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, September 30, 2014

September 30, 2014

International Trade

22 ships are at bay in Puerto Cabello

22 ships remain at bay at Puerto Cabello awaiting dock assignment. Eight of them carry 198,000 tons of food, 5 of them consigned to state agency CASA: Two bear yellow rice, one white rice, one sugar and another rice. Other vessels are bringing fertilizers to state agency PEQUIVEN, and 237,000 tons of cement from Cuba for the PDVSA government oil company. More in Spanish: (El Universal;


Imports are a four year low, with a 21% drop, according to the National Statistics Institute. Their report says 58.8% of all imports were carried out by the private sector and the remainder by the government and its agencies. More in Spanish: (El Mundo,


Venezuelan, Russian foreign ministers to strengthen economic, commercial relation

Venezuelan foreign minister Rafael Ramirez met last Saturday in New York with his Russian counterpart, Serguei Lavrov, to discuss agreements by the two nations on economic and commercial matters. They agreed that Ramírez would visit Moscow soon in the coming weeks. (AVN,


Logistics & Transport

Maduro asks Marco to "solve" airline ticket availability issue

President Nicolás Maduro charged Economic Affairs Vice President General Rodolfo Marco Torres with meeting with international carriers and solve the problem with airline ticket availability. "If only one remains, let only one remain ...whoever wants to work with our rules is welcome, but if there is only one left we will have to manage", he said. He accused carriers of taking part in alleged "economic warfare" in order to "isolate Venezuela". More in Spanish: (El Mundo,


Oil & Energy

PDVSA will reactivate some 1,000 oil wells in the west of the country, says its President Eulogio Del Pino, with a project that seeks to boost PDVSA’s production stagnated around 3 million barrels per day (bpd). The undated pilot project aims to increase production between 60,000 and 70,000 bpd. (Veneconomy,


Venezuela oil price falls again to new 3 years low

Venezuela's weekly oil basket fell to a 3 year low this week. 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 September 26 was US$ 86.65, down US$ 1.74 from the previous week's US$ 88.39. (Latin American Herald Tribune,



CLOROX concerned over safety after Venezuelan government’s takeover

The CLOROX Co said it has serious concerns over the safety of its plants, after the Venezuelan government took over its facilities just a week after the company’s announcement of discontinuing operations in the country. Following the news of the cleaning-products maker’s departure, the Venezuelan government announced a takeover of the company’s plants. CLOROX had been manufacturing cleaning liquids, bleach, and other disinfectants at these plants, and is now concerned over the safety of the workers and adjoining communities. The decision to discontinue operations in Venezuela came as a result of the economic crisis that the country is currently facing. The Oakland, California-based company reported that it had been selling two-thirds of its products at prices set by the state. This resulted in losses, as the prices couldn’t even cover the manufacturing costs of the products. (Bidnessetc,


Economy & Finance

Bank of America sees Venezuela with ample funds available for debt service

A recent report by Bank of America repeats that Venezuela is fully capable of meeting upcoming debt service payments. It says cash holding are well above requirements and "provide ample space for maneuvers". It estimated the consolidated public sector has US$ 9.6 billion in consolidated public funds, including US$ 1.9 liquid reserves at the Central Bank, US$ 1.6 billion at FONDEN and US$ 5.1 in PDVSA accounts, among others. It also estimates US$ 30.4 billion in semi-liquid assets that can be quickly converted if authorities decide to. Last amount includes US$ 15.2 billion in gold. More in Spanish: (El Universal,


