Economics &
Finance
Venezuela repays nearly half of U$D36
billion in Chinese loans
Venezuela has repaid close to half of U$D 36 billion
borrowed from China through oil-for-financing agreements, says Oil Minister
Rafael Ramirez. The government of President Hugo Chavez has increasingly relied
on China for financing because its borrowing costs in international capital
markets are among the highest in the world. "We've received U$D 36 billion through credits with China ... and of
that, we've paid U$D 17.9 billion," Ramirez said during a
congressional hearing. (Reuters, 11-07-2012; http://www.reuters.com/article/2012/11/07/venezuela-china-loans-idUSL1E8M7J9E20121107)
Exxon, Conoco arbitration rulings expected
in late 2013
Venezuela expects international arbitration rulings by
late 2013 in multi-billion-dollar claims by Exxon Mobil and ConocoPhillips over
nationalizations by President Hugo Chavez's government, the oil minister said. Of
more than 20 cases against Venezuela at the World Bank and the International
Chamber of Commerce's panels, the biggest involve Conoco (COP.N) and Exxon
Mobil Corp (XOM.N), which are seeking some U$D40 billion between them. Both
companies filed for arbitration after Chavez ordered foreign firms to slash
their stakes in production and upgrading projects for heavy crude oil in the
Orinoco Belt as part of a 2007 wave of state takeovers. "We don't expect resolutions this year.
Probably the biggest cases (Conoco and Exxon) will be resolved in the second
half of 2013," Oil Minister Rafael Ramirez told Reuters. (Reuters,
11-08-2012; http://www.reuters.com/article/2012/11/08/us-venezuela-arbitrations-idUSBRE8A712620121108)
Inflation down for the 10th
consecutive month
The annual rate of the National Consumer Price Index
(NCPI) was 17.9% in October, far below the 2012 target of 20-22% set by the
government. The Central Bank and National Statistics Institutes report that "this
annual rate maintains the downward trend observed for 10 consecutive months,
which began in December 2011 at 27.6%". (AVN, 11-07-2012; http://www.avn.info.ve/contenido/inflation-declines-tenth-consecutive-month-bcv-says; El Universal, http://www.eluniversal.com/economia/121107/central-bank-president-cherishes-inflation-at-14-16-in-2013;
http://www.eluniversal.com/economia/121107/shortage-in-october-near-its-peak-in-53-months;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=32728&idc=2)
Central Bank says gold sale ensures
profits
The Central Bank sold 4.9 tons of gold out of its
reserves, and Nelson Merentes, president of the institution, says such operations
yield profit to the bank. He stressed that the gold price has been on the rise since
2006. Today it is worth U$D 1,720 per ounce, an upward trend that favors
transactions. He added that the institution buys gold in local currency
(bolívares) at U$D 900 and then it sells it at U$D 1,700. "They all do the same; all banks must
generate profits." (El Universal, 11-08-2012; http://www.eluniversal.com/economia/121108/central-banks-president-gold-sale-ensures-profits)
Central bank aid to PDVSA at U$D 29
billion
Financial assistance to state-owned oil company PDVSA by
the Central Bank (BCV) continues to rise. BCV data shows that by the end of
October, the financial institution's aid to the oil company increased by 79% over
the last 12 months. By October 26, the BCV had allocated U$D 29 billion to
Pdvsa, compared to only U$D 16.2 billion during the same period in 2011. (El Universal, 11-07-2012; http://www.eluniversal.com/economia/121107/central-bank-assistance-to-state-run-pdvsa-stands-at-usd-29-billion)
PDVSA to contribute U$D 60 billion
in taxes and to social programs this year
PDVSA says its contributions to the tax authority and to
social programs will reach U$D 60.3 billion this year. Oil and Mining Minister,
and also PDVSA President Rafael Ramirez also told the National Assembly that
26% of the funds it turns over to the government are going to the National
Development Fund (FONDEN), which is 11% above contributions made last year.
More in Spanish: (El Universal, 11-09-2012; http://www.eluniversal.com/economia/121109/60-millardos-dara-pdvsa-al-fisco-y-a-misiones-este-ano)
Commodities
A Russian company in the consortium working the Orinoco Belt
abandons project
The board of directors of the fourth greatest oil
producer in Russia, SURGUTNEFTEGAZ, voted for pulling out of the Russian
consortium that operates in the Orinoco Oil Belt, its last project abroad, said
the company on Wednesday. The Russian consortium has a 40% stake in the PETROMIRANDA
joint venture. (Veneconomy, 11-07-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32721&idc=4)
Amuay refinery operations seen
normal by year-end
The 645,000 barrel per day (bpd) Amuay refinery should be
operating normally at about 500,000 bpd by year-end once it finishes repairs to
a distillation unit damaged by an explosion in August, the country's energy
minister said.
State oil company PDVSA had initially said the August 25
blast that killed more than 40 people had only affected storage tanks of its
largest refinery. Amuay has been operating at around 50% capacity since then. Rafael
Ramirez, who is also PDVSA president, told Reuters that Amuay's management
determined that the explosion had damaged a furnace at an 180,000 bpd facility,
one of five distillation units at Amuay. "The (replacement parts) arrive in December, and about three weeks after
that we should have that unit in service, so we can reach the operational level
the refinery was at before the incident, which was about 500,000 barrels per
day," he said. (Reuters, 11-08-2012; http://www.reuters.com/article/2012/11/08/us-refinery-operations-pdvsa-amuay-idUSBRE8A710V20121108)
SIDOR losses around U$D 580 million;
steel rod production down 29.4%
The SIDOR government steel complex is registering around U$D 580 million
in losses to date, and year end production is expected to be at 1.8 million
tons of liquid steel - down from a 4.3 million ton capacity - according to
company director Pedro Acuña Grahan, who represents class B stockholders. Acuña
called for an audit and assigning responsibilities for losses. He says when the
government took over the company its assets were above U$D 3.4 billion and it
now is in debt for more than U$D 900 million and decay is such that capacity is
down 50%, and the technology infrastructure has been partially destroyed. In the meantime, steel rod production -
essential for public and private housing construction plans - is reported down
29.4% in October. SIDOR has a 50% share of the steel market. More in Spanish:
(El Universal, 11-09-2012; http://www.eluniversal.com/economia/121109/advierten-que-las-perdidas-de-sidor-llegan-a-580-millones,
http://www.eluniversal.com/economia/121109/la-produccion-de-cabillas-tuvo-una-caida-de-294-en-octubre)
International Trade
Venezuela imports from the US
steadily rising
The US Department of Commerce reports Venezuela's imports from the US
rose 71.6% during the last year, with U$D 2025 billion in September, up from
U$D 1179 billion during the same month last year. January to September totals
U$D 12.869 billion, which is above the amount for all of 2011. More in Spanish:
(Últimas Noticias, 11-09-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/venezuela-le-compra-cada-vez-mas-a-eeuu.aspx)
Politics
521 public protests in October
nationwide
The Venezuelan Watch Group on Social Conflict (OVCS) reports in October
alone there were 521 protest demonstrations and 11 strikes, which make it the
most conflict ridden month to date this year. 204 protests were about labor
rights, 197 over housing, 106 over crime and justice; and 14 over education
problems. More in Spanish: (El Universal, 11-09-2012; http://www.eluniversal.com/nacional-y-politica/121109/octubre-cerro-con-521-protestas-en-todo-el-pais)
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