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.

Thursday, October 29, 2015

October 29, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 201,748 tons of paddy rice, yellow corn, bread wheat, barley and plaster for state agency Corporación de Servicios y Abastecimientos Agrícolas (CASA)
  • 44,832 tons of rice, coffee, beans, meat, milk, margarine and chicken for state agency CASA
  • 2,540 tons of ham and other products of the holiday season for state agency CASA
  • 254 tractors from Brasil
  • 34 containers of rice for state agency CASA
  • 83 containers of milk for state agency CASA
  • 44 containers of de margarine for state agency CASA
  • 205 containers of chicken for state agency CASA
  • 205 containers of beef for state agency CASA
More in Spanish: (Bolipuertos,; Agencia Venezolana de Noticias;; El Mundo,


Cargo that has arrived at Bolipuertos La Guaira:

  • 30,000 tons of corn from México


Prices on imports brought into Venezuela using private dollars must be calculated at SIMADI rates

Executive Vice President Jorge Arreaza says that all merchants using their own US$ currency in order to import products "must use the SIMADI dollar as a reference for setting prices. They will never again steal from the people." In view of this, most importers have paralyzed privately funded import operations. More in Spanish:  (Ultimas Noticias,; El Mundo,;



Oil & Energy


Maduro: "We produce oil and speculators price it"

President Nicolás Maduro has referred to oil matters and stressed that unrealistic prices are imposed on oil. He says that once again he will bring forward his proposal of implementing a scale to calculate the price of crude oil to other oil producing countries. He expects international support, and will a visit Saudi Arabia in the context of the Fourth Summit of Heads of State and Government of South America – Arab Countries (ASPA) on November 3-5, to insist on his proposal to recover the price of crude oil. (El Universal,


Venezuela and Trinidad will jointly explore gas deposits in their common border, says Foreign Affairs Minister Delcy Rodríguez on Monday. (Veneconomy,



Economy & Finance


Venezuela is selling off gold reserves, PDVSA makes US$ 1.4 billion bond payment

In a sign of how Venezuela is growing increasingly desperate to acquire hard currency, a report released this week showed the country has been stepping up its sales of gold. The value of the Central Bank’s bullion holdings fell 28% at the end of May from a year earlier, while the spot price for the metal declined just 12%. The figures, while reflecting transactions that took place five months ago, underscore the efforts the government is taking to raise the cash to repay creditors and fund imports. With US$ 3.5 billion of bond payments due this week and next, international reserves are hovering near a 12-year low of US$ 15.2 billion, including gold holdings that totaled US$ 11.8 billion at the end of May. Venezuela had about US$ 42 billion of total assets -- including off-budget funds -- at the end of the third quarter, of which US$ 15 billion was liquid, says Barclays economist Alejandro Arreaza. He said liquid assets will fall to about US$ 8 billion by year end. The country and its state oil company PDVSA have US$ 12 billion in bond payments coming due next year.   The Bolivarian government has met all its international commitments, despite domestic and international attacks,” Finance Minister Rodolfo Marco Torres said Wednesday, after PDVSA paid US$ 1.4 billion of maturing bonds. A US$ 2.05 billion amortization payment on the PDVSA 2017 bond is due at the start of November. General Marco says. PDVSA has made US$ 5 billion in bond payments over the last 15 days. (Bloomberg:; Reuters,; Reuters,


...and again shows doomsayers may be wrong

Over the past year, no shortage of bond investors and analysts have predicted a Venezuela default. Just last week, Loomis Sayles & Co. and Ice Canyon LLC joined the fray, saying the country, rocked by the plunge in oil prices, would likely halt debt payments next year. Yet the cash-strapped nation has managed to stay current on its notes. Bond prices show investors increasingly expect Venezuela’s state-owned oil company to pay US$ 4.3 billion due over the next month and the government to make good on payments of $2.1 billion due in February. After that, the country wouldn’t have another foreign debt payment on principal until August 2016. (Bloomberg,


Proposed 2016 budget is 47.8% lower than that of 2015's - in dollars

The 2016 budget currently being voted on by National Assembly is 47.8% less than total resources budgeted for this year, when estimated at the SIMADI VEB 200/US$ 1 official rate. The 2016 projected budget is for VEB 1.5 billion, which is US$ 7.74 billion at the official SIMADI rate, which applies to all transactions other than imports carried out by the National Foreign Trade Center (CENCOEX). More in Spanish: (El Nacional,