Venezuela's currency hits record lows on black market

The plummeting Venezuelan currency breached a new, symbolic low of 100 bolívares per dollar on the black market Friday, according to market-tracking websites, in a sign of the worsening greenback shortage faced by President Nicolás Maduro's government. Economists say the bolívar is collapsing as Venezuelans clamor for dollars to protect themselves from an inflation rate topping 60%. But the government, which tightly restricts access to dollars, has cut the supply this year, prompting the value of the bolívar to plunge in unofficial street transactions. Officials this month banned companies with tax arrears from accessing the secondary currency market, pushing them to the informal dealers, according to Tamara Herrera, chief economist at Caracas-based consultancy Sintesis Financiera. The lack of dollars—evidenced by mounting debts with private companies such as airlines and importers that service the country—has sparked fears of a potential default, since the country has more than U$$ 6 billion in bond payments due over the next three months. The bolívar dropped to 100.7 per dollar Friday, according to a website that tracks Venezuela's parallel market, where individuals and businesses go when they are unable to buy hard currency through strict government regulations. That makes 100-bolívar note, the largest bill printed by Venezuela's central bank, the equivalent of $1. A greenback fetched around 40 bolívares on the street a year ago. Polls show President Maduro's popularity has dropped this year, with the country plagued by shortages of basic goods ranging from motor oil to pain medications as dollars for imports go scarce. And despite frequent promises to correct Venezuela's economic woes, analysts say the government has so far failed to deliver meaningful measures. "It doesn't look like the market has much confidence in the government's ability to get things under control," said Russ Dallen, partner at brokerage Caracas Capital Markets. Venezuela's central currency board, known by its abbreviated name Cencoex, offered nearly 30% fewer dollars to the local economy in the first half of this year at its most-subsidized exchange rate, compared with the same period in 2012. The government hasn't published data on its dollar sales for 2013. The central bank's international reserves meanwhile are down 29% to US$ 21 billion since the start of 2013. (The Wall Street Journal,; Bloomberg,


Venezuela faces 27 disputes at ICSID

Venezuela's accounts payable will increase in the event of further rulings against the State in pending arbitration.

Last week, Canadian mining company Gold Reserve Inc. informed that the International Center for Settlement of Investment Disputes (ICSID) had determined Venezuela had to pay the Canadian firm US$ 740.3 million after expropriations in two gold mining projects in the oil producing country.

The award has not been disclosed yet nor has the government released any statement on the issue. Yet this could be just one of the many cases to be defined at the ICSID. (El Universal,



Venezuelans gather signatures against Maduro, Elections Board says process is not legal

Hard-line opponents of President Nicolas Maduro began collecting signatures Saturday seeking to force a constitutional assembly and remove the socialist leader before presidential elections in 2019. Analysts consider the petition campaign launched in Caracas by the Popular Will party led by jailed activist Leopoldo Lopez to be a long shot. Gathering and verifying signatures from 15% of registered voters, or nearly 3 million people, would be a logistical nightmare in any country. But in deeply polarized Venezuela, where loyalists dominate government institutions and the courts, opponents of Maduro fear the National Electoral Council would find a way to invalidate signatures and expose them to retaliation. The current initiative lacks the full support of the Democratic Unity alliance of more than 20 opposition parties, and the Venezuelan National Electoral Council (CNE) will not validate the signature collection process. It says the call, by popular initiative, without the intervention of the Electoral Power “lacks any legality.” (UT San Diego, and Veneconomy,


Insulza: Opposition cannot dialogue if dissenting leaders are in prison

José Miguel Insulza, Secretary General of the Organization of American States (OAS), says dialogue is "pivotal" to solve the crisis in the country, as he referred to government-opposition talks on hold here. However, he added, "the opposition cannot seat at the table (to hold talks) when several of its leaders are in jail. Although they might not want to hold a dialogue, they are still part of the opposition". "Gestures," are required, he said. (El Universal,


UN to assess Venezuela's effort against torture

What steps have been taken to eradicate torture? How many officers have been punished for such a crime? This and some other questions will need to be answered by the Venezuelan authorities next November 6-7 at the United Nations Committee against Torture (CAT), which will assess the actions taken to prevent such violation of human rights.

