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, February 26, 2013

February 26, 2013

Economics & Finance

Deficit is estimated at VEB 71 billion, according to the report on financial impact attached to the Law on Special Contributions for Extraordinary Oil Prices. More in Spanish: (El Universal, 02-26-2013;

Giordani calls for increased agriculture production
Finance and Planning Minister Jorge Giordani says the government can fight inflation by raising national production, particularly foods, in order to meet demand arising from high liquidity. He says: "We can import, but we need to produce whatever we can, and this is the effort we must make if we are to abate inflation". More in Spanish: (Tal Cual, 02-26-2013;

Central Bank of Venezuela expands VEB 100-bill issue by 97%
Relentless price increases force consumers to use more a high value bills and use fewer bills and coins for VEB 2 and VEB 5. Consequently, official data shows that in 2012 the Central Bank printed more than 272 million VEB 100 bills –a 97% increase over the number of bills printed in 2011 and three times more than those issued in 2010. (El Universal, 02-25-2013;

Giordani claims outstanding social economic progress
"What we have achieved is an outstanding progress. It is evident in all indicators. The (UN) millennium goals, poverty reduction, Gini coefficience with the best incomes distribution in Latin America. And this has to be preserved," says Sunday Planning and Finance minister Jorge Giordani. (AVN, 02-25-2013;


Amuay Refinery recovery will take a year, fuel imports to continue
According to plant operators and experts recovering Amuay Refinery will take at least one year and it is operating at 52% capacity. Consulting engineer Nelson Hernández says: "11 tanks were damaged and must be built, and this will take at least 6 months if we were to start today. In addition, infrastructure must be prepared and cannot be expected to be ready by September. Everything indicates fuel imports will continue unless rationing is undertaken - such as is being done in electricity and possibly extending the use of chips to control gasoline sales". US Energy Department data shows that after the Amuay accident PDVSA exports to the US dropped around 40%, down to 38,000 barrels per day from 64,000 BPD, and Venezuela that imports an average 108,000 BPD. More in Spanish: (El Nacional, 02-26-2013;; El Universal,

Venezuela, China negotiating contract to boost steel production
Venezuelan aluminum producer CVG and Chinese company Minmetals Engineering are analyzing a contract aimed at to develop two projects to increase production at the SIDOR steel company in southern Bolivar state. SIDOR president Rafael Gil Barrios said the first project is to increase operational capacity and labor safety by recovering lines in the etching area at SIDOR's hot rolled flat product and steel sheet plant. The second plan calls for installing a new continuous casting machine to manufacture 550,000 tons of hot rolled steel billets, used to manufacture seamless pipes required by the oil industry, according to a SIDOR press release. (AVN, 02-25-2013;

State-run basic industries raise prices 46.5%
Whereas private companies are being pressured by Government to avoid increasing prices after devaluation, state-run industries are adjusting prices along the lines of the new FOREX rate. Such is the case of basic industries in Guayana, where prices have been increased by 46.5%. SIDOR adjusted prices upwards, and the price of products purchased prior to devaluation but not dispatched will be recalculated based on the new forex rate, VEB 6.30 per US dollar. (El Universal, 02-25-2013;

Investigation sought into aluminum trading in Guayana
Ricardo Menendez, Vice Minister for Economic Production asked the Interior and Justice Ministry to undertake an intensive investigation "to the ultimate consequences" of aluminum trading at the Guayana basic industries. In a press release he said: "The matter is crucial in order to rescue our basic industries". More in Spanish: (AVN, 02-26-2013;

International Trade

An estimated 27.4% official imports were bogus, says ECOANALITICA
Distortions are increasing ten years after FOREX restrictions were put in place in Venezuela. Official imports at the official exchange rate seemingly encourage overbilling and other types of cheating. Total imports in 2012 were U$D 56.3 billion, of which U$D 15.4 billion (27.4%) were fictitious according to estimates by ECOANALITICA consulting firm. Most of the overbilling was done by government entities. Overbilling means showing a sale price higher than the actual price, this obtaining currency allocation greater than those needed to acquire goods. (El Universal, 02-23-2013;

