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, June 24, 2014

June 24, 2014

Oil & Energy

As world oil prices rocket on Iraq strife, Venezuela oil price jumps above U$D 100
Venezuela's weekly oil basket rose above U$D 100 a barrel for the first time since the Fall of last year because of continuing crises in Ukraine and Iraq. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending June 20 was U$D 100.29, up U$D 2.18 from the previous week's U$D 98.05. (Latin American Herald Tribune,

PDVSA profit surges as lower spending counters oil slide
Petroleos de Venezuela, S.A.’s annual net income rose more than three-fold as the state-owned oil producer spent less on social programs, reduced costs after currency devaluation and sold assets. Profit rose to U$D 15.8 billion last year from U$D 4.3 billion in 2012, according to a bond offering circular dated May 14, a copy of which was obtained by Bloomberg. So-called comprehensive net income was U$D 12.9 billion, up from U$D 5.1 billion. (Bloomberg,

Oil output down 10.5% in five years
Venezuela's Minister of Petroleum and President of state-run oil company PDVSA, Rafael Ramírez, has said Venezuela has the capacity to boost oil exports to the United States, but his statement is not in line with PDVSA's current capacity. Both PDVSA's production and global exports, particularly to the United States, have dropped over the last five years.
Venezuela's oil production in 2013 hit 2.89 million barrels per day (bpd), a slight decrease of 0.68% versus 2.91 million bpd reported in 2012. Nonetheless, production has been spiraling downward for five years, which translates into an accumulated drop of 10.66% (356,000 bpd).
(El Universal,


U$D 4 billion debt to drug companies creates medicine lack in Venezuela
For Venezuelans with medical needs finding health care, or even a fully-stocked pharmacy, is nearly impossible. According to a new report by Spanish newspaper ABC, Venezuela owes U$D 4 billion to international pharmaceutical corporations, a debt that has left Venezuelans uncertain as to whether they will be able to find life-saving medical items like insulin and antibiotics. The debt has particularly devastated the country because it imports 60% of its drugs; the bad credit makes it nearly impossible for the state to buy more. State figures claim there is a 50% deficit in surgical materials and drugs at a national level. The paper notes that 20,000 patients currently await dialysis treatment, 41,000 AIDS patients are without care, and the lack of sanitary products has exacerbated the spread of disease. Medical treatment in Venezuela has degenerated to a state it has not seen in thirty years, due to unsanitary conditions and a lack of essential items, such as gauze and latex gloves. The situation has led to an extreme surge in the number of amputations at Venezuelan hospitals, as infected wounds cannot rapidly be treated, and the lack of gauze or surgical equipment has forced doctors to make alternative remedies. (Breitbart,

Economy & Finance

Economic reform fades away as government weakens
The Venezuelan government is fully aware of the imbalances it must tackle in a comprehensive adjustment plan, yet President Nicolás Maduro is delaying the implementation of reforms in fear that the political effect will only hasten a drop in his popularity, but will also increase popular perception that he has lost control over the economy. The gravity of the situation has been revealed by former planning minister Jorge Giordani, as the economy shows signs of being on the brink of stagflation. (El Universal,

69% of those polled do not believe the economic model is successful and consequently, that the economy is going well, according to the latest poll carried out by Alfredo Keller and Associates between May 9 and May 24. According to the results, 60% has a negative opinion of Nicolás Maduro’s government and 67% think the country’s situation is negative. (Veneconomy,; El Universal,


Capriles charges that Giordani's letter proves government corruption
Opposition leader Henrique Capriles Radonski has charged the public letter by former Planning Minister Jorge Giordani is evidence of official corruption. Capriles says: "Admitting access to and use of vast resources to secure the reelection (of the then president, Hugo Chávez) in 2012 reflects the serious moral decay of those leading our nation. Some non-governmental organizations have highlighted this in their papers. According to Transparencia Venezuela (Transparency Venezuela), our country ranks second to last in terms of corruption perception, only followed by Haiti." At the same time, Opposition party Un Nuevo Tiempo (UNT) is asking that Jorge Giordani appear before the National Assembly and explain his charges that Nicolás Maduro is not who rules the country and that there other power centers. (El Universal,; and Veneconomy,

HRW denounces at the UN human rights abuses by Venezuela
Human Rights Watch (HRW) has expressed to the United Nations Human Rights Council (UNHRC) its deep concerns over the serious human rights situation in Venezuela, describing it as "the most alarming" the country has experiences in years. The non-governmental organization said that after an anti-government protest held on February 12, 2014, law enforcement officers have hit people brutally, used firearms, pellets, and tear gas disproportionately against unarmed demonstrators. (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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