Maduro regime is suing DolarToday

The government of Nicolás Maduro insists on blaming a third party for the disaster caused by its foreign exchange policy. Now the Central Bank of Venezuela is suing DolarToday before a U.S. court. As is known, DolarToday is a financial blog run by Venezuelan residents in the U.S. that publishes a free-market exchange rate based on daily transactions of bolivars and Colombian pesos taking place in Cúcuta, Colombia.
The lawsuit is based on the assumption that the information published by DolarToday on the value of the dollar sold on the parallel market has exacerbated inflation in Venezuela and further devalued the bolívar currency. (Latin American Herald Tribune,



Politics and International Affairs


Ex-prosecutor speaks out on Lopez 'sham trial', regime claims the US is behind his statements

A former Venezuelan prosecutor has accused the government of jailing an opposition leader "because they feared his leadership". Franklin Nieves, who prosecuted Leopoldo Lopez, said in Miami after leaving Venezuela that Lopez was innocent and the evidence against him was false. Nieves is reportedly seeking asylum in the United States. Asked if Lopez should be free, the former prosecutor said: "Yes, indeed, because after examining each and every piece of evidence it was shown that this person had at no point made even a single call to violence." Asked why he had not spoken out before Lopez was sentenced to 13 years and nine months in prison, Nieves said that he had remained silent "out of fear and because of the pressure exerted by each one of our bosses on prosecutors working at the national level". He then explained that the pressure filtered down from President Nicolas Maduro and National Assembly President Captain Diosdado Cabello through the Prosecutor General to individual line managers who got prosecutors to act "on the whims" of the authorities. Nieves went on to allege that he was instructed to arrest Lopez to "take him out of the political game" and that the order came from President Maduro. He also alleged that the case of Lopez was not unique: "There are innumerable cases in which people were investigated and innocent people detained," he said.  Venezuelan Prosecutor General Luisa Ortega dismissed Nieves' allegations, saying that "at the state prosecutors' office we don't pressure anyone". She added that Nieves had given in to "pressures from foreign and domestic elements" although she did not specify what pressures those were. But Minister of Foreign Affairs Delcy Rodríguez referred to statements by Nieves saying: "The way the US blackmails, threatens, and buys off public prosecutors in Latin America to hinder justice and satisfy its interests is vulgar", and rejected remarks by US State Department spokesperson John Kirby who previously said: "If true, these statements highlight the lack of judicial independence and adherence to due process in Venezuela." For his part, the ´government's People's Defender Tarek William Saab said that what Nieves said regarding the López trial "is not on the record, it simply doesn't exist". (BBC News:; Bloomberg,; El Universal,;;; El Nacional,


Maduro and Defense Minister criticize remarks by US Southern Command Chief on Venezuela

President Nicolás Maduro has criticized the recent statements by the Chief of the US Southern Command, John Kelly, about Venezuela's situation. Kelly referred to an alleged "humanitarian crisis" in Venezuela and noted that the US would taken action on Venezuela "only if we are asked to do so" through international bodies. He also voiced concern over factors such as "an inflation rate of 200%." For his part, Maduro labeled Kelly as "a loser," because drug trafficking has grown in the US. Defense Minister Vladimir Padrino expressed "profound indignation", at Kelly's statements that Venezuela is "on the point of implosion", and called them "a new and proof irrefutable proof  imperialist intervention". (El Universal,; and more in Spanish: El Universal,; AVN;; El Nacional,


Former Planning Minister Ricardo Hausmann’s attorneys have filed a complaint at the Prosecutor General’s Office on Monday against National Assembly’s Chief Diosdado Cabello, for the unlawful broadcast of a private conversation, simulation of a crime, incitement to hatred and to collective anxiety and instigation to commit a crime. This, in reaction to the audio broadcast by Cabello in his VTV weekly show. (Veneconomy,


Polar CEO Lorenzo Mendoza says he will not leave the country

Polar Enterprises President Lorenzo Mendoza says he will not leave Venezuela after being denounced to the Prosecutor General by the pro government faction of the National Assembly for "treason, usurping functions and collusion to commit a crime". "I live here with my family, I will always live here with my family, I'm not going anywhere", he said - surrounded by cheering employees and workers - and promised to respond with "more work and commitment" against what he called a "continuous and increasing harassment" by authorities. More in Spanish: . (El Nacional,