Venezuela imports over U$D 1 billion in Brazilian beef
Fernando Portela, director of the Venezuela-Brazil Chamber of Commerce, says Venezuela currently imports more Brazilian foods like beef, chicken, roasted coffee and sugar. He says Venezuela and Brazil trade was U$D 6 billion in 2012. "Venezuela imported and exported U$D 5.1 billions, there is an imbalance there, a large asymmetry between the Brazilian export trades," he says, adding that the pattern of imports from Brazil has changed over the past 10 years. "Today Venezuela imports more food from Brazil. 35% are food products and commodities such as live cattle almost reached U$D 400 million." More in Spanish: (El Mundo, 02-25-2013;$1-000-millones-en-carnes.aspx)

Most Colombia trade went through SITME
Venezuela-Colombia trade is reported at U$D 175 million at the start of 2013, with U$D 44 million in exports to Colombia and U$D 131 million in imports from Colombia, according to Luis Alberto Russian, President of the Venezuela-Colombia Integration Chamber. He says these figures do not reflect the impact of devaluation, but adds that according to a recent poll of Chamber members 54% reported using the now abolished SITME parallel system. More in Spanish: (El Universal, 02-26-2013;

Logistics & Transport

Government approved acquisition of machinery and equipment to improve port operations
Elsa Gutierrez, Minister for Aquatic and Air Transport and President of the BOLIPUERTOS port authority has announced that the government approved the acquisition of 100 machines and spare parts needed to improve port activity. She said they would invest one million euros for parts and U$D 39.228 million 228 to purchase machinery and spare parts. Equipment is to be supplied by international companies, such as: Liebher Werk Nenzing, Cargotec and Cargo Solutions INC Equipment. More in Spanish: (Bolipuertos, 02-25-2013;


Despite homecoming, Chavez still out of sight
From a billboard bearing his face, to a giant inflatable doll and posters hawked on the street below, there is no shortage of images of Hugo Chavez at the Caracas military hospital where he has been since returning from Cuba. Yet there has been no sight of the 58-year-old Venezuelan president since he came home - during the night and without photos or fanfare - a week ago. His surprise return to Caracas raised supporters' hopes of a recovery after December surgery in Havana that was his fourth operation in 18 months. But other than the government saying Chavez's breathing problem has worsened, there have been no new details about the patient on the well-guarded ninth floor. (Reuters, 02-25-2013;

Chavez opponents hold demonstration demanding answers about president’s cancer
Hundreds of government opponents demonstrated Saturday to demand answers about President Hugo Chavez’s condition while he remains out of sight in a hospital, undergoing treatment more than 10 weeks after his latest cancer surgery. The protesters also condemned the government’s most recent economic measures, which have included a devaluation of Venezuela’s currency, the bolivar. Some held signs with a photo of Vice President Nicolas Maduro and a slogan saying the devaluation will mean “more inflation.” Opposition leaders, though, mainly criticized the secrecy surrounding Chavez’s diagnosis and treatment, saying many Venezuelans want the government to be more forthcoming about the president’s condition. (The Washington Post, 02-23-2013;; Fox News,

Maduro claims Chavez held 5-hour meeting with Cabinet
According to Vice President Nicolás Maduro, ailing President Hugo Chavez discussed economic policy and national security with his Cabinet for five hours yesterday at a military hospital in Caracas. Maduro went on public television to say Chavez and his team worked on measures to fight inflation and guarantee resources in bolivars and dollars for public spending, economic policy moves to be announced over the coming weeks. “The president was clear about the speculative attack on our currency and product hoarding and said that we have to increase actions to fight the economic war being waged by the bourgeois,” Maduro said. (Bloomberg, 02-23-2013;; El Universal;; Latin American Herald Tribune,

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. 

Friday, February 22, 2013

February 22, 2013

Economics & Finance

Recession feared as Giordani blocks easing exchange controls
Experts at the Central Bank fear a recession starting in this quarter, due to the absence of alternate access to foreign exchange. Around 12% of all imports were processed through SITME, now abolished, and are not being met by the Currency Administration Commission, which is now empowered to approve all FOREX requests. They also say that that even if all requests were approved, the Central Bank does not have sufficient international reserves to meet dollar demand. In the meantime, Finance and Planning Minister Jorge Giordani has not yet approved alternate means for allocating FOREX legally, along with the Foreign Exchange Commission (CADIVI), arguing this would mean further devaluation of the Bolivar. Two options remain under study: dollar auctions through the financial system or through the Public Stock Exchange. More in Spanish: (El Nacional, 02-22-2013;

