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, July 7, 2015

July 07, 2015

International Trade


Uruguay settles debt to Venezuela with 38% discount

Uruguayan President Tabaré Vázquez has announced that his government and Venezuela have reached an agreement to settle bilateral debts on account of petroleum and food, after delays on the Venezuelan side harmed Uruguayan companies. President Vázquez and his Venezuelan counterpart, Nicolás Maduro, will endorse the bilateral agreements on July 17 in Brasilia, providing for the sale of Uruguayan food products to Venezuela amounting to US$ 300 million through the end of the year. In return, Venezuela has undertaken to immediately settle debts to Uruguayan food companies. (El Universal,


Trade debt negotiation with Panama is moving toward payment with oil and gas

Francisco De Sola, President of the Venezuela-Panama Integration Chamber, reports negotiations are moving forward between Finance Minister General Rodolfo Marco Torres and the Panamanian Embassy in Caracas, to meet the billion dollar debt Venezuelan importers have with exporters in Panama's Free Zone. Panama´s Vice President and Foreign Minister Isabel De Saint Malo had earlier said that Venezuelan importers might pay off their debt to Panamanian exporters with oil and gas sold by the Venezuelan government to Panamá so that it can pay off exporters there. More in Spanish: (El Universal,; Ultimas Noticias,


Trade between Venezuela and Colombia drops 35%

Trade between Venezuela and Colombia during the first five months of the year has declined compared to the same period of 2014. According to the Venezuelan-Colombian Economic Integration Chamber (Cavecol), binational trade in such period was US$ 556 million, compared to US$ 869 million, a 35% contraction.

The binational body noted that total Venezuelan exports to Colombia dropped 50%, from US$ 213 million to US$ 106 million, compared to the first five months of 2014. Imports of Colombian products to Venezuela fell 30% compared to January-May 2014, from US$ 656 million to US$ 460 million. (El Universal,


Oil & Energy


Spain’s REPSOL starts production at giant gas field in Venezuela

Spanish oil major REPSOL has announced the start of production at its first well in the massive Perla gas field off the northwestern coast of Venezuela. The largest offshore gas field in Latin America holds 17 trillion cubic feet in reserves, 18 times Spain’s current annual consumption of the fuel. REPSOL expects initial output of 150 million cubic feet per day, rising to 450 million per day by the end of the year, with all of the gas destined for the Venezuelan domestic market. Production is scheduled to increase to 1.2 billion cubic feet per day in 2020, and to remain at that level for the duration of the contract, which ends in 2036. (Latin American Herald Tribune,


Venezuela oil price slips for 4th week

Venezuela's weekly oil basket price slipped for a fourth week as oil prices slipped in international markets on economic worries in Europe over a possible Greek default, a possible nuclear deal to end sanctions with Iran, in addition to the U.S. market remaining amply supplied. 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 July 3 was US$ 54.78, down US$ 1.37 from the previous week's US$ 56.15. (Latin American Herald Tribune,


The OPEC barrel lost 0.81% this Thursday after two consecutive sessions of gains in which it recovered what it had lost since the end of last week. It went down $0.48/bbl. to an average $58.99/bbl. on Thursday, informed the oil group in Vienna on Friday. (Veneconomy,





Venezuela faces beer drought after Polar brewery closures

Venezuela is facing the prospect of a national beer shortage because of striking workers at two breweries. Unions linked to President Nicolas Maduro have forced the closure over a pay dispute with the brewer Polar. The company makes up to 80% of Venezuela's beer. Half of their breweries are now shut, with others already running at reduced capacity. The striking unions say that pay is at the heart of the dispute. In previous disputes, the government has threatened to nationalize Polar.(BBC News;


Polar mayonnaise plant is also closing

Polar also reported it is suspending 200 employees because its mayonnaise plant lacks soy oil necessary for production. More in Spanish: (Ultimas Noticias,


Economy & Finance


Venezuela reserves fall below US$ 16 billion as bolivar currency tumbles past 500