Guyana rules out giving Venezuela access to Atlantic waters

Guyanese President David Granger has ruled out giving Venezuela access to the Atlantic as part of any settlement of the border dispute over Essequibo region. “We cannot sell out. We cannot give away. We cannot offer the adversary any corridor or any passage,” Granger said on Tuesday after the successful completion of Exercise Greenheart, a tactical exercise in the Cuyuni-Mazaruni area in Region Seven. The president’s comments came days after former President Bharrat Jagdeo announced that his administration had considered a negotiated settlement to the dispute with Venezuela that would have seen Guyana retain all of Essequibo region in keeping with the 1899 arbitration decision while allowing its western neighbor access to the Atlantic Ocean off Essequibo. (Latin American Herald Tribune,


Maduro plans to meet with Colombia´s Santos

President Nicolás Maduro says he expects to meet with his Colombian counterpart Juan Manuel Santos during the next few days. Maduro reports he had a telephone call with Santos and agreed to a meeting soon, to discuss proposals to create a frontier of peace. "We have proposals ready on military affairs, on fuel, to legalize the entire procedure for buying and selling fuel". More in Spanish: (Ultimas Noticias,



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, October 27, 2015

October 27, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 60.000 tons of yellow corn, 30,000 tons of bulk soy, 30,000 tons of wheat, and 9,999 tons of raw soy oil for state agency Corporación de Servicios y Abastecimientos Agrícolas (CASA)
  • 387 trucks and 353 containers bearing auto parts for the government's transportation program.
More in Spanish: (El Nacional;


Merchants have paralyzed pending imports due to an announcement by President Madura that they cannot use the parallel FOREX rate to establish costs and prices. Caracas Chamber of Commerce Executive Director Victor Maldonado reports that "due to the severe restriction in official FOREX, almost all trade turned to the parallel rate in order to keep afloat, but now no one will import something at a price that cannot be used in establishing cost". More in Spanish: (El Nacional;


Venezuela-Colombia bilateral trade is now down 48% in Q3 2015

The Venezuelan-Colombian Economic Integration Chamber (CAVECOL) reports that trade between Venezuela and Colombia totaled US$ 281 million in the third quarter, versus US$ 544 million in the same period of 2014, for a 48% contraction in trade due to the shutdown of the Venezuela-Colombia border and the state of emergency decree issued by the Venezuelan government on August 19. (El Universal,



Logistics & Transport


Regime is evicting private import service companies from Maiquetía International airport

Officials at the Maiquetía International Airport have delivered an eviction notice to  private companies, such as  PG, SWISSPORT and PPG, which have operated customs and storage facilities there for over 10 years, and could leave over 800 workers without jobs. It is reported the move will begin with PG and continue on to over 10 companies operating on government premises. The National Guard has been called in to dislodge PG workers protesting the decision. More in Spanish: (El Nacional;;



Oil & Energy


U.S. graft inquiries turn to Venezuelan oil industry

A top finance manager for Venezuela’s government-run oil company is suspected of taking millions of dollars in bribes to invest company pension money in an American hedge fund, according to court papers in one case. High-ranking Venezuelan government officials, including some at the oil giant, used shell companies, fake contracts and import scams to camouflage the illicit movement of more than US$ 4 billion through a European bank accused of being a money-laundering haven, according to a Treasury Department investigation. These cases and others like them show how American investigators are increasingly focusing on Venezuelan officials suspected of corruption, including officials at the government-owned oil company PDVSA. The cases have come together as American officials are stepping up investigations into narcotics trafficking that frequently involve government corruption as well. The inquiries have opened a window into what is believed to be widespread corruption at the oil company and elsewhere in Venezuela. Federal officials have not announced any indictments, but the possibility that American prosecutors might file charges against high-level Venezuelan oil officials is causing alarm among American oil companies that do business with the government-run corporation. Francisco J. Monaldi, a fellow in Latin American energy policy at the Baker Institute for Public Policy at Rice University in Houston, says oil executives had been encouraged by the signs that PDVSA was seeking to work more closely with American companies, but he added, “They’re worried that it will totally collapse, by the rumors they hear that a lot of the investigations that are happening around Venezuela have PDVSA in the middle of it.” (The New York Times,