Reserves down U$D 2.36 billion to date this year
Venezuela's international reserves plunged 8% (U$D 2.36 billion) during the first seven weeks this year, to U$D 27.37 billion on February 19. Reserves are mainly gold, so there is far less cash available for companies to obtain U$ dollars for imports. SINTESIS FINANCIERA reports that Venezuela's liquid or cash reserves are U$D 4.30 billion. Even if authorities thoroughly review FOREX authorizations in an attempt to avoid over-invoicing, available reserves are not enough for an adequate flow of imports or for curbing basic food shortages. (El Universal, 02-21-2013;

Venezuela among nations holding greatest gold reserves in the world, according to data from the World Gold Council, which indicates it is among the 13 countries with the greatest gold inventories in the world. More in Spanish: (El Mundo, 02-22-2013;

Central Bank sends financial aid to state enterprises... which operate at 50% capacity
The Central Bank is not just aiding PDVSA, it is also funding state enterprises to the tune of VEB 16.9 billion through the end of January, and this financial support rises 9% each month. The bank is printing currency to support the enterprises and cover public sector deficits. In the meantime, according to Roberto León Parilli, President of the National Consumers Alliance, state companies processing precooked corn and rice are either paralyzed or at 50% capacity due to lack of raw material and labor difficulties derived from the new Labor Law. More in Spanish: (El Nacional, 02-22-2013; and El Universal,

Minimum wage purchasing power down 10% due to inflation
According to a report by ECONOMETRICA, prices have risen swiftly since October last year and are eating up the base salary's purchasing power. The report shows an 11.2% jump in inflation from October to January, which means purchasing power at minimum wage levels is down 10%, and says the decrease will rise to 16% by April. More in Spanish: (El Universal, 02-22-2013;

Key legislator denies plans to raise VAT tax, or tax bank withdrawals
National Assembly’s Finance and Economic Development Committee Chairman Ricardo Sanguino discards the possibility of raising the Value Added Tax (IVA, in Spanish) or a tax on bank withdrawals. (Veneconomy, 02-20-2013;

Venezuela has the worst business climate in the region
Venezuela's business climate is the worst in Latin America, according to a joint report produced by Brazilian Getulio Vargas Foundation and the University of Munich. In an Economic Climate Indicator for Latin America dated January, Venezuela made only 1.5 points, below the region's average (5.5 points) and way below ratings for Paraguay and Peru, 7 points. Venezuela's indicator is less than it was at third quarter 2012, when it rated 3.4 points. (El Universal, 02-21-2013;


VENALUM paralyzed, declares "force majeure"
CVG VENALUM, the state owned aluminum company has been paralyzed for the past 15 days, receiving no metal, due to labor strife that has closed down the administrative area of this industry. The company has declared "force majeure", admitting their inability to meet supply contracts with their clients; and this has in turn paralyzed private sector processing industries such as PIANMECA and SURAL. Metal dispatches stopped on February 7th. More in Spanish: (El Universal, 02-22-2013;

Debate starts on domestic gasoline prices
Several Cabinet members have called for a public debate on the use and price of gasoline, which remains the same since 1996 and is sold for U$D 0.01 per liter, an amount President Chavez himself termed "ridiculous". At current prices, a cup of coffee is 1,000 times more expensive and a bottled water is 700 times more than a gallon of "premium" 95 octane gasoline. Economists believe the government is preparing to raise gasoline prices in order to reduce the fiscal deficit, estimated at 14-16% of GDP. More in Spanish: (Ultimas Noticias, 02-22-2013;; El Mundo,

PDVAL supplies 61% of national food consumption
PDVAL Vice President for Food Production and Distribution, Heber Aguilar, claims "PDVAL dispatches at least 50,000 tons of food monthly, which is 61% of the basic food basket and serves 17 million people nationwide." More in Spanish: (AVN, 02-22-2013;

Chavez brother slams "irrational" use of energy
Argenis Chavez, president of Venezuela's National Electrical Corporation (CORPOELEC), points to "an irrational use of energy" in the country, which he attributes to increased demand that puts pressure on the National Electric System (SEN). "We waste much energy in the country. We lack an energy saving culture," Chávez said. (El Universal, 02-21-2013;

