November 17, 2015

Oil & Energy

 

Venezuela oil price tumbles to within dollar of 2015 low

Venezuela's weekly oil basket tumbled further below US$ 40 as oil prices around the world declined rapidly after the International Energy Administration revealed historically large amounts of oil in storage. 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 November 13 was US$ 37.23, down US$ 2.67 from the previous week's US$ 39.90. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2400021&CategoryId=10717; El Universal, http://www.eluniversal.com/economia/151113/venezuelan-oil-hits-usd-3723-per-barrel)

 

Maduro says he will meet Putin on oil prices next November 23

President Nicolás Maduro says he will meet with his Russian counterpart, Vladimir Putin, next November 23rd, to continue promoting higher oil prices. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/maduro-se-reunira-con-putin-el-proximo-23-de-novie.aspx#ixzz3reFQ4Onk)

 

US$ 1.31 billion invested to date in Guri hydroelectric plant

Representatives of Venezuela's state-run National Electric Corporation (CORPOELEC) and the Inter-American Development Bank (IDB) are reviewing electricity projects and civil engineering works aimed at streamlining the Simón Bolívar Hydroelectric Plant (Guri dam), located in Guri, southern Bolívar state, which would generate additional 705 megawatts (MW) for the National Grid (SEN). Heberto Montiel, of CORPOELEC, says this project has been in process since last year. The Inter-American Development Bank (IDB) allocated US$ 700 million, the Andean Development Corporation (CAF) provided US$ 380 million, and the Venezuelan government disbursed some US$ 230 million for the project, for a total US$ 1.31 billion. (El Universal, http://www.eluniversal.com/economia/151114/usd-131-billion-invested-in-guri-hydroelectric-plant)

 

 

Commodities

 

Venezuela hopes to collect US$ 413.2 million from gold mining

The Venezuelan government estimates that USD 542.6 million VEF would be collected from mining and basic industries in 2016, accounting for 0.2% of recurrent income and 0.2% of the planned national budget. These resources would be US$ 90.6 million from the iron industry; US$ 31.1 million from the exploitation of other minerals; US$ 420.1 million from gold exploitation-related operations and US$ 794.8 million from mining special sales, as per the 2016 currently under legislative discussion. (El Universal, http://www.eluniversal.com/economia/151114/venezuela-hopes-to-collect-usd-4132-million-from-gold-mining)

 

Agriculture is now less than 5% of GDP

Economist Jesús Casique, director of Capital Market Finance, says agriculture has been shrinking within Venezuela's GDP and is now less than 5%, as a result of exchange and price controls, expropriations and lack of legal and personal security. The Central Bank used to publish the size of agriculture within the GDP, but now includes it into other areas, which makes it difficult to determine its real size. More in Spanish:  (Ultima Hora Digital; http://ultimahoradigital.com/jesus-casique-sector-agricola-no-representa-ni-el-5-del-producto-interno-bruto/)

 

 

Economy & Finance

 

Oil Minister says debt restructuring "seems sensible"

Eulogio del Pino, Venezuela's Oil Minister and President of state oil company PDVSA says restructuring the company's debt "seems sensible in the light of the nation's FOREX cash flow limitations". The Síntesis Financiera analysis group says there will the margin for maneuvering around the foreign payment deficit will by narrower in 2016: "Collected oil exports will be around US$ 40 billion for a second year in a row, and restrictions undertaken in 2014 and 2015 to face the drop in exports have been very strong". PDVSA must pay US$ 8.1 billion in 2016-2017 for bond maturities. More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Aseguran-canje-deuda-luce-sensato_0_739726158.html)

 

Central Bank data blackout deepens country risk perception

Since January last year, Venezuela's Central Bank has failed to make official information available on GDP, balance of payments, inflation, oil production, human development, poverty, pay scales, or scarcity - as it is legally bound to do. As a consequence, the nation's country risk is now similar to Ukraine's and worse than Greece and Argentina. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Ausencia-estadisticas-oficiales-BCV-aumenta_0_737926350.html)

 

Venezuela accuses entrepreneurs of promoting food shortages

The government here has again said that local officials are not the only ones who violate human rights, and told the United Nations that Venezuelan entrepreneurs are promoting the so-called economic war in the country. The accusation was made by Larry Devoe, Executive Secretary of the Venezuelan Human Rights Security Council during the Fourth Annual Forum on Business and Human Rights held in Geneva, Switzerland. Devoe said "(local) enterprises have deliberately hit the distribution and availability of food and personal use products, making people's access to basic goods difficult." (El Universal, http://www.eluniversal.com/nacional-y-politica/151116/venezuela-accuses-entrepreneurs-of-promoting-food-shortage)

 

Venezuela’s International Reserves drop around $702 million a month, according to official figures from the Venezuelan Central Bank (BCV). Financial firm ODH estimates Venezuelan International Reserves will close 2015 at $13.6 billion. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46188&idc=1)

 

 

Politics and International Affairs

 