PDVSA's US$8 billion U.S. assets at risk in probe

A U.S. investigation of Venezuela’s national oil producer could jeopardize about US$ 8 billion in crude refineries, storage terminals and pipeline networks. Three U.S. oil refineries owned by Petroleos de Venezuela SA’s CITGO subsidiary have a combined capacity to process 749,000 barrels of oil a day. The company’s largest asset is its 425,000-barrel-a-day refinery in Lake Charles, Louisiana, which includes shipping docks and storage terminals. CITGO probably would be valued around US$ 8 billion, said Gurpal Dosanjh, an analyst at Bloomberg Intelligence. Most of that value -- about US$ 6 billion -- rests in the company’s pipeline and storage network, and the remaining US$ 2 billion represents the trio of refineries, he said. Citgo valued its assets at US$ 8.1 billion in a July 2014 bond offering. (Bloomberg,


Algeria backs Venezuela on OPEC, Non-OPEC Summit to boost prices

Algeria supports Venezuela’s call for a summit among heads of state from OPEC and other oil-exporting nations in a bid to lift crude prices, Algerian Foreign Minister Ramtane Lamamra said: “We would only convene a summit if its success is guaranteed; meetings at the level of ministers and experts will therefore precede such an event.” Venezuela has proposed that heads of state from the Organization of Petroleum Exporting Countries and other oil producers meet in November to discuss the price needed to sustain investments in future supplies, the country’s Oil Minister Eulogio del Pino said on Oct. 21. Speaking in Vienna during a meeting of experts from OPEC and from outside the group, del Pino said Venezuela seeks to set an “equilibrium price” of about US$ 88 a barrel. (Bloomberg,





Maduro regime devises new controls for distribution of goods

The stage of setting the maximum price of public sales of goods in addition to exerting strict control of some services, such as health care, has arrived. After the recent measures intended to reform the Law on Fair Prices, the government has been working on control of distribution. Executive Vice-President Jorge Arreaza has made a presentation on the severity of sanctions, further control of the estimation of fair prices, ban on including costs arising from the so-called parallel dollar, and some other variables subject to analysis. (El Universal,


Oliveros: New measures may worsen inflation and shortages

Venezuelan economist Luis Oliveros says the government "is not carrying out necessary adjustments to solve shortages of goods; therefore, there will be no goods available (...) and it will be impossible to make them available in stores." Oliveros says the announcement by President Nicolás Maduro establishing two pricing categories: maximum retail price and fair price, "is an invention that not even the government understands." "More inflation and more shortages await us...President Nicolás Maduro did not announce economic measures, he decreed further radicalization of price controls," which will result in "higher shortages of products in December this year and early in 2016." (El Universal,



Economy & Finance


Venezuela sues black market currency website in United States

Venezuela's Central Bank has filed a lawsuit with allegations of "cyber-terrorism" against a U.S.-based website that tracks the OPEC member's currency black market. The DolarToday site has enraged President Nicolas Maduro's government by publishing a rate in Venezuelan bolivars for the greenback far higher than the three official levels under Venezuela's 12-year-long currency controls. The rate has become an unofficial marker in the crisis-ridden economy, with some Venezuelans using it in private transactions or to fix prices of imported goods. The lawsuit, in the U.S. District Court for the District of Delaware, named three Venezuelans in the United States as being behind the site: Gustavo Diaz, Ivan Lozada and Jose Altuve. (Reuters,; Bloomberg,


Economists warn inflation may hit 300%

There have been no official inflation numbers in Venezuela for the past nine months, but Tamara Herrera, the director of SÍNTESIS FINANCIERA says October inflation was easily above 200% and will be close to 300%  if problems are not faced at their roots. She says we will enter the club of nations with a government that is more scared of the truth being known than of the truth itself, and this is why they are trying to hide it and not solve it. She foresees devaluation in 2016 and continued use of multiple rates and FORE rationing, to the point where parallel rate devaluation will be uncontrolled. More in Spanish: (Notitarde;; El Nacional,


Central Bank has drained liquidity for US$ 42.6 billion

As part of its monetary policy, the Central Bank of Venezuela (BCV) has placed securities in a combined manner in the market for USD 42.6 billion in order to drain the excess of liquidity. The information was posted on the BCV website. The astringent monetary policy implemented by the BCV is intended to curb the excess of liquidity which, if not absorbed by the system, may exert undesirable pressure. In the last 12 months, monetary liquidity in public hands has doubled, accounting for a variation of 100.31%. Thus far this year, means of payment have risen by 57.01%. This implies that liquidity has gone beyond the capacity of the economy to use these funds in productive activities. Therefore, the BCV must take steps to counteract the excess of liquidity in the system. (El Universal,