International Trade

Fuel imports from the US rose in November
Data from the US Energy Information Administration reveals US crude and oil derivate exports to Venezuela rose from 2.588 million to 3.338 million barrels in November 2012. The figure does not include information for December. More in Spanish: (El Mundo, 02-22-2013;


Chavez respiratory infection persists, and tendency is unfavorable
Information Minister Ernesto Villegas announced that President Chavez remains under treatment, saying "the respiratory insufficiency which arose after his operation is persisting and the tendency has not been favorable, so it continues to be treated". More in Spanish: (AVN, 02-22-2013;; El Universal,

Venezuela accuses US of meddling...
Venezuela's government is criticizing the U.S. State Department for comments about a possible transition in the country, calling a spokeswoman's remarks an attempt by Washington to meddle in Venezuela's affairs.  U.S. State Department spokeswoman Victoria Nuland referred to the possibility of a new presidential election in Venezuela when asked on Tuesday about ailing President Hugo Chavez's return from Cuba. Nuland noted that if Chavez should "become permanently unavailable to serve, our understanding is that the Venezuelan Constitution requires that there be an election to seek a new president." Ms. Nuland has replied her statement was misinterpreted, saying she was "spelled out what we understand the Venezuelan Constitution says. That's different from whether the president can serve during his term". (Fox News, 02-20-2013;; AVN;; and more in Spanish: El Universal,

... and yet, Ecuador's Correa says Maduro could run Venezuela if Chavez resigned
Ecuador's President Rafael Correa says Hugo Chavez is recovering from cancer surgery, but if he had to step down Vice President Nicolas Maduro would be "extremely capable" of running the nation. Correa told Reuters he thinks Maduro is the right person to take over in Venezuela if the socialist leader needs to step down. "Regardless of who may take charge, my main concern is that Chavez recovers ... but in case he cannot be in charge, Vice President Maduro is extremely capable," Correa told Reuters in an interview. (Reuters, 02-21-2013;; El Universal, 02-20-2013;

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.

Tuesday, February 19, 2013

February 19, 2013

Economics & Finance

Public Stock Exchange considered as alternate FOREX supply
Unofficial economic sources report the government is considering the use of the Public Stock Exchange as a substitute for the now defunct FOREX Denominated Transaction System (SITME), and say the decision came after the new supreme FOREX authority analyzed the Exchange Authority´s (CADIVI) ability to manage increased demand. Although no decision has been made, an internal memo describes conditions for a new market. Nelson Merentes, Central Bank President has recently admitted that the exchange market is in an altered state and that authorities will not remain inactive in this situation. More in Spanish: (El Nacional, 02-19-2013;  and El Mundo,

Income surplus for 2012 was VEB 57 billion in unused funding, deposited in parallel special funds operated by the National Treasury and now available to the government for further spending plans. The amount is the result of differences between authorized budget items and actual disbursements. More in Spanish: (El Universal, 02-19-2013;

PDVSA accounting benefits from devaluation
José Luis Saboin, senior analyst at ECOANALÍTICA, points out that "all recent economic decisions favor PDVSA"; and César Aristimuño, of Aristimuño Herrera & Associates adds: "one of the key beneficiaries from devaluation is PDVSA as it improves the government's income in local currency, and partly reduces its' local currency indebtedness". PDVSA's indebtedness with the Central Bank is now down 31.7% as a result of devaluation; and it's dollar indebtedness has been reduced from U$D 38.4 billion to U$D 26.2 billion. PDVSA's financial debt is lower by U$D 1.9 billion on Bolivar denominated loans financed by the Central Bank. As a result, PDVSA should provide the government an additional VEB 84.5 in taxes and royalties. More in Spanish: (El Nacional, 02-19-2013;


PDVSA is a big lie, says Gustavo Coronel
According to senior oil analyst Gustavo Coronel: PDVSA claims to be sending to China an average of 34% more oil than the China say they are receiving. Sometimes, like in 2009, the differences have been as high as 72% less oil sent to China than PDVSA claims. This is a lie among the many lies coming out of PDVSA on a daily basis. They lie about their proven reserves, about their level of oil production, about the number of drilling rigs active in the country, about the production of natural gas, about the price they obtain for their oil, about the level of exports, about the refinery runs, about their imports of gasoline and diesel, about their contracts, about their many non-oil related activities such as house building, food imports or pig raising. The company under Rafael Ramirez is an immense lie. As such it has lost all international credibility. PDVSA bonds are no longer accepted by many brokers, due to the shaky financial situation of the company and the nation. (Las Armas del Coronel, 02-13-2013;