Authorities intend to point to the Special Law to Prevent and Impose Sanctions for Torture and Other Cruel, Inhuman, and Degrading Treatments passed by the National Assembly on July 2012. (El Universal,


Bloomberg: Chavez friends get rich after his death as Venezuela slides into chaos

In an oil-rich country run by leaders who’ve promised to create a socialist economy that benefits the poor, millions of people struggle every day to find the basics. In this nation blessed with abundant natural resources, it’s the friends of Chavez and his ministers who have accumulated wealth. Some of the beneficiaries of doing business with the government live in mansions and luxury apartments, own horse farms in Florida, travel by private jet and play polo. Chavez -- and later Maduro -- made some of their friends rich with lucrative government contracts, says Henrique Capriles, the governor of the state of Miranda. “There’s nothing more capitalist than a socialist in power,” he says. One area where Chavez’s chosen few wield immense power is in the distribution of food. The state food system has been riddled with deficiencies, lax accounting, loss of documents and lack of auditing and oversight, the Comptroller General of the Republic found in an April report. Venezuela’s flawed food distribution system fails the public, while enriching people with political connections, says Neidy Rosal, a legislator in Carabobo state who has investigated mismanagement in the system for five years. The government has gradually been giving the military a bigger role in the food distribution system, legislator Rosal says. By showering contracts on former military officials and pro-government business executives, Chavez put a new face on the system of patronage here. “Chavez just changed the way the patronage worked, bringing new people into the system,” says Kim Morse, a professor of Venezuelan history at Washburn University in Topeka, Kansas. “The old upper class was replaced by the nouveau riche favored by Chavez.” “These are the scuffles among the insiders for a cut of the business,” Capriles says. “Today, one is useful to them. Tomorrow, he’s persecuted for not giving them the cut they wanted.” (Bloomberg,


New cars for the Army as Venezuelans line up for food

Venezuela’s national parade ground at the Fort Tiuna military base presents a scene that local civilians can only dream of -- stalls laden with goods and no waiting lines. The market with everything from subsidized meat to baby strollers, along with loans, new cars and apartments, are perks provided to the armed forces as the economy contracts, poverty rises and President Nicolas Maduro’s popularity sinks to a record low. The benefits help ensure the loyalty of the military, while siphoning reserves away from the poor who have seen wage growth fall behind inflation, according to analysts, citizen activists and academics. (Bloomberg,


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, September 26, 2014

September 26, 2014

International Trade

New cargo arrivals reported at Puerto Cabello

  • Over 2,434 tons of beef, milk and beans from Centrolac S.A., Eskimo S.A., Albalinisa, Matadero Nuevo Carnic, Industria Comercial San Martín and Matadero Central for Corporación de Abastecimiento y Servicios Agrícolas (CASA)
  • Over 1,000 tons of personal care products (shampoo, conditioner, soap and sanitary towels) from Mexico for Procter & Gamble
  • Also shoes, clothing and auto parts
23 ships remain at bay awaiting dock assignment, 3 of them with white and yellow corn and other wheat, sugar and rice. More in Spanish: (Notitarde;


Logistics & Transport

Flight frequency is down 50% from last year

According to a report by the Venezuelan Airline Association (ALAV) international airlines are providing 50% fewer flights than in 2013 to travelers here to flight reductions and downsized equipment. More in Spanish: (El Mundo,; El Universal,


Oil & Energy

Fuel smuggling costs PDVSA around US$ 3 billion a year

PDVSA President Eulogio del Pino says around 50 to 100,000 barrels per day are smuggled out of the country, at a yearly cost of U$ 3 billion to PDVSA. He said they are investigating whether there are "points" within PDVSA causing such a volume of smuggling. More in Spanish: (PDVSA,


Venezuela suffers another blackout

Another blackout hit various states across Venezuela on Thursday in an irritation for locals and embarrassment for President Nicolas Maduro's government which runs the electricity sector. The nation has been suffering increasing power cuts in recent years which critics jump on as evidence of mismanagement by the socialist authorities. The government has in the past often blamed saboteurs for the cuts, but Electricity Minister Jesse Chacon was quick to attribute the latest blackout to problems at generating plants in the western Andean region of Venezuela. (Reuters,