Politics and International Affairs


BOFA: Venezuela: Winner takes all

A recent report from Bank of America-Merrill Lynch indicates that a simple majority of Venezuela’s legislative branch has "the capacity to approve laws, decree amnesties, ratify treaties, and override presidential vetoes. Yet these powers pale in comparison to those of larger supermajorities. A three-fifths majority of the National Assembly can revoke presidential decree powers and remove government ministers. Most importantly, a two thirds majority can call elections for a constituent assembly, which has the power to dissolve other branches of government – including the executive – and replace them with temporary appointees. Venezuela’s electoral system also disproportionately benefits the winner of the national popular vote. This is because 72% of deputies are elected through district level majority voting. We have estimated that the opposition would need to win the popular vote by a margin of at least 18.1% to capture a two-thirds supermajority. Most current polls put the opposition’s lead well above that threshold. Were the opposition to eventually reach power, one could visualize a new administration taking advantage of exiting winner-takes-all institutions to push through market reforms. This ability would offset the residual power of current appointees to the judiciary and accountability branches and thus reduce the risks of economic reforms being sidetracked. We think such a scenario would likely be well received by markets." (BOA full report: Attached.)


Colombia's Santos wants Jobim as the chief of Unasur electoral observation mission

Colombian President Juan Manuel Santos has asked the Venezuelan government to promptly approve Brazilian Nelson Jobim as the chief of the UNASUR mission for the parliament vote in Venezuela next December 6. Santos asked "respectfully the Venezuelan government to authorize as soon as possible the suggested chief of mission. The Supreme Tribunal of Justice (TSE) of Brazil had announced that it would not take part in the mission because of Venezuela's unresponsiveness on the assurances for "an objective and impartial observation" and due to a presumed veto on the Brazilian jurist. UNASUR later refuted statements by Brazil's Tribunal, using Twitter messages denying that Jobim had been vetoed. It also said elections "will allow Venezuelans to resolve differences without violence from polarization or media insults". (El Universal,; and more in Spanish: INFOLATAM,


New demands for the National Elections Board to reform observer rules

Brazil's refusal to join the group of UNASUR "escorts" at the upcoming legislative elections has revived the debate here. The Catholic University's Political Studies Center has issued a statement saying the procedure used by the National Elections Board (CNE) for election observers is inadequate and asks for it to rectify. Center Director Benigno Alarcon says: "Unfortunately, less than two months prior to the election, the CNE has chosen to disregard international standards for election observers and is using the term "escorts" as a political devise to legitimize its actions, and this damages transparency and credibility in elections proceedings". More in Spanish: (El Nacional;


Regime invites Uruguayan allied party as viewer of D-6 vote

Venezuela´s former Minister of Foreign Affairs Elías Jaua has asked the Uruguayan political FRENTE AMPLIO party to join UNASUR as a viewer of the parliament vote next December 6. Jaua is reported to have traveled as an "emissary" of President Nicolás Maduro, and met with former President José "Pepe" Mujica and the Executive Secretary of FRENTE AMPLIO. Jaua is said to have promised that the ballots "will be held in compliance with legal and constitutional rules." (El Universal,


Venezuelan prosecutor says falsehoods used to convict Leopoldo Lopez

Franklin Nieves, one of the Venezuelan prosecutors in the trial that sent Leopoldo Lopez to jail says he fled the country because the Venezuelan government had pressured him into bringing “false” accusations against the opposition leader.
I decided to leave Venezuela with my family because of the pressure applied by the executive branch and my hierarchical superiors to make me continue defending the false evidence used to convict Leopoldo Lopez,” the prosecutor said. (Latin American Herald Tribune,


...and Prosecutor General sacks prosecutor after trial criticism

Prosecutor General Luisa Ortega says she has sacked the prosecutor who criticized the conviction and imprisonment of opposition leader Leopoldo Lopez. She said Franklin Nieves, who fled the country, had abandoned his post, and also denied that officials had been pressured to provide false evidence at Lopez's trial. "At the state prosecutors' office we don't pressure anyone," she said, adding that Nieves had given in to "pressures from foreign and domestic elements", but was not specific. Prosecutor Ortega also rejected that the allegations by Nieves were grounds for overturning the verdict in Lopez's trial. Lopez's wife, Lilian Tintori, repeated her call for his release on Monday. "It is clear that the case was manipulated, a complete farce," she says. (BBC News,; Reuters,; Veneconomy,; El Universal,