International Trade

Soto Rojas denies mining contract with CITIC violates sovereignty
Fernando Soto-Rojas, chairman of the National Assembly's Committee on Energy and Petroleum, defended the contract between the Government and China's CITIC Group granting the latter Venezuela's gold, diamonds, coltan, tin, iron and bauxite deposits. "They have experience in that area. Nowadays, with technology, we can determine the presence of gold thousands of meters deep. Who knows what Guayana has 5000 meters underground? Here in Venezuela we only were able to evaluate 500 meters. " More in Spanish: (El Nacional, 02-18-2013;


Chavez makes surprise return from Cuba
President Hugo Chavez made a surprise return from Cuba on Monday, more than two months after surgery for cancer that has jeopardized his 14-year rule. The middle-of-the-night homecoming by Chavez, 58, implies some medical improvement - at least enough to handle a flight of several hours - and will again fire up supporters with hope he could return to active rule. Yet there was no new information on the socialist leader's condition, nor images of his arrival, and aides say his condition remains "complex." Chavez could be returning to govern behind the scenes or could be hoping to ease political tensions in Venezuela and smooth a transition to Vice President Nicolas Maduro. (Reuters, 02-18-2013;; AVN,; Bloomberg,; Latin American Herald Tribune,; The Washington Post,; CNN,; Fox News,

Opposition leader Capriles welcomes Chávez back in Venezuela
Opposition leader Henrique Capriles welcomed President Hugo Chávez, and said he hoped that Chávez's return brings "common sense" to his government. (El Universal, 02-18-2013;

Students chained to Cuban embassy end protest
Emyly Vera, a spokesperson for the university students who demonstrated near the Cuban Embassy to Caracas for five days, announced the end of the protest after the Government reported the return of President Hugo Chávez.
"We asked for his return. We said that if he was able to rule, he had to do it in his own country and not abroad," she added. Vera pointed out that although the demonstration is over, "the battle is not." (El Universal, 02-18-2013;

US says elections should be called if Chavez cannot rule
Unidentified US government sources are saying "if he (Chavez) cannot carry out the duties of his office, the Constitution calls for the election of a new President". The source, who asked not to be identified, added "we note his return and repeat our best wishes on his illness". More in Spanish: (El Nacional, 02-19-2013;; El Universal,

Government party says swearing in will take place when he is "good and well"
The ruling party is not saying when or where Hugo Chavez will be sworn in as President for the 2013-19 terms. Anzoátegui Governor Aristóbulo Istúriz avoided recent questions on the matter, said the party has not discussed it, and simply said swearing in will take place whenever Chavez is "good and well". More in Spanish: (El Nacional, 02-19-2013;

Venezuela targets better relation with the US, but no rush
Foreign Minister Elías Jaua says Venezuela seeks "good relations" with the United States and ratified that President Hugo Chávez's Government has been taking steps to improve US-Venezuela bilateral relations. However, he stressed that Venezuela is by no means "desperate" to reach said goal. "We look forward to having good relations with the US, but we are by no means desperate to do so. We have learned and demonstrated that it is possible to live with dignity without having a US ambassador in Venezuela," the foreign minister stated. (El Universal, 02-19-2013;

Fidel Castro applauds President Chávez's return to Venezuela
Former Cuban leader Fidel Castro applauded Chávez's come back after more than two months in hospital in Havana, saying: "I am very pleased that you have been able to get back to the piece of land of the Americas that you love so much, and to that fraternal people, who has given you so much support. A long and distressing wait, your amazing physical resilience and the total dedication of the medical team (...) were necessary to obtain such a goal". (El Universal, 02-18-2013;

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.

