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, July 3, 2015

July 03, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • Over 616 tons of parts for public transport vehicles from Yutong for Vialidad y Construcciones Sucre S.A.
  • Over 585 tons of anti riot vehicles from Russia for the Venezuelan Armed Forces
  • Over 500 tons of milk from Sancor for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
  • Over 437 tons of herbicides from Sanonda  for state agency Corporación Venezolana de Comercio Exterior (CORPOVEX)
More in Spanish: (Notitarde;; and



Oil & Energy


Venezuela loses bid to recuse arbitrators in CONOCO dispute

A World Bank tribunal has rejected Venezuela's request to recuse two arbitrators in a dispute with U.S. oil firm ConocoPhillips linked to the 2007 nationalization of the company's assets here. The Oil Ministry had asked the International Centre for Settlement of Investment Disputes (ICSID) to remove arbitrators Kenneth Keith and Yves Fortier from the three-person panel for their "marked attitude against the Republic." The ICSID's administrative council rejected the request, describing Venezuela's complaints as "unsubstantiated" and "irrelevant," according to a document posted on its website ( CONOCO is seeking compensation over the 2007 takeover of projects including two multibillion dollar heavy oil operations. ICSID in a partial ruling last year said that move was unlawful. (Reuters,


Caribbean oil agreement to continue

Asdrubal Chavez and Delcy Rodriguez, Venezuela's Oil and Foreign Affairs Ministers, told the 15th PETROCARIBE’s Ministerial Council meeting that the energy supply agreement will continue, regardless of the current instability of oil prices. (Veneconomy,


PETROCARABOBO inaugurated an extra heavy crude oil processing center in the Orinoco oil belt

The PETROCARABOBO joint venture has inaugurated a US$ 107 million Fluid Processing Center with a 30,000 BPD processing capacity for extra heavy crude oil that is extracted in the Orinoco oil belt. More in Spanish: (Noticias 24,


Greece to sign an energy agreement with Venezuela in the next few days. Venezuela’s Mining and Oil Minister Asdrúbal Chávez reports his Greek counterpart Panayotis Lafazanis will visit Caracas to sign a Memorandum of energy cooperation between both nations. (Veneconomy,





Minority pro regime unions shut two Polar breweries as beer shortage looms

Minority unions close to the Venezuelan government say they shut two breweries belonging to the country's largest private company over a wage dispute, setting the stage for a potential shortage in the alcohol-loving nation. A group of workers have walked out of Empresas Polar's plants in Caracas and eastern Anzoategui state, as well as 16 distribution centers, said employees marching in the capital in protest. "They've delayed our collective contract for over 20 months, and the company refuses to recognize our union," said Jose Rojas, spokesman for one of at least two unions that helped shut the plants, before entering the public prosecutor's office in Caracas to submit a complaint. (Reuters,


PDVSA buys 98% of all iron and steel production from basic industries here, according to Hector Rodríguez, a member of the Presidential Commission for the Socialist Guayana Plan. More in Spanish: (Noticias 24,; Entono Inteligente,


Bread inventories running out, bakeries have one week left of wheat flour

A survey of bakeries in Caracas reveals there is a 50-60% drop in bread production due to a lack of wheat flour, and "the most worrisome part is that they have no idea when they will get more". More in Spanish: (El Nacional;



Economy & Finance


Venezuela "default is a real possibility" says FITCH

FITCH Ratings Global credit rating firm has affirmed Venezuela's Long-term foreign and local currency Issuer Default Rating (IDR) at 'CCC'. Fitch has also affirmed the sovereign's Short-term foreign currency IDR at 'C' and the country ceiling at 'CCC'. Fitch defines CCC as "Substantial Credit Risk. Default is a real possibility." The Short-Term rating of C means "Exceptionally high levels of credit risk. Default is imminent or inevitable." (Latin American Herald Tribune,; El Universal,


Venezuela's sovereign bonds riskier than Greece's

Yield on Venezuela's 2025 sovereign bond has risen to 25.84% while a similar Greek government bond is yielding 16.04%, indicating international markets see country risk for Venezuela as worse than Greece's. Investors still believe developed economies within the European Union will rescue Greece. More in Spanish: (El Universal,; El Nacional;


Venezuela and China tweak terms of oil-for-loans agreement, approve development plan road map

Venezuela and China have modified the terms of an oil-for-loans financing agreement, establishing a three-year repayment period for a tranche that previously did not have a payment time frame. The deal allows Venezuela to borrow from China in tranches of up to US$ 5 billion and repay with shipments of crude and fuel. The latest amendment adds a three-year repayment period to Tranche C, the third of three tranches. It was not immediately evident what motivated the change. The Technical Secretariat of the Venezuela-China High Level Joint Committee has approved a road map for pursuing the objectives of the Venezuela-China Joint Development Plan. The road map will be signed in the next Joint Committee, to be headed by Presidents Nicolás Maduro and Xi Jinping sometime during the last four months of the year. (Reuters,; El Universal,