Venezuela has the highest number of political prisoners in the continent, surpassing even Cuba, claimed NGO Foro Penal Venezolano’s CEO Alfredo Romero. He said "Regretfully, Venezuela is world leader in political persecution and justice manipulation. This stands out even more clearly with statements such as those of prosecutor Nieves in Leopoldo López’ case.” (Veneconomy,


Venezuela to run for re-election to the United Nations HR Council

Foreign Affairs Minister Delcy Rodríguez has confirmed that Venezuela will be a candidate to serve another term on the United Nations (UN) Human Rights Council for the 2016-2018 terms. It will compete against Ecuador, Panama, and Bahamas for one of the three seats in representation of Latin America and the Caribbean at the UN Human Rights Council for three years. (El Universal,


FM meets with UN representative to address Essequibo dispute

Foreign Affairs Minister Delcy Rodríguez met last week in New York with Susana Malcorra, the Chef de Cabinet to the United Nations Secretary General Ban Ki-moon, to revise the work conducted by the UN Technical Committee on the Essequibo border controversy. Malcorra, who heads the UN committee, had initially met with Guyanese President David Granger and then with Venezuelan President Nicolás Maduro on October 14. (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.

Thursday, October 22, 2015

October 22, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 1,785 tons of milk, 714 ton of black beans, and 170 tons of medication for state agencies CASA and FONDAS.
  • 387 heavy duty trucks from China for state agency CORPOVEX
  • 253 vans with automobile parts from Panama for state agencies Corporación Automotriz ZGT C.A. and EMSOVEN
More in Spanish: (Notitarde;; El Mundo,; Bolipuertos,;;; Ultimas Noticias,;;


Regime to set 20% cap on profits from imports

Venezuela's Executive Vice President Jorge Arreaza has announced that among the proposed changes to the Fair Prices Law the regime intends to establish that profit by importers must be lower than domestic production and will he set at no more than 20%. More in Spanish: (Ultimas Noticias,; Agencia Venezolana de Noticias;;; El Mundo,; El Nacional;


ECLAC forecasts 41% shrinkage in Venezuelan exports

The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that the value of Latin American and Caribbean exports will contract 14% due the drop in commodities prices and lower international demand for the region's products. In addition, regional exports may fall again in 2016, according to the United Nations organization. (El Universal,



Oil & Energy


U.S. investigates Venezuelan oil giant PDVSA

U.S. authorities have launched a series of wide-ranging investigations into whether Venezuela’s leaders used PDVSA to loot billions of dollars from the country through kickbacks and other schemes, say people familiar with the matter. The probes, carried out by federal law enforcement in multiple jurisdictions around the U.S., are also attempting to determine whether PDVSA and its foreign bank accounts were used for other illegal purposes, including black-market currency schemes and laundering drug money, these people say. No charges have been made public in the PDVSA matter and it is possible none will be filed. Earlier this month federal prosecutors from New York, Washington, Missouri and Texas met in Washington to coordinate actions and share evidence and witnesses in the various PDVSA-related probes, say three people familiar with the matter. The meeting also included agents from the Department of Homeland Security, the Drug Enforcement Administration, the Federal Bureau of Investigation and other agencies, these people say. Spanish authorities are now investigating former PDVSA President Rafael Ramírez, who is Venezuela's current Ambassador to the UN, his cousin and alleged front man Diego Salazar and others who did business with PDVSA for possible money laundering, say knowledgeable people; and in New York, law-enforcement officials are speaking to about a half-dozen former top officials, according to people familiar with the investigation, and hope to enlist Ramírez’s cooperation. Ramírez has been on the outs with his old comrades in Venezuela, having been ousted as president of PDVSA and as energy minister last year. (The Wall Street Journal,


Despite Venezuela's proposal, OPEC did not discuss output cuts with other oil-producing nations