Friday, February 15, 2013

February 15, 2013

Economics & Finance

Economists say dollar shortage remains key problem
Venezuela devalued its currency on Wednesday amid questions about how the government can get a grip on 22% inflation and satisfy growing demand for dollars to pay for imported goods. Some economists predict that the devaluation won’t solve problems such as a dearth of dollars for imports and shortages of some staple foods. The country’s fifth devaluation in a decade established a new government-set rate of 6.30 bolivars to the dollar, replacing the previous rate of 4.30 bolivars. Venezuela also has a flourishing black market in which bolivars are being traded for more than three times the new official rate. Economist Jose Guerra said he doubts that the Central Bank and government currency agency will be able to meet heavy demand for dollars, especially now that officials have eliminated a state-run bond trading system that had provided dollars at a second-tier rate. (The Washington Post, 02-13-2013;; Fox News,

Black-market Bolivar slides to record
Venezuela’s bolivar plunged to a record low in unregulated trading after last week’s devaluation of the official rate failed to increase the supply of dollars. The currency weakened 10%, according to, a website that tracks the country’s currency in the black market. (Latin American Herald Tribune, 02-13-2013;

IMF praises Venezuela's devaluation, calls for further correction
IMF spokesman Gerry Rice says the institution celebrates "economic policies announced last week as they will help correct macroeconomic imbalances", and added "our perspective is that more can be done, and we exhort authorities to continue doing away with all distortions in the foreign exchange system". He also said "we also hope authorities take more steps to reduce economic vulnerability and improve the business climate, in order to achieve sustained economic growth and employment." More in Spanish: (El Universal, 02-15-2013;

FEDECAMARAS says private international credit is closed
FEDECAMARAS President Jorge Botti says there is U$D 8.8 billion payments pending with foreign suppliers and doubts there will be enough FOREX to meet these obligations at the prior 4.30 exchange rate. He warns that as a consequence private sector credit abroad is cancelled, which hits operations. He says controlled products should be the first to revise prices, and regrets devaluation was not decided along with other policies designed to protect purchasing power. More in Spanish: (Últimas Noticias, 02-15-2013;; El Universal,

FITCH Ratings says devaluation is not enough to dissipate economic uncertainty and calls for "increased coherence and transparency" in economic policies. In a statement the agency says it is not clear how the government will allocate the "unexpected income from devaluation" in light of spending trends that could remain high "due to the growing probability of presidential elections". The agency believes the Venezuelan government will continue to be tempted to issue more debt in order to "meet the excess demand for FOREX", and its "challenge is still how to manage FOREX on an efficient, timely and transparent basis". More in Spanish: (El Mundo, 02-15-2013;

Giordani claims currency exchange administration is working properly
Planning and Finance Minister Jorge Giordani says the foreign exchange administration commission CADIVI is working perfectly normally. "CADIVI workers have been working hard all these days and the system is running smoothly as we had expected," he said in a press conference. (AVN, 02-13-2013;; El Universal,;

Central Bank believes new exchange rate will not bring food price increases
Economist Julio Viloria, of Venezuela´s Central Bank, explains food and medicine prices will not increase because payments pending up to January 15 will stand at 4.30 bolivars per dollar. "Devaluation shall not cause price increases as it is not the only aspect in the cost structure which influences prices," Viloria said. (AVN, 02-13-2013;

Industries call for boost in domestic production
Venezuela's Industrial Confederation (CONINDUSTRIA) says devaluation will not result in higher domestic production per se. "It is important to stress that actions taken in foreign exchange policy will not be enough to boost domestic production. It is vital to guarantee the proper flow of US dollars so that companies can keep up with their operations. This will also ensure consumers' access to goods and services". (El Universal, 02-13-2013;

Fitch affirms Banco Provincial ratings
Provincial's financial profile, as reflected in its Viability Rating (VR), drives the bank's long-term IDR. Provincial's IDRs are at the same level as Fitch's Sovereign ratings for Venezuela (foreign and local currency IDRs 'B+'; Outlook Negative). (Reuters, 02-13-2013;


ROSNEFT to pay Venezuela U$D 1.1 billion bonus, seeks new deals
Venezuela will receive a U$D 1.1 billion bonus payment from Russian oil company ROSNEFT for a joint venture crude oil project in Venezuela, Energy Minister Rafael Ramirez said on Wednesday. The state oil company PDVSA has partnered with ROSNEFT to develop projects in the Orinoco extra-heavy crude belt. Last month, ROSNEFT's powerful chief executive, Igor Sechin, visited Caracas to discuss more investments in Venezuela. Ramirez told reporters ROSNEFT would pay PDVSA a U$D 1.1 billion bonus for its involvement in the PETROVICTORIA project, and would separately provide financing of U$D 1.5 billion. "This is a joint venture that has an important amount of reserves, enough to produce 400,000 barrels per day," he said. (Reuters, 02-13-2013;; Fox Business,

