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, May 23, 2014

May 23, 2014

Oil & Energy

PDVSA will receive U$D 2 billion in 3 additional credit lines from service companies
Petroleos de Venezuela, S.A. (PDVSA) has received new credit lines for a total of U$D 2 billion from SCHLUMBERGER, WEATHERFORD and HALLIBURTON, bringing total outstanding loans to U$D 13 billion since 2012. PDVSA has signed loans for $11 billion with seven oil companies (CNPC, CHEVRON, ENI, GAZPROM, REPSOL, PERENCO and SUELOPETROL) to increase oil production. (Veneconomy,;
Ramírez says agreement with REPSOL and ENI has been reached
Rafael Ramírez, Economic Affairs Vice President and Oil Minister, says an agreement has been reached with Spain's REPSOL and Italy's ENI to exploit condensed oil in the Perla 3X well in Northeast Venezuela. More in Spanish: (El Mundo,

Venezuela plans first shale gas exploration project
Venezuela plans to begin its first shale gas exploration campaign in western Lake Maracaibo in a joint venture with Brazil's state-run PETROBRAS, according to Venezuela's energy minister. The PETROWAYU joint venture is to run the project. According to PDVSA, it has a 60% stake in the company, while PETROBRAS has 36% and U.S.-based Williams has the remaining 4%. The minister did not say when exploration would start, nor how much PDVSA and its partners would likely spend. (Reuters,; AVN,;


Gold miner HIGHBURY files new U$D 633 million suit against Venezuela
Gold and diamond miner HIGHBURY International has filed a new suit against Venezuela before the World Bank’s arbitration forum, the International Center for the Settlement of Investment Disputes (ICSID), seeking U$D 633 million for the loss of its mining concessions Alfa and Delta, near the Caroní River in the mineral rich area of the southeastern Venezuela state of Bolívar.  Venezuela now has 28 cases pending against it – the most of any nation in the world. Other companies with pending ICSID arbitrations against Venezuela include mining and smelting companies ANGLOAMERICAN, Gold Reserve Inc., RUSORO Mining Ltd., CRYSTALLEX International Corporation, and TENARIS SA; food industry companies GRUMA, POLAR, LONGREEF, VESTEY, and OWENS-ILLINOIS Inc.; and oil industry companies Tidewater Inc., Williams Cos. Inc., Koch Industries Inc., ConocoPhillips, and ExxonMobil. (Latin American Herald Tribune,

Economy & Finance

Government spending is 65% higher than 2013
Official data from the Finance Ministry shows the government has disbursed VEB 227.6 billion during the first 4 months of 2014, a 65% increase from the same period in 2013, despite promises that fiscal balance would be restored. Salary and pension increases, as well as greater government spending have caused the increase. More in Spanish: (El Universal,

Pro-government legislator says U$D 20 billion went to phantom companies in 2011-13
Ricardo Sanguino, a pro government legislator who is part of the Presidential Commission to verify FOREX Allocations says a report on irregularities within FOREX allocations from 2011 to 2013 will be presented by mid June. He said preliminary results show some U$D 20 billion went to phantom companies that did not import what they said they would. More in Spanish: (El Universal,; AVN;

Minimum wages up in the region, except for Venezuela
In a joint report, the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) pointed out that the minimum wage in the region recorded a real growth of 2.2% in 2013, except for Venezuela. The report outlined that in Venezuela the minimum wage was undermined by growing inflation, which hit 56.2% in 2013. (El Universal,

Regime prepares road show in NY, London
The government is preparing a road show in New York and London in an attempt to better communication with investment funds holding Venezuelan bonds or likely to buy new securities in the short and medium term. It is hoping to build links with international financial markets at a time when the country faces a serious gap between foreign currency demand and supply. (El Universal,

The economy has worsened in the last 90 days says FEDECÁMARAS Chief Jorge Roig. He explains that despite talks on economic affairs, there is no economic recovery because the same obstacles persist: Price controls, inspections and bureaucracy, labor laws and the FOREX controls. (Veneconomy,


Mediators leave as standoff continues, US Congress seeks sanctions on human rights violators. A South American effort to end a standoff in talks between Venezuela's government and opposition appeared to have stalled, while legislation in the U.S. Congress to punish Venezuelan officials for human rights abuses took a step forward. The foreign ministers of Colombia, Brazil and Ecuador left Caracas after a two-day visit without persuading opponents of President Nicolas Maduro to return to talks aimed at easing the country's political crisis. In a statement, the diplomats urged both sides to reflect on the next steps and decide on the date for another meeting in the near future. Opposition leaders pulled out of month-old talks last week to protest mass arrests at anti-government protests. As a condition for returning to negotiations, they are demanding progress on their proposals, including an amnesty for jailed activists and a non-partisan commission to investigate the 42 deaths tied to anti-government protests that began in February. As a breakdown in the talks looks more likely, a bipartisan effort in Washington to impose targeted sanctions on Venezuela advanced in Congress. By a vote of 16-2, the Senate Foreign Relations Committee approved a bill that would direct the Obama administration to impose a visa ban and freeze the assets of Venezuelan officials who committed human rights abuses during the recent wave of unrest. A similar bill cleared a House committee earlier this month. (The New York Times,

Kerry warns of possible sanctions against Venezuela. Secretary of State John F. Kerry has warned that patience with Venezuela’s government is wearing thin, and raised the possibility of sanctions against the country if the process of political reconciliation does not move forward. “Our hope is that sanctions will not be necessary. Our hope is that we can move in the direction of reconciliation and a political path forward,” Kerry said during a news conference. But Congress is discussing the sanctions, Kerry said, and it is up to Maduro and others to “make the decisions that will make it unnecessary” for sanctions to be imposed. Kerry said that “regrettably there has just been a total failure by the government of Venezuela” to act in good faith. “What is important for the Venezuelan government now is to honor the dialogue process, and to restore the civil liberties of opposition leaders who have been unjustly imprisoned,” he said. Maduro this week described a vote by the Senate Foreign Relations Committee to impose a visa ban on and freeze assets of certain Venezuelan officials as “detestable.” (The Washington Post,; Reuters,; El Universal,; Bloomberg,; Fox News,;

Opposition believes splits within the government stall agreements
Ramón Guillermo Aveledo, Secretary General of the opposition Democratic Unity Conference (MUD) says talks are useful and necessary, but that as long as the government shows no positive action the talks will remain frozen. "There have been no new actions that allow us to change our position, as we would like, and we hope promises turn into facts". The government is reported to be analyzing the release of all detained students and setting up a "plural" Truth Commission, but that internal divisions are holding up decisions. More in Spanish: (El Universal,

Maduro claims: "Talks will continue, with or without the MUD"
President Nicolás Maduro says his regime will continue holding peace talks with or without representatives of the Democratic Unity Conference (MUD), and he will not be "blackmailed by anyone". He did not say whom he would continue talking to. More in Spanish: (El Universal,

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.

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