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.

Saturday, June 13, 2015

June 12 , 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 180 heavy transport units, including 50 trucks and cisterns, from China for government construction projects.
  • 6,400 tons of powdered milk from Colombia for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
  • 209,300 tons of powdered milk from Nestlé Argentina for Nestlé Venezuela
  • 937 tons of frozen beef for CASA
  • Over 818 tons of medicine from FARMACUBA for FUNDACIÓN ORO NEGRO
  • 177 tons of disposable diapers from Procter & Gamble for its subsidiary in Venezuela
More in Spanish: (Notitarde;;; AVN;



Oil & Energy


PDVSA halting Colombia gas imports

State oil company PDVSA said it would not renew a contract to import gas from neighboring Colombia and would instead tap local production to supply its gas-deficient western region. The neighbors in 2007 inaugurated a 140-mile (225-km) natural gas pipeline with capacity to transport 150 million cubic feet per day of natural gas. The plan was for Venezuela to import gas from Colombia for four to seven years and then reverse the flow so that Venezuela would export gas as new projects came online. But PDVSA said in a statement "supply in the past months has been completely irregular, with frequent problems that have even at times turned off supplies altogether."  The current contract is for 50 million cubic feet per day from Colombia's ECOPETROL and oil and natural gas producer CHEVRON, but that supply fell to 20 million in the last month, the company added. PDVSA said it would next month put in service the Cardon IV block, located in the vast Rafael Urdaneta natural gas field in the Gulf of Maracaibo, to meet domestic gas demand. The block was given under license to Spanish oil major REPSOL and Italian oil company ENI. It is slated to reach production of 450 million cubic feet per day this year, PDVSA added. PDVSA said the current gas supply contract between Colombia and Venezuela ends on June 30. (Reuters,


Cuba still gets oil from Venezuela

Cuba is still receiving around 90,000 BPD from Venezuela, along with other products, according to oil expert Jorge Piñón, of Austin University in Texas. More in Spanish: (El Mundo,


US surpassing Saudis in oil output among world’s ‘tectonic’ energy shifts in 2014

An eventful 2014 in the world oil and gas markets was headlined by the US overtaking Saudi Arabia as the world’s biggest oil producer and surpassing Russia as the world’s largest producer of both oil and gas, BP PLC said in its 64th Statistical Review of World Energy released June 10.  The US last year recorded the largest oil output growth in the world at 1.6 million b/d, becoming the first country ever to increase production by at least 1 million b/d for 3 consecutive years. (Oil&Gas Journal,





Venezuela to sell US$ 350 million to transport sector as parts scarcity bites

Venezuela announced it will sell US$ 350 million to the transport sector at a favorable rate of the country's currency system, amid growing frustration over lack of spare parts in the shortages-hit country. "I've ordered the Finance Minister and state currency board CENCOEX to next week auction US$ 350 million at SICAD for the transport sector," President Nicolas Maduro said in a televised broadcast, without providing details. Under the complex three-tiered currency control, the SICAD rate is currently equivalent to roughly 12 bolivars per U.S. dollar, a much more attractive rate than the black market's approximately 416 bolivars. The announcement comes as companies struggle to obtain hard currency to import parts under the 12-year-old currency system, especially as dollar sales are curtailed amid a deep recession. (Reuters,



Economy & Finance


Venezuela draws another US$ 1.5 billion from IMF as reserves continue to plunge

According an unofficial source, Venezuela has called in another US% 1.5 billion from its special drawing rights with the International Monetary Fund (IMF). The previous withdrawal took place two weeks ago, and remaining funds are now approximately US$ 1.3 billion. Analysts believe the move is due to pressing import and debt service needs. Former Central Bank Chief Analyst José Guerra says "When reserves are withdrawn from the IMF something serious is going on. This means liquid reserves are running out. The government then decides to cash in one of its assets to finance expenses. But no country does this, not even Greece". Analyst Anabella Abadi of ODH says: "Last year they moved money from the Chinese Fund into reserves, as well as the gold swap and liquidating the Dominican Republic's debt to PETROCARIBE - but it is money that is spent very quickly".  International reserves are down from US$16.864 billion, a new low since 2003. After the most recent withdrawal from the IMF they could be down to around US$ 15 billion, which means cash available for imports and debt service would be below US$ 1 billion. More in Spanish:  (El Universal,; El Nacional;


Giordani says there is no control over the economy, calls it a "time bomb"

Former Chavez Planning Vice President Jorge Giordani, who held office for 13 years up to a year ago, says there is no economic model in Venezuela today, no "direction" or leadership in an economy that is undergoing a "serious distortion". "There is no direction here, they are playing it by ear", he says, adding "it is a time bomb" due to many reasons, among them "lack of leadership". More in Spanish: (El Universal,



Politics and International Affairs


OAS Secretary General offers to observe Venezuelan legislative elections

OAS Secretary General Luis Almagro has announced that the organization is willing to send technical elections observers to Venezuela, as requested by the opposition umbrella group Unified Democratic Conference (MUD), if the government of Nicolas Maduro accepts. "We will be inflexible concerning respect for human rights and democracy, there will be no double standards," he added. The Executive Secretary of the MUD, Jesús Torrealba, applauded the proposal of the head of the OAS. (El Universal,