PDVSA announces U$D 25 billion investments in 2013
Oil and Mining Minister Rafael Ramírez has announced that PDVSA will invest around U$D 25 billion during 2013 in developing oil and gas exploration, production and refining. This would be an increase of 13.6% above 2012. He said a large part of the funds will go to expansion of the Orinoco Oil belt through joint ventures; and said they have set a goal of providing gas to the entire electric sector, and are investing over U$D 1.5 billion in gas pipeline networks. More in Spanish: (AVN, 02-15-2013;

Baker Hughes sees U$D 25 million hit from Venezuela devaluation
Baker Hughes Inc believes Venezuela's devaluation of its currency will result in a loss of about U$D 25 million this quarter, according to the oilfield services company's annual report filed on Wednesday. The U$D 25 million represents 9% of the average net income estimate for Baker Hughes in the first quarter, according to Thomson Reuters. (Reuters, 02-13-2013;

Cabello calls for debate on gasoline prices
National Assembly Chairman Diosdado Cabello, who is also first Vice President of the ruling PSUV party, is calling for "a debate" on gasoline prices "in the streets" to see whether the people agree with raising prices. More in Spanish: (El Nacional, 02-15-2013;

International Trade

Giordani expects imports to go down 29%

Planning and Finance Minister Jorge Giordani says FOREX must be assigned to priority areas and estimated the national economic system requires only U$D 40 billion. His thinking is reflected in the decision to tighten up on exchange policies and create the Entity for Optimizing the Exchange System - which joins his Ministry, the Central Bank and the Oil and Mining Ministry - in order to further condition FOREX allocations in line with the "Socialist Plan". More in Spanish. (El Universal, 02-15-2013;

Logistics & Transport

Port operations cost to rise with devaluation

Antonio Landaeta, Chairman of FEDECÁMARAS Carabobo says surface use by grain carriers, which is around U$D 6 per ton will now go up 46%, and says "all port services are collected in dollars, which is the official currency at all maritime terminals in the world. Obviously, port costs will increase significantly with devaluation." He adds this is of great concern because Venezuela imports 70% of all it consumes." More in Spanish: (El Carabobeño, 02-14-2013;


With Chavez away for months, big changes roil Venezuela
What can happen in a country while the president is gone for more than two months? A lot. Just ask Venezuelans. President Hugo Chavez hasn't appeared in public or on national television since he went to Cuba for cancer surgery in December. Allies maintain that he's running his country from Havana, while critics say that the country is in limbo without a leader. Chavez's lengthy absence from Venezuela hasn't stopped his government from making some significant changes. The latest one -- devaluing the country's currency -- starts Wednesday. It's a significant move that stands to affect global businesses and everyday Venezuelans. (CNN, 02-14-2013;

Capriles: Venezuela needs no devaluation, should stop handouts
Opposition governor and former presidential candidate Henrique Capriles Radonski says the government has started to implement a "red package" (new government economic policies), by imposing a 46.5% devaluation.
In his twitter account, Capriles said rather than devalue; the Government should "put an end to handouts to other countries." The opposition leader stressed that during his presidential campaign he explained that there was no need to devaluate the currency. Capriles also said expropriations "finished off" domestic production. He added that some 80% of the products currently consumed in Venezuela are imported.
(El Universal, 02-13-2013;

Washington imposes sanctions on Venezuela's CAVIM for support to Iran
The United States Government on Monday sanctioned Venezuela's Military Industries Company (CAVIM), as well as other 12 foreign companies, including four Chinese firms, for the sale of arms and military technology to Iran, North Korea or Syria. According to the US State Department, the companies violated the Iran Non-Proliferation Act of 2000, to which were added later Syria (2005) and North Korea (2006). The instrument aims to prevent any of these countries from acquiring weapons of mass destruction (WMD). The sanctions will be in effect for a period of two years and will expire in February 2015. (El Universal, 02-12-2013;

VP now says Chavez undergoing "complementary therapy" in fighting spirit
According to Vice President Nicolás Maduro, President Hugo Chavez is undergoing "complementary therapies" which will, gradually, allow him "to close the cycle of his illness". "He is undergoing (the treatment) with fighting spirit." Maduro said. (AVN, 02-14-2013;; El Universal,; Reuters,; Latin American Herald Tribune,

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.