International
Trade
Táchira Governor advocates opening up border with
Colombia
Lieutenant José Gregorio Vielma Mora, Governor of
Táchira state on the frontier with Colombia, believes that the border with the
neighboring country can be opened up now that the Oil Minister and PDVSA
President Eulogio del Pino has announced that gas stations along the border
will sell at international prices. “I
believe it is already necessary, since the border should be open during daytime
so that we can trade, as Colombia is our ally. Colombia is our natural market
for high quality goods at a good price”, he said. More in Spanish: (Ultimas
Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/vielma-plantea-abrir-frontera-con-colombia.aspx#ixzz415KVRI1W)
Venezuela expects to earn US$ 7 billion from non-oil
exports this year
Foreign Trade and Investment Minister Jesús Faría says
out that by the end of the year, the government expects to earn a total of US$
7 billion from non-traditional exports. (El Universal, http://www.eluniversal.com/economia/160224/venezuela-expects-to-earn-usd-7-billion-from-non-oil-exports)
Oil & Energy
PDVSA sells stock in
joint ventures to raise capital, part of PETROMONAGAS goes to ROSNEFT
State oil company Petróleos de Venezuela
(PDVSA) has launched a plan to raising financing by selling of its stock in
joint ventures and lowering its stake in these companies, reports PETROGUIA, a
publication specialized in industry affairs. It took the first step by selling
US$ 500-million stock to Russia’s ROSNEFT, which now has raised its stake in
PETROMONAGAS (Anzoátegui state) from 16.67% to 40%, According to an industry
source, PETROMONAGAS will now be free to sell oil directly instead of being
controlled by the Trade and Supply office. The source says negotiations are
underway with CHEVRON for an increase of their stake in PETROPIAR, from 30% to
40%; and for China’s CNOC to increase their stake in SINOVENEZOLANA from 25% to
40%. More in Spanish: http://www.el-nacional.com/economia/Pdvsa-vende-acciones-empresas-mixtas_0_800319966.html)
PDVSA in talks with
banks over debt refinancing
State oil company PDVSA is in talks with
international banks over refinancing the company's debt, its president
announced, as the country grapples with major bond payments amid an oil price
rout. "If the conditions are
favorable, of course we're interested," Eulogio Del Pino said about
potential refinancing, adding the company was talking to international banks.
Del Pino had previously said PDVSA was mulling a proposal to extend payment for
bonds that mature in 2016 and 2017 until 2018 and 2019, when the company has a
lighter load. Venezuela faces some US$ 10 billion in debt payments this year
amid a tumble in oil prices and a brutal recession, leading to speculation of default.
(Reuters, http://www.reuters.com/article/venezuela-pdvsa-bonds-idUSL2N1621MB;
El Universal, http://www.eluniversal.com/economia/160224/venezuelas-pdvsa-in-talks-with-foreign-banks-over-debt-refinancing)
PDVSA says new military
company to provide services
A recently-announced Venezuelan military
company will provide services to state oil company PDVSA, especially in terms
of security in the crime-ridden country, says the company's president. Some
industry observers and opposition leaders had speculated the company, CAMIMPEG,
was a potential mechanism to shield assets from being seized in the event of a
debt default. But PDVSA president and Oil Minister Eulogio Del Pino said the
company is designed to provide services and support in the country with the
world's largest oil reserves. "It
will help PDVSA in all the necessary areas. For instance, in border areas,
we're going to increase our security, in operational issues where our soldiers
are perfectly prepared," Del Pino told reporters. (Reuters, http://www.reuters.com/article/venezuela-pdvsa-military-idUSL2N1622DS)
Commodities
Venezuela, GOLD
RESERVE to settle arbitration dispute with joint venture
Venezuela and Canadian mining company GOLD
RESERVE have signed a memorandum of understanding to settle a protracted
arbitration dispute over a gold concession through creation of a joint venture here.