Gonzalez termss the situation in Venezuela a "catastrophe", says Maduro is a hindrance to Castro

Former Spanish President Felipe Gonzalez departed Venezuela aboard a Colombian Air Force aircraft sent by President Juan Manuel Santos, after being denied permission to see imprisoned opposition leaders Leopoldo López and Daniel Ceballos. His visit is proving that the dictatorial nature of Venezuelan President Nicolás Maduro, who heaped insults on the Spanish statesman and called in the Colombian Ambassador for an explanation. González said afterwards that Maduro "is the one responsible for the destruction of Venezuela", and thanked him because due to his "clumsiness" he has made his mission have "a great repercussion everywhere". He says he left Caracas "seriously worried and sad" because if it "a country in the process of destruction, and Nicolás Maduro is responsible for the catastrophe in personal safety, the social crisis and in basis freedoms". He adds that Venezuela needs "dialogue and reconciliation", but that "dialogue is not coming because there is no mood dialogue in the government"; and further says that Maduro's performance "is today much more of a hindrance to Raúl Castro than of any help".  (Latin American Herald Tribune,; El Universal,; and more in Spanish: Infolatam:


EU-CELAC Summit declaration includes indirect reference to US sanctions against Venezuela

The countries of the European Union (EU) and the Community of Latin American and Caribbean States (CELAC) reached an agreement to include an indirect mention of the sanctions imposed by the United States on Venezuelan officials in the final declaration of the EU-CELAC Summit, which reads: "unilateral coercive measures that have extraterritorial effects that are contrary to international law". (El Universal,; and more in Spanish: (Infolatam:; El Nacional;


Jailed former mayor ends hunger strike in Venezuela

A former Venezuelan mayor jailed last year for his role in anti-government protests has ended a 20-day hunger strike that supporters said had weakened him and triggered kidney pain. Daniel Ceballos, formerly mayor of the opposition hotbed of San Cristobal in western Venezuela, had stopped eating to demand the release of jailed politicians and that the government set a date for this year's parliamentary elections. Hours afterwards, Venezuelan government ombudsman Tarek William Saab announced that Ceballos was being transferred to a new place of detention in Caracas. Fellow jailed hardline opposition leader Leopoldo Lopez started a partial hunger strike 18 days ago. It was not immediately clear if he too would resume eating. Some moderates in the opposition have criticized the high-profile hunger strikes as distractions from this year's key elections and Venezuela's day-to-day problems, which include shortages of everything from medicines to milk, severe crime rates, and soaring inflation that gobbles up purchasing power. (Reuters:; and more in Spanish: El Universal,; Ultimas Noticias,; El Nacional;


Venezuela threatening energy exploration in Guyana, UN mediation sought

Venezuela has unilaterally extended its maritime boundary with Guyana by presidential decree. The order led Guyana to announce June 8 that it would summon Venezuela's ambassador to Guyana to explain the measure. Venezuela's decision to lay claim to additional Guyanese territory could have the added effect of delaying future energy exploration in Guyanese offshore blocks. While Venezuela's presidential order is only recognized under Venezuelan law, it could complicate Guyanese efforts to attract foreign energy firms to explore and develop the country's offshore resources. By extending the Atlantic Maritime Integral Defense Zone to Guyanese waters, Caracas is now empowered to conduct military operations within that defense zone. Venezuelan military vessels could then, in theory, sail into these disputed waters, and some foreign firms will be dissuaded from further operations in the area, prolonging additional exploration and development of the offshore energy resources claimed by Venezuela. However, the possibility that Venezuela will intervene to reinforce its claim cannot be completely ruled out. With the Venezuelan government facing crucial parliamentary elections later in 2015 amid a deepening economic crisis and the government's crumbling popularity, exerting claims to Guyanese territory could boost the ruling party's approval ratings. Venezuela had demanded that Guyana halt oil exploration being carried out by Exxon Mobil Corp in disputed offshore territory in an escalation of a long-running border dispute. Guyana’s Independent Party has asked its government to declare Venezuela’s Ambassador persona non grata, a diplomatic step towards expulsion; and a group of Guyanese people protested outside the Venezuelan Embassy against Nicolás Maduro’s decree. Guyanese Foreign Minister Carl Greenidge has asked UN Secretary General Ban-Ki-Moon to mediate in the border dispute, a move welcomed by Venezuela. (Stratfor:; (Veneconomy,; El Universal,; (Reuters,; Veneconomy,; and mMore in Spanish: El Universal,; AVN;; Ultimas Noticias,


Mexican President Peña Nieto supports human rights in Venezuela

Mexican President Enrique Peña Nieto came out in favor of "respect for human rights" in Venezuela, Referring to the recent visit by former Spanish President Felipe González to Caracas he said: "Efforts so that in that nation which we respect there should be full respect for the rule of law, for democracy, will always be well regarded." More in Spanish: (El Mundo,



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.

No comments:

Post a Comment