PDVSA asset sales may shield Venezuela from possible seizures

State-run oil company PDVSA's move to sell units raises questions whether Venezuela wants to reduce international exposure to avoid potential asset grabs in the event companies win arbitration cases against the country. Latin America's leading crude producer is seeking to sell its major U.S refining unit CITGO Petroleum Corp, as well as stakes in the HOVENSA refinery in the U.S. Virgin Islands, the Chalmette refinery in Louisiana, and a network of refineries in Sweden, England and Scotland. The socialist government has shrouded the potential deals in secrecy, leaving analysts and industry players scrambling to piece together a rationale for the surprise divestment. (Reuters,


Paraguaná refining complex operates at 75% of its capacity

The Paraguaná Refining Complex is currently processing 713,000 crude oil barrels per day (bpd), and operates at 75% of its installed capacity, according to an internal document of state-run oil holding PDVSA. The CRP operation rate is higher than that recorded in May, when it processed 590,000 bpd, or 62% of its capacity. The CRP is slowly recovering its regular production levels, after being heavily hit by a serious event in 2012, which caused a plunge in its production. (El Universal,


Economy & Finance

Central Bank adjusts FOREX policy - analysts see implicit devaluation, more inflation

State oil company PDVSA will be allowed to sell dollars for local currency at the most advantageous of the country's three official exchange rates, the Central Bank said on Thursday, a move that could help ease the company's cash-flow problems. PDVSA can now tap the SICAD II rate of around 50 bolivars per dollar when it sells to state development fund FONDEN, removing a previous regulation that gave it access to that rate only when it sold dollars for oilfield investments. That would help liquidity on the SICAD II market, according to economist Asdrubal Oliveros of local consultancy ECOANALITICA. Analysts believe the government has discarded FOREX unification and has decided to make some adjustments that will help it increase income, as well as FOREX supply within the SICAD 2 system. Although the decision could reduce pressure on the FOREX market it implies devaluation and more inflation if the Central Bank decides to place FONDEN funds into SICAD 2. (Reuters,; and more in Spanish: El Mundo,


Venezuela bonds rally as three PDVSA exchange rates permitted

Venezuelan bonds rose to one-week high after the government said it would let state-owned oil company Petroleos de Venezuela, S.A. sell dollars at a more attractive level. The nation’s benchmark dollar bonds due in 2027 increased 0.92 cent to 73.25 cents on the dollar today at 3:04 p.m. in New York, the highest level on a closing basis since Sept. 15. The extra yield investors demand to own Venezuelan bonds over U.S. Treasuries narrowed 0.24 percentage point to 12.87 percentage points, according to JPMorgan Chase & Co indexes.  (Bloomberg,


Hedge funds circling Venezuela as yields top 15%

Hedge funds are stepping in to fill a vacuum in Venezuela’s bonds as deepening concern the nation will default triggers an investor exodus. The debt, which suffered the worst selloff in emerging markets as Standard & Poor’s cut the country’s rating to CCC+ and predicted at least a 50% chance of non-payment in two years, has become increasingly attractive to firms including Greylock Capital Management LLC and Callaway Capital Management LLC. The government notes now yield 15.7% on average, the most in developing nations, while bonds from the state-owned oil producer are also among the cheapest dollar-denominated corporate securities in the world. (Bloomberg,


Government adjusts FOREX rate to VEB 12 per US$ at SICAD 1

The foreign exchange rate of the Ancillary Foreign Currency Administration System (SICAD 1) has been adjusted by the government from VEB 11.70 - 12 per US$. For several weeks the National Foreign Trade Center (CENCOEX) had not made any change to the FOREX rate quoted at VEB 11 per US$. However, in the last three sale auctions the rate has been sliding, which means the Executive Office has been making several moderate adjustments. Some firms estimate that SICAD 1 FOREX rate is likely to hit VEB 15 per US$. Although this would translate into more bolivars to bridge the fiscal gap, analysts believe the move would have little impact. (El Universal,