Politics and International Affairs


U.S-Venezuela talks began at Maduro’s request, US official reports

The United States and Venezuela have embarked on their most extensive dialogue in years in an attempt to improve their acrimonious relations, according to a senior U.S. administration official. The official, who has direct knowledge of the high-level talks, cautioned that the process is at an early stage. Maduro made the first move in March by requesting a "direct channel of communication" with U.S. President Barack Obama and the State Department, said the official.  "He realized that if we can talk to the Cubans, we can talk to him," the official told Reuters. The dialogue did not begin in earnest until April, when Obama briefly met with Maduro in Panama at the Summit of the Americas, and has developed into a two-track effort to separate areas of disagreement, such as Venezuela's clamp-down on domestic political opposition, from those of shared interest including peace talks in Colombia and elections in Haiti, the U.S. official said. U.S. officials pressed Venezuela's powerful parliamentary chief Diosdado Cabello during a June 14 meeting in Haiti to set a date for parliamentary elections this year and to release political prisoners, including jailed opposition leader Leopoldo Lopez, the U.S. official said. He added that it was important to engage Cabello because he is seen as a rival for power with Maduro, although the two deny it. "The two most apparent power centers in the Venezuelan government are Maduro and Cabello," the U.S. official said. "We knew we had to connect Cabello and Maduro in some way. Even though they insist they aren't, they are competitors." The challenge ahead, the official said, was to reach agreement on meaningful observation of the December vote. "We figure if we can help Venezuelans construct an election that everybody supports, and if we can help them get a result that everyone recognizes that is a starting point," the official added. (Reuters,


Kerry urges dialogue, cooperation in message to Venezuela

Secretary of State John Kerry has urged Venezuela's government and opposition to find a "peaceful resolution" to their disputes before a Dec. 6 parliamentary election and said the United States wanted to improve ties. In a message to Venezuela to mark the country's independence on July 5, Kerry referred to recent talks between Washington and Caracas, saying he hoped the two countries could find ways to cooperate. "As you look toward legislative elections, political dialogue will be important in ensuring peaceful resolution of disputes and the integrity of your democratic process," Kerry said in his message. (Reuters,; El Universal,


Maduro snubs influential Republican senator

The Republican chairman of the U.S. Senate Foreign Relations Committee made a surprise two day visit to Venezuela amid a U.S. effort to reduce tensions with this nation. Senator Bob Corker of Tennessee unsuccessfully tried to meet with President Nicolás Maduro, who snubbed him in what some call a "very stupid" diplomatic mistake. Sources close to his visit report Maduro - upset that the meeting had been disclosed - made Corker wait several hours and in the end did not meet with him although the meeting had been planned several days in advance. Corker did meet with Captain Diosdado Cabello, President of the National Assembly, and with opposition leader María Corina Machado. Upon his return, the Senator said "Venezuela is heading for very difficult times that will lead to even greater suffering by its people, who deserve a better fate".  It had been expected that the Caracas regime had planned to announce freedom for an undetermined number of political prisoners, including Voluntad Popular leader Leopoldo López.  (Latin American Herald Tribune,; Veneconomy,; El Universal,; Associated Press:; and more in Spanish: El Nuevo Herald,


Guyana seeks CARICOM's support in dispute with Venezuela

Guyana's Minister of Foreign Affairs Carl Greenidge says the border dispute between his country and Venezuela in relation to the waters of the Essequibo concerns the Caribbean Community and asked for CARICOM's support at the summit started on Thursday in Barbados. Greenidge said that the borders defended by Venezuela, "in addition to being illegal under the international law, grant it maritime spaces and other resources that are accepted as part of the exclusive economic zone of each State in the Eastern Caribbean, from Saint Kitts and Nevis to Grenada and Suriname." (El Universal,


Desmond Tutu warns: No more hiding From Venezuela’s abuses

Desmond Tutu, Archbishop emeritus of Cape Town and recipient of the 1984 Nobel Peace Prize says: "Don’t be misled by news about elections—the government violates human rights, emboldened by the international community’s silence". In an op-ed column Tutu adds: "It is encouraging to see the Venezuelan government make motions toward respecting democracy—but a true election cannot be held when more than 75 political prisoners languish in jail. Venezuela must be held accountable for its human-rights abuses...Unfortunately, important voices—namely, Venezuela’s neighbors in Latin America—have remained muted.... Their inaction gives Mr. Maduro license to act with impunity...I urge the Maduro government to allow the Red Cross access to the 100 or so prisoners who joined the hunger strike in solidarity." (The Wall Street Journal,


Felipe González to return to Venezuela before parliament vote

Spain's former President Felipe González has announced that he will return to Venezuela, probably before of the parliament vote in December. "Unless the Vienna Convention declares me persona non grata, I have the right to circulate freely," González remarked after meeting with Lilian Tintori and Mitzy Capriles, the wives of detained dissenters Leopoldo López and Caracas Metropolitan Mayor Antonio Ledezma, respectively. (El Universal,


Vargas Llosa calls "fairness" of upcoming Venezuelan vote into question

Peruvian author Mario Vargas Llosa has called the "fairness" of the parliamentary elections to be held in Venezuela on December 6 into question, and adds that the government of President Nicolás Maduro will do as much as possible to tamper with the election. (El Universal,


Dissident "chavistas" estimate 84.5% abstention in ruling PSUV party primaries

Although regime officials claim 3.162 million turned out for government party PSUV primaries last Sunday, dissent "chavistas" grouped in the Socialist Tide movement say abstention was around 84.5%. Nicmer Evans, a spokesman for the group says: “It is valid to doubt results publicized by the leadership." Carabobo Governor Colonel Francisco Ameliach has called for a pact of all sides of the pro government spectrum towards elections on December 6th. "Voting was not for a single individual, it was for a majority in the National Assembly, so we must now forget differences and concentrate on a great victory".  Threats by President Nicolás Maduro - who said they would know who voted and who did not - were among the reasons for a higher turnout later in the day the voting was carried out. Evans also charges that in some locations PSUV leaders sought the support of local opposition leaders to inflate turnout numbers. More in Spanish: (El Nacional,


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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