining Center. During a brief visit to the Center he also sang to one of the victims. (El Universal, 08-27-2012;; AVN,; CNN,

Logistics & Transport

Venezuela and China sign agreement to build second railway in Guyana
Venezuela and China signed an agreement to create a second railway line at CVG Ferrominera which would raise rail transport capacity of 22 to 40 million tons. More in Spanish: (El Mundo, 08-27-2012;


Venezuela said to sponsor peace talks with Colombia's FARC guerrillas
Colombia's former Vice President Francisco Santos has said Venezuelan President Chavez has been one of the key agents for contacts with the FARC guerrilla, which allegedly will enter new peace talks with the Colombian Government in Oslo on October 5th. He also said the talks would involve the non-extradition of chief guerrilla leaders, many of which are sought internationally on charges of drug trafficking and terrorism. More in Spanish: (El Nacional, 08-28-2012;

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