Venezuela-EXXON arbitration ruling due in days

A World Bank arbitration tribunal could rule in days that Venezuela must pay between US$ 700 million and US$ 1.2 billion to EXXON MOBIL Corp to compensate for a 2007 nationalization. The International Center for Settlement of Investment Disputes (ICSID), which is deciding the case, must issue a final ruling by the end of October to meet a 90-day deadline following the close of proceedings on July 28. The court can also request an extension of 90 days, which would leave the final decision for the end of January. (Reuters,; Veneconomy,


Venezuela opens gold vault for BOFA analyst to count bars

Francisco Rodriguez, a Venezuelan-born economist with Bank of America, was at a routine meeting with Venezuelan central bank officials last week when he sprung an unusual question on them: Can you show me your gold? With the government’s bonds sinking toward prices that indicate investors are bracing for the possibility of default, the country’s US$ 15 billion of gold bars are crucial to ensuring debt payments are met. His first impression once inside the vaults? Those bars don’t take up a lot of room. He said he started counting frantically in his head, summing up figures scrawled out on signs near each pile of the metal. By his quick math, the gold was all there. Gold accounts for about 71% of Venezuela’s US$ 21.4 billion of foreign reserves, according to the World Gold Council. About US$ 13 billion of the gold is held at the central bank in downtown Caracas, with another US$ 2 billion at the Bank of England, according to Rodriguez. Those gold assets have grown in importance as Venezuela’s overall foreign reserves plunged 34% percent in the past five years, the result largely of a drain of its more liquid assets. In a Sept. 23 note to clients, Rodriguez said the “rare” look at the gold was “largely symbolic yet reassuring.” “It’s not that the majority of the people doubt that the gold is there,” he says. “But it’s one of these things that linger, something that’s nagging you and makes you wonder: What if it’s not?  (Bloomberg:


Venezuela to enforce Fair Prices Law with military-civic force, threatens 10-12 prison for hoarding, speculation

Price Superintendent Andrés Eloy Méndez says the government will apply the Fair Price Law - which bans profits above 30% - "with civilian-military force" and "people's inspectors in the streets". He also said: "I have decided 10-12 years prison for whoever hoards or speculates". More in Spanish: (Infolatam; and more in Spanish: El Universal,


Controversial fingerprinting machines rolled out in some Venezuelan stores

The Venezuelan government has started to fingerprint shoppers at some state-run supermarkets, in a plan to combat food scarcity which has been derided by some consumers weary of shortages. Long queues are a ubiquitous sight in shops, while Venezuelans often have to visit several stores to find what they are looking for or settle for substitutes, and friends share tips about where scarce products can be found. (Reuters,



Inter-Parliamentary Union to travel to Venezuela to address "flagrant" HR violations

A delegation of the Inter-Parliamentary Union (IPU) will travel to Venezuela in October to talk with Venezuelan authorities about alleged violation of democratic rights and harassment of dissenting parliamentarians. The President of the Human Rights Committee of the IPU, Chilean senator Juan Pablo Letelier, explained that the arrival of the mission was conditioned by Venezuelan authorities, who have not approved the visit yet. He also said that Human Rights violations in Venezuela were "flagrant". (El Universal,


International Criminal Court in "preliminary examination" of human rights accusations against regime

Bolivian legislator Adrián Oliva says the Prosecutor of the International Criminal Court in The Hague is conducting a "preliminary examination" of reports presented to the Court by over 300 legislators from Latin America and Spain on human rights abuses by the regime of Nicolás Maduro in Venezuela. The Court will determine whether the facts reported come under its jurisdiction. In addition to a report on the events of February here, the accusers are preparing two more reports on "informal armed groups in Venezuela", and "the absence of due process and judicial independence". More in Spanish: (El Universal,


Obama signals Leopoldo López in plea for release of political prisoners, government rep terms it "aggression"