Venezuela’s regime is in a scared and ugly mood

President Nicolás Maduro admits that a parliamentary election on December 6th “could be the most difficult” test the government has faced since Hugo Chávez came to power following an election in 1998. He repeats that the “revolution” will win "como sea"—“by hook or by crook”:

• The government has gerrymandered voting districts to give more seats to rural areas where the PSUV is strong: six urban states with 52% of the electorate will elect just 64 deputies; the remaining 18 will elect 100.
• Maduro has declared a “state of exception” along the border with Colombia. In those areas, which will elect 19 legislators, campaigning is restricted, which hurts the opposition.
• Seven opposition leaders are banned from being candidates.
• The electoral authority has placed next to the opposition coalition on the electronic ballot a pro-regime splinter party with a similar name and logo. In one state, a candidate from that party has the same name as an opposition leader.
• The government has crippled the opposition media, for example by not renewing broadcasting licenses.
• The government has refused to allow election observers from the Organization of American States (OAS) or the European Union. In an unprecedented 18-page letter to Venezuela’s electoral authority, Luis Almagro, the OAS’s secretary-general, paints a devastating picture of the tilted field on which the opposition must play. Almagro, formerly a politician of Uruguay’s left-wing Broad Front, warns that the opposition lacks “equitable” conditions and that the ruling party abuses the resources of the state.

As the opposition surges in the polls, some analysts in Caracas think that it could win the three-fifths majority in the legislative assembly required to claw back powers from Maduro. The government tacitly recognizes the possibility of defeat: it recently pressured 13 supreme court justices to retire early, so that they can be replaced before the new assembly convenes in January. Maduro talks darkly of “governing with the people” if he loses. This suggests that he would seek to throttle and bypass the assembly. But everything indicates that “the people” are no longer with him. If he blocks peaceful change, he may ensure that frustration leads to violence. (The Economist, http://www.economist.com/news/americas/21678241-venezuelas-regime-scared-and-ugly-mood-hook-or-crook?frsc=dg%7Ca)

 

Former Dominican president to head UNASUR electoral mission in Venezuela

Former Dominican President Leonel Fernández will head the electoral mission of the Union of South American Nations (UNASUR) for the legislative elections to be held on December 6 in Venezuela. A source within the UNASUR General Secretariat said Fernández has been appointed as "special representative" of UNASUR. UNASUR's pro-tempore presidency, held by Uruguay, and Venezuela's National Electoral Council (CNE) signed an agreement to monitor the upcoming parliament election in Venezuela. (El Universal, http://www.eluniversal.com/nacional-y-politica/151116/former-dominican-president-to-head-unasur-electoral-mission-in-venezue)

 

Military controls key states in upcoming elections

National Bolivarian Armed Forces Operational Strategic Command, which carries out "Republic Plan" (supervising and guarding election procedures), will deploy 30,000 troops in areas where a "state of exception" has been decreed by President Nicolás Maduro. It is not known how many of these are members of the militia, according to Rocío San Miguel, director of the Control Ciudadano NGO. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/GNB-control-clave-electoralmente_0_739126189.html)

 

Cabello claims Venezuelan pair held by U.S. for drugs were "kidnapped"
Two relatives of President Nicolas Maduro held in the United States on cocaine smuggling charges were "kidnapped," a senior member of the ruling Socialist Party said on Monday. In the first direct comment on the case from a high-ranking Venezuelan official, National Assembly president and party No. 2 Captain Diosdado Cabello also said it was an attempt by Washington to discredit the country's government right before a vote. "The aim was to hurt the Bolivarian revolution in the midst of an election," he said. (Reuters, http://www.reuters.com/article/2015/11/16/venezuela-usa-crime-idUSL1N13B1TD20151116#yq7mjD6axb5Fc8mS.97)

 

...and the opposition asks the National Assembly and Prosecutor General to investigate

Representatives of the opposition Democratic Unity (MUD) are asking the National Assembly and the Prosecutor General to open an investigation to find our "whether it is or is not true that Efraín Campo Flores and Franqui Francisco Flores De Freitas, "are related to the circle of power, why did they have diplomatic passports, who owns the airplane and who owns the yatch that the DEA has reported are part of a crime ring". Jesús Torrealba, Secretary General of Democratic Unity called it a "matter of national sovereignty" and said it "is a problem that goes beyond elections and could reveal the link between crime and power circles". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/151117/mud-solicitara-a-la-an-y-fiscalia-que-abran-investigacion)

 

FM travels to Paris to support Venezuelans hit by attacks

Foreign Minister Delcy Rodríguez has traveled to Paris to assist and express the local government's solidarity to the victims and relatives of the Venezuelans hit by the attacks occurred in the French capital city. Rodríguez says she was informed about the health situation of Félix Salazar, who was treated at the Pitié Salpetriere Hospital in Paris, and she provided support to the relatives of Sven Silva, who is still missing. (El Universal, http://www.eluniversal.com/nacional-y-politica/151116/venezuelan-fm-travels-to-paris-to-support-venezuelans-hit-by-attacks)

 

 

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.