A meeting between officials from OPEC and oil producers outside the group including Russia did not discuss restrictions on crude output or setting a target range for prices, said a Russian official that attended the gathering. Russia is likely to meet again with the Organization of Petroleum Exporting Countries in December, Ilya Galkin, the Russian Energy Ministry’s head of international relations, told reporters after the technical talks in Vienna. Venezuela has proposed a summit between heads of state from OPEC and other oil-producing nations in November to discuss the price needed to sustain future supplies, the country’s oil minister Eulogio del Pino said. The “equilibrium price” suggested by Venezuela would be a “moving target” that would vary with time according to investments required to sustain production, Del Pino said. The purpose of the OPEC-non-OPEC summit will be to create “a committee that would define what is the equilibrium price,” he said. The proposal comes after the failure of repeated efforts by OPEC members including Venezuela and Algeria to broker an agreement between the group and other producers to reduce oil supply in order to boost prices. Speaking ahead of the meeting, President Nicolas Maduro called for an average global oil price of US$ 88 a barrel "to maintain investments worldwide". He said that "we are going to present proof, technical elements, at this meeting, that the average price needed to guarantee global investment in the next five to 10 years should be $88". (Bloomberg:; BBC News,; Reuters,; El Universal,;; and more in Spanish: El Universal:





Maduro sets two pricing categories

President Nicolás Maduro reported on two new pricing categories in the domestic economy: maximum retail price and fair price. The president explained that in the first category, earnings on retail sales may not exceed 30%; the second category, set by the National Superintendence for the Defense of Socioeconomic Rights (Sundde), is related to "a special category of protection of the basic basket, health services and fundamental services." Maduro also reported on the establishment of a special command of fair prices. The command will be headed by Executive Vice-President Jorge Arreaza. Other members include Minister of Industries José David Cabello and Vice-President of Food Security and Sovereignty Carlos Osorio. (El Universal,


...and says he will criminalize setting prices at parallel FOREX rates, and will apply severe penalties. More in Spanish:  (Agencia Venezolana de Noticias;; El Mundo,



Economy & Finance


The dire state of Venezuela’s reserves

Caracas Capital’s Russ Dallen notes that the nation’s reserves fell US$ 614 million in one day, and that as of Friday, the country had US$ 15.35 billion in reserves, its lowest level since May of 2003. In all, Venezuela is on the hook for US$ 15.84 billion in various bond payments through the end of 2016. But, says Dallen, with so much of its reserves in gold, the country really only has about US$ 2.26 billion liquid. Moreover, the country includes money that it can borrow from the International Monetary Fund as part of its reserves, which about halves that liquid amount. Not to mention that the country also holds precious stones and metals in its reserves as well, which further knocks down that liquid amount. During a New York visit that Finance Minister Rodolfo Marco Torres made to calm investors he said that “government entities…hold” up to 25% of Venezuela’s debt stock and the nation has also bought back some of its bonds maturing in the next two years. Dallen says the key word is “holds” as in March, the government ordered private banks to transfer all bonds – whether they are held abroad or locally to the Central Bank for custody. Second, that US$ 3 billion in PDVSA 6% of 10/28/2022 lie in the coffers of the Central Bank, as Venezuela has been unable and/or reluctant to sell it into markets. Third, when Marco Torres used “government entities,” he would also be including PDVSA and other pension funds and banks. Fourth, he is unsure of whether Marco Torres is including domestic debt, including massive PDVSA debts to the Central Bank and at what FX rate. His conclusion? “Caveat emptor.” (BARRONS,


Maduro statements knock down value of Venezuelan bonds

Statements on debt management made by President Nicolás Maduro during his weekly broadcast were perceived negatively by international markets. Prices on PDVSA bonds dropped 1-2%, and sovereign debt went down 1.5-2-5% on average. Maduro said: "I will be making announcements on our future policy on financing and debt management for 2016-2018....start getting ready, start thinking, proposals will be accepted". More in Spanish: (El Nacional;


...and Marco Torre again says Venezuela to keep making international debt payments

Venezuela not only has the funds needed to make payments to bond investors due this month and next, but intends to keep making timely payments on its obligations, countered Finance Minister Rodolfo Marco Torres. “The government will continue faithfully honoring national and international debt commitments, demonstrating the solidity and reliability of the Venezuelan state,” he said during his presentation of the 2016 budget and debt bills to the National Assembly. Venezuela has the roughly US$ 3.5 billion ready to make the principal and interest payments due on its Petrobono 2015 this month and the PDVSA 2017 bond next month, Marco Torres, who is also economy vice president, said. Venezuela’s debt composition at year-end 2014 stood at 68% domestic and 32% international, he said, and by year-end 2015, the country will have made US$ 13 billion in debt payments. (Bloomberg,


2016 budget amounts to USD 245 billion; sees 85% inflation this year, 60% next; and projects a 1.2% fiscal deficit