During his speech at the UN’s Clinton Global Initiative, US President Barack Obama asked for the release of all political prisoners globally and specifically mentioned Venezuela’s Leopoldo López. “They deserve to be free. They must be released,” he said. Roy Daza, a pro regime Venezuelan delegate to the Latin American Parliament (PARLATINO) retorted that the request by Obama, is a part of his Administration's aggressions of that Administration against the Venezuelan people. (Veneconomy,; El Universal,; and AVN,


Maduro claims Venezuela has met almost all UN goals for the Millennium, pledges US$ 5 million to fight Ebola

Speaking for the first time at the 69th UN General Assembly, President Nicolás Maduro claimed Venezuela has met almost all of the UN's goals for the Millennium, called for the end to US sanctions on Cuba, for "decolonizing" Puerto Rico, and releasing a jailed Puerto Rican independence activist, supported Argentina's attack on speculative funds, said the UN has permanently betrayed its own principles, and called for reorganizing the institution in order to give emerging nations a larger voice. He also announced that Venezuela would provide US$ 5 million to the funds created to support the fight against the Ebola virus in Africa. (El Universal,; Latin American Herald Tribune,; and more in Spanish: Infolatam)


Maduro pledges support to fuel subsidies for Bronx poor, meets with World Jewish Council

During his stay in New York, President Nicolás Maduro has said he will strengthen support for the Citizens Energy Corporation, headed by Joseph Kennedy II, which provides subsidized fuel for the poor in the Puerto Rican neighborhood of the Bronx. Kennedy said almost a million families have benefitted from subsidies provided by PDVSA through CITGO, for 10 years. He also met with the Presidents of Iran, Colombia and the Dominican Republic; as well as with leaders of the World Jewish Council. (Reuters,; El Universal,;; and more in Spanish: PDVSA,; Noticias Venezuela,; Notitarde,; AVN;ón-ayuda-para-calefacción-más-pobres-eeuu; Agencia Venezolana de Noticias;ás-maduro-se-reunió-congreso-mundial-judío-nueva-york)


Torrealba elected Executive Secretary of the opposition Democratic Unity Conference, seeks renewed dialogue

Jesús "Chuo" Torrealba, a popular educator, journalist and TV personality, who created a group called "Radar of the Barrios", which focuses on the problems of Venezuela's extensive slums, has been unanimously elected Executive Secretary of the Democratic Unity Conference, which includes almost all of Venezuela's opposition. He said the united opposition is interested in renewed talks with the government. (Veneconomy,; Reuters,; El Universal,; Latin American Herald Tribune,; and more in Spanish: El Universal,


Killers of Venezuelan beauty queen Monica Spear jailed

A court in Venezuela has sentenced three men to lengthy jail sentences for the killing of Venezuelan beauty queen Monica Spear in January. The three had pleaded guilty. Spear, 29, and her British partner, Thomas Berry, were shot dead in January in front of their five-year-old daughter during a roadside robbery. Prosecutors said the three men were part of a larger gang which targeted motorists along a highway leading from Valencia to Puerto Cabello. The sentences for the three men range between 24 and 26 years in jail. The murder of the popular beauty queen, who was crowned Miss Venezuela in 2004, prompted demonstrations against the country's high crime rate. (BBC)

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, September 23, 2014

September 23, 2014

International Trade


Colombia hopes for reopening of the border

Colombian Foreign Minister María Ángela Holguín has said that Colombia hopes for the prompt reopening of access on the Venezuelan-Colombian border for the purpose of integration and in light of the relation existing between the people living in both countries. "From the very beginning we said it was a unilateral decision adopted by Venezuela; we have remarked that we do not believe that closing the border would actually bring any benefits..." to fight smuggling Holguín outlined. She noted that restricted border access would be discussed with Venezuelan Foreign Minister Rafael Ramírez during the 69th session of the UN General Assembly in New York. (El Universal,