Venezuela's reserves fell to a new low Monday of US$ 15.87 billion, the lowest the country's Central Bank reserves have been since August of 2003 when oil was US$ 25 a barrel. In addition, it appears that the country has also borrowed US$ 1.5 billion against its gold reserves, as the amount of gold fell that US$ 1.5 billion in March, according to the March Central Bank accounts released last month. Venezuela's reserves are now down $8.387 billion since the beginning of March. At the same time, Venezuela's currency, the bolivar, has tumbled past 500 to a new low of 519 in the black market. "The U.S. dollar is doubling against the bolivar in less than three months now," says Russ Dallen, who heads Caracas Capital Markets, a Venezuela-based investment bank. "On April 12 it took 260 bolivars to buy a dollar. It previously took the dollar 4-and-a-half months to double to 260, as it was 130 on November 25, so the speed of the deterioration in the currency is accelerating. The pace of inflation is also quickening and we clock it at 185% now." (Latin American Herald Tribune,


For a worker to live the way he did in 2014, he would need a 487.6% salary raise, according to ECOANALÍTICA’s CEO and economist Asdrúbal Oliveros. (Veneconomy,


Politics and International Affairs


Maduro backs off border decree, tells National Assembly he will pursue peaceful means with Guyana

President Nicolás Maduro has replaced his controversial decree on maritime borders - protested by both Colombia and Guyana - with a Presidential Commission on Border Affairs, headed by Executive Vice President Jorge Arreaza.  Colombian President Juan Manuel Santos hailed the decision as "proof that diplomacy and dialogue work". Maduro also went before the National Assembly to reaffirm Venezuela's claim on the Essequibo area and called for a revival of the 1966 Geneva Accord, as well as intervention by UN Secretary General Ban Ki Moon. He said he is asking the Foreign Ministry to review relations with Guyana, and will recall the Venezuelan ambassador for consultations. During his speech Maduro charged that Guyanese President Granger "is a hostage of EXXON-MOBIL in order to damage Latin American and Caribbean unity and create a conflict with Venezuela", and said he believes the Pentagon is behind the controversy. More in Spanish: (El Nacional;; AVN;;; El Universal,; El Mundo,


CARICOM supports Guyana, advocates friendly resolution in Venezuela border dispute

The Caribbean Community (CARICOM) has stated it was confident that a peaceful solution to the border dispute between Guyana and Venezuela would be found. "CARICOM stands firmly behind Guyana," Barbados Prime Minister and current chairman of the bloc, Freundel Stuart, asserted in the closing ceremony of the 36th Caricom Summit. However, he said he acknowledged the "good relationship" between Caracas and the Caribbean region. (El Universal,


OAS Secretary General Almagro negotiates a date to visit Venezuela

OAS Secretary General Luis Almagro, is holding talks with the Venezuelan government to schedule the date and the agenda of his upcoming visit to the country. As a result of the visit of the Secretary General of the Organization of American States (OAS) to Venezuela, Maduro's government could agree to have an OAS' observation mission in the parliament vote on December 6. (El Universal,


Pope Francis hopes Venezuela to move forward in "peaceful cohabitation"

As he flew over Venezuelan territory en route to Quito, Ecuador, Pope Francis sent a telegram to President Nicolás Maduro in which he asked the Lord to help the Venezuelan people to make progress each day in solidarity and peaceful cohabitation. (El Universal,


US, Venezuela congratulate each other on independence anniversaries

Secretary of State John Kerry has sent a message extending "best wishes to the people of Venezuela as you celebrate 204 years of independence on July 5."  Venezuela's Foreign Minister Delsy Rodríguez expressed the wish that relations move forward toward "respect and equality", and congratulated the US for admitting "past mistakes against nations submitted to long blockades". (Latin American Herald Tribune,; and more in Spanish: (El Universal,; El Nacional;


NGO's charge aggressive official stance at UN blocked constructive dialogue during evaluations

Rafael Uzcátegui of PROVEA, Carlos Correa of Espacio Público, and Liliana Ortega of COFAVIC, who took part in the recent deliberations of the UN Committees on Economic, Social and Cultural Rights, and on Human Rights as they evaluated Venezuela's performance within international treaties, say the Maduro regime missed a chance for dialogue with institutions ready to assist in the effective implementation of citizen rights. They say a lack of disposition toward dialogue, contradictory data, attempts to evade government responsibility, underestimating evaluating experts, fear of answering questions, cynicism, lack of knowledge and improvisation contributed to this atmosphere. More in Spanish: (El Nacional;


Venezuela’s government is launching a new security plan for the next 90 days, according to Internal Affairs, Justice and Peace Minister General Gustavo González López. The plan includes incorporating services of the sea, airport, immigration and tourist police forces. (Veneconomy,


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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