General Rodolfo Marco Torres, Minister of Economy, Finance and Public Banking, has presented a draft budget and the Law on Public Indebtedness, as well as the Annual Operational Plan, to the National Assembly. He indicated that the 2016 draft budget amounts to VEB 1.54 trillion (US$ 245 billion at the official exchange rate of USD 6.3 per dollar). The minister specified that the 2016 budget is based on an average price of the Venezuelan oil basket at US$ 40, lower than that of the current budget, at US$ 60 per barrel. He presented premises - based on a prediction by President Nicolas Maduro - that Venezuela's inflation, already the world's highest, would be 85% in 2015 and 60% next year. The proposal also estimates a 1.2% fiscal deficit for 2016, lower than estimates for 2015 (3%) and 2014 (4.5%). According to data supplied by the Venezuelan regime to the SEC in the US, the 2013 deficit was 16.9%. Independent analysts estimate the real fiscal deficit for 2014 was 20%. (El Universal,; Reuters,; and more in Spanish: (El Mundo,


The reality of Venezuela's insurance industry

On September 15, the Chamber of Insurers of Venezuela (CAV) proposed a reduction in the period of validity of insurance policies for vehicles from three to six months, instead of a full year as traditionally issued.
The proposal, endorsed by 48 affiliated companies, is based on the same ills affecting all the productive sectors in Venezuela: 1) an inflationary spiral projected at 160% for this year and over 200% for 2016, which is reflected in the continued increases in prices of spare parts; (2) massive shortages as a result of the non-domestic production due to the systematic destruction of the private sector over the past 16 years, as much as foreign exchange controls severely restricting imports of spare parts; and (3) an increase in labor costs due to the constraints imposed by the present Labor Law and high inflation. Three scourges that have led nearly all the country's productive activities to a critical situation. (Latin American Herald Tribune,



Politics and International Affairs


Brazil pulls out of UNASUR group of escorts to Venezuelan elections, after mission head vetoed

Brazil's Supreme Elections Tribunal (TSE), which was to have been a part of a group of "escorts" sent by the Union of South American Nations (UNASUR) to upcoming December 6th legislative elections in Venezuela, announced it will not participate due to lack of assurances by Venezuelan election authorities on required guarantees of "objective and impartial observation".  The TSE says it's decision is caused by "delays" by Venezuelan in responding to requested guarantees and also a refusal by Venezuela to allow the group being headed by Brazil's noted jurist Nelson Jobim, a former Defense and Justice Minister and former President of Brazil's Supreme Court. The TSE says the nomination was approved by Brazil's President and had "ample support" within UNASUR, but "was ignored in the final decision over the head of the mission, due to an alleged veto by Venezuelan authorities." More in Spanish: (INFOLATAM,


US asks Venezuela to reconsider election observation in parliament vote

United States representatives at the Organization of American States (OAS) has called on Venezuela to reconsider accepting an electoral observation mission of the continental body for the parliament vote slated for December 6. "It's a shame that Venezuela has rejected the observation mission and we hope they will reconsider," said Interim  Permanent Representative of the United States to the OAS, Michael J. Fitzpatrick, during a meeting of the Permanent Council of the hemispheric organization, based in Washington. (El Universal,


Regime legislators accuse Venezuela businessman, economist of 'treason'

Pro regime legislators have asked state prosecutors to investigate Venezuela's billionaire businessman Lorenzo Mendoza and Harvard economist Ricardo Hausmann for alleged crimes including "treason." National Assembly Speaker Captain Diosdado Cabello last week broadcast on state media a private conversation between the pair in which Hausmann insists Venezuela's crisis-hit economy will need an International Monetary Fund (IMF) intervention to the tune of US$40 billion to US$50 billion. Officials including President Nicolas Maduro have denounced that as proof of conspiracy by capitalist figure heads intent on ending 16 years of socialism here. The government is taking an increasingly intolerant line against foes, including jailing opposition leaders, in the run-up to a December parliamentary election. (Reuters,; El Universal,; Veneconomy,


IMF denies negotiations on financial support program in Venezuela

The International Monetary Fund (IMF) has denied negotiations to provide a financial support program to Venezuela, in response to the Venezuelan government's accusations claiming that the institution was designing a plan of economic adjustment. An IMF spokesperson who requested anonymity told news agency Efe that the IMF's programs are offered only if required by the governments. (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.