Government to set up special economic area for Chinese industries

President Nicolás Maduro has signed a US$ 2 billion agreement with China for building housing in Venezuela, and says his government will create a special economic area for setting up Chinese industries that manufacture machinery and construction material. More in Spanish: (Ultimas Noticias,; El Mundo,; Agencia Venezolana de Noticias;



Oil & Energy


New crude game erodes luster of most CITGO refineries

The fast-changing nature of crude oil flows in the Americas means only one of three CITGO refineries in the United States will generate keen interest among buyers as Venezuela's cash-strapped state-run PDVSA looks to sell its U.S. unit, and it may fetch less money than hoped, experts say. CITGO's plant near Chicago is a highly profitable cash cow because it runs cheap heavy crude from the burgeoning fields of Canada; CITGO's two plants on the U.S. Gulf Coast, however, are locked into long-term supply contracts that force them to run expensive Venezuelan crudes, officials have said. "Lemont is kind of the gem in the portfolio," said a refining consultant who asked not to be identified. According to his valuation, Lemont could be sold at a price four times higher than CITGO's other facilities. (Reuters,; Veneconomy,


Lazard costs Venezuela US$ 100,000 per month, according to the agreement -entered into by Lazard's Matthieu Pigasse, Francois Funck-Brentano and Jesús Luongo, on behalf of PDVSA, cited by Venezuelan blogger Alek Boyd. Should it achieve "consummation of a transaction" for an "aggregate consideration up to US$ 7 billion, it will get a 0.5% "transaction fee" and this fee would be 0.75% if "aggregate consideration" exceeds that amount. (Veneconomy,


Gasoline price hike under study at the National Assembly’s Permanent Committee on Energy and Oil, said its chairman (PSUV) Fernando Soto Rojas. (Veneconomy,


Venezuela oil price falls to new 3 year low

Venezuela's weekly oil basket fell to a 3 year low this week. 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 September 19 was US$ 88.39, down US$ 1.80 from the previous week's US$ 90.19. (Latin American Herald Tribune,





CLOROX exits Venezuela after price freeze hobbles operations

CLOROX Co., the consumer-products company that sells everything from bleach to salad dressing, is pulling out of Venezuela after inflation and government-mandated price freezes made the business unprofitable. CLOROX Venezuela will cease operations immediately and try to sell its assets, according to a statement today. (Bloomberg,; Veneconomy,; Reuters,


Venezuelan Association of Corn Processing Industries requested the price of pre-corn flout be increased to Bs.24.8/kilogram. (Veneconomy,



Economy & Finance


Venezuela will make October bond payments, Bank of America Says

Bank of America Corp. said there’s little chance Venezuela will default on US$ 4.5 billion of payments due next month as pressure mounts on the government to adopt policies that would preserve hard currency. The government has no incentive to stop servicing its debt, and state-owned Petroleos de Venezuela SA has more than enough cash on hand to cover next month’s obligations, Bank of America Senior Andean Economist Francisco Rodriguez wrote in a research report to clients. “The idea that a country in which a state-owned corporation exports $85 billion a year could have trouble making a $4.5 billion amortization payment seems stretched,” Rodriguez wrote. “These facts make a default on the October amortizations a near-zero probability event.” (Bloomberg,


Gold Reserve awarded US$740.3 million by ICSID for expropriation by Venezuela

Gold Reserve Inc. has announced that the three-member Tribunal at the World Bank’s International Center for the Settlement of Investment Disputes (“ICSID”) has awarded the Company US$ 740.3 million in accordance with the provisions of the Canada–Venezuela Bilateral Investment Treaty . The Award represents US$ 713 million for the fair market value of the Brisas Project, US$ 22.3 million for interest on the Award since April 2008 based on the US Treasury Bill rate compounded annually and $5 million for reimbursement of legal and technical costs expended by the Company. Payment of the Award is due and payable immediately with any unpaid amounts accruing interest at Libor plus 2% per annum. Gold Reserve has commenced steps to ensure the recognition and collection of the award which is immediately enforceable in any of the 150-plus member states party to the New York Convention. (Market Watch,


Trade council warns of "recession"

The National Council for Trade and Services (CONSECOMERCIO) says Venezuela's economy has been shrinking due to distortions created by the FOREX controls and price regulations, which "leads to the rapid disappearance of medium and small enterprises in all sectors". (El Universal,


Venezuela: Probably the world’s worst-managed economy

A BIG oil producer unable to pay its bills during a protracted oil-price boom is a rare beast. Thanks to colossal economic mismanagement, that is exactly what Venezuela, the world’s tenth-largest oil exporter, has become. At the end of the second quarter Venezuela’s trade-related bills exceeded the US$ 21 billion it currently holds in foreign assets, almost all of which is in gold or is hard to turn into cash. Over US$ 7 billion in repayments on its financial debt come due in October. The government insists it has the means and the will to pay foreign bondholders. Few observers expect it to miss the deadline. Even if it stays current on its financial dues, Venezuela is behind on other bills. Exports of oil and its derivatives, which are dollar-denominated, account for 97% of Venezuela’s foreign earnings. Using an overvalued official rate means that the country is not making as much money as it could: the fiscal deficit reached 17.2% of GDP last year. The government has been bridging that gap in part by printing bolívares. That has caused the money supply almost to quadruple in two years and led to the world’s highest inflation rate, of over 60% a year. Food prices, by the government’s reckoning, have nearly doubled in the past year, hitting the poor, its main constituency, hardest of all. Even worse than inflation is scarcity. The central bank stopped publishing monthly scarcity figures earlier this year, but independent estimates suggest that more than a third of basic goods are missing from the shelves. Six out of every ten medicines are reportedly unavailable. The mess is a reflection not just of import-dependence and a shortage of dollars, but also the mismanagement of domestic industry. Some food producers have been nationalized; price controls often leave manufacturers operating at a loss. Some price rises have recently been authorized, but manufacturers say it is impossible to maintain normal output with such stop-go policies. For its part, the government blames what it calls an “economic war” and the contraband trade. The prospects for a change of course are gloomy.  Venezuela’s streets are calmer now than earlier this year, when clashes between opposition protesters and government forces left more than 40 people dead. Bondholders may well keep getting paid. But the price of the revolution’s survival seems to be the slow death of Venezuela. (The Economist,





Business organizations reject intimidation of business leaders

Jorge Roig, President of FEDECÁMARAS, the nation's largest business organization, says detention and interrogation by Venezuela's secret police of Eduardo Garmendia, President of the National Industrial Council (CONINDUSTRIA) and Rusvel Gutierrez, head of the Customs Agents Chamber, is intimidation. Both business leaders were detained and interrogated for hours with no explanation. Roig said: "We have denounced this to the International Labor Organization (ILO) is clear that all businessmen in this country are subject to constant surveillance and constant intimidation for our opinions." (El Universal,; and more in Spanish: (Notitarde,


US newspapers lambast Venezuela's nomination to the UN Security Council

Two of the most influential newspapers in the United States have questioned Venezuela's nomination to a non-permanent seat at the UN Security Council. The New York Times and The Washington Post object to the the Venezuelan government's record on human rights. (El Universal,


Maduro at UN General Assembly, says US "media mob" is "racist"

President Nicolás Maduro is in New York to attend the UN's 69th General Assembly this week; and criticized The Washington Post and The New York Times, which he called "media mob" after they published editorials opposing his regime's possible entry into the UN Security Council. He called the editorials "racist". (Reuters,; El Universal,; and ,ore in Spanish: Infolatam)


Lopez trial deferred for the 5th time, to 30 September

The trial of opposition leader Leopoldo López has been deferred for the fifth time, to September 30th. His lawyer, Juan Carlos Gutiérrez, says postponement was "due to the serious health situation of student Christian Holdack, who could not be taken to the tribunal". López is being tried along with students Ángel González, Damian Martín, Marco Coello and Holdack. More in Spanish: (Infolatam)



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.