The deal would see Venezuela and Gold Reserve, which were embroiled in a
dispute over the termination of the company's Las Brisas gold concession in
2009, jointly exploit the Brisas and Las Cristinas mines, President Nicolas
Maduro said. The deal's fine print was
not immediately clear, although Venezuela said the deal would result in a US$ 2
billion-dollar loan for the crisis-hit country.
GOLD RESERVE's president, Doug Belanger, told Reuters that Venezuela
would likely use the mining property as collateral to obtain financing. The small Canadian miner will receive
compensation as part of the deal, Belanger added, although declining to give
estimates for compensation or investment.
"We're in agreement to
settle. We will be receiving a payment," Belanger said after the
signing ceremony in Caracas, adding a final settlement was expected soon. GOLD
RESERVE was awarded around US$ 750 million by the International Center for
Settlement of Investment Disputes for the 2009 termination of its Las Brisas
concession. Oil Minister Eulogio Del Pino said Gold Reserve would have a 45%
stake in the joint venture, with the remaining 55% going to the state. "(This
agreement) demonstrates this country's responsibility toward international
investors," said Del Pino. (Reuters: http://www.reuters.com/article/us-venezuela-arbitration-idUSKCN0VY05Y)
Venezuela exhibits
mining potential to domestic and foreign companies
Nelson Merentes, President of the Central Bank,
reports that a meeting has been held with local and foreign companies to
present them the potential of development of projects in the Orinoco mining
area, located in Bolívar state, south Venezuela. Merentes said the meeting was
aimed at attracting domestic and foreign investment to boost the mining sector
and a new economic model. He said that, in addition to exploitation and
exploration, the global financial aspect was tackled "for the business itself" of secondary markets and other phases
of mining. During these meetings, President Maduro claimed that Venezuela will
soon be certified as holding the world’s second largest gold reserves, holding
4,300 tons; and that agreements have been reached with two Chinese (CAMC Engineering
CO. LTD, and the Yakuang Group), as well as one mining company from the Congo
Republic, to explore for and mine gold, coltane, and diamonds, among other
minerals, with investments of up to US$ 5 billion and a potential of generating
some US$ 200 billion. The deal with Canada’s GOLD RESERVE was announced during
this same meeting. (El Universal, http://www.eluniversal.com/economia/160224/venezuela-exhibits-mining-potential-to-domestic-and-foreign-companies;
and more in Spanish: El Universal, http://www.eluniversal.com/economia/160225/explotacion-minera-podria-generar-200-millardos;
El Nacional, http://www.el-nacional.com/economia/mineria-presidente-Nicolas_Maduro-Venezuela-arco_minero_0_799720203.html;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/ejecutivo-firmo-decreto-para-certificacion-del-arc.aspx;
AVN; http://www.avn.info.ve/contenido/decretada-zona-desarrollo-estrat%C3%A9gico-nacional-arco-minero-del-orinoco;
http://www.avn.info.ve/contenido/estado-venezolano-suscribi%C3%B3-cuatro-acuerdos-para-impulsar-desarrollo-del-arco-minero;
http://www.avn.info.ve/contenido/certificaci%C3%B3n-ubicar%C3%A1-venezuela-como-segundo-pa%C3%ADs-mayor-n%C3%BAmero-reservas-oro;
http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/eulogio-del-pino-hoy-es-el-punto-inicial-del-motor.aspx)
Some POLAR plants
winding down, unions protest regime takeover threats
Supply scarcities have led to paralyzing the
Polar cleaning products plant for the past six months, with no detergent
production. It previously put out 6,500 tons of detergent each month, and 3,500
tons of soap. The report comes from plant labor leader Freddy Baldo, who says “we ask the government to free up FOREX so
that we can import sodium sulfate from China or Spain so we can continue
producing powder detergent”. Roger Palacios, leader of the union at the
Polar tuna plant in Sucre state reports a 680-ton cargo of tuna allowed for
production to start up for seven days, but that they are only processing one
production line and “could be producing
1500 tons of tuna”. Over 250 leaders of around 24 POLAR unions nationwide
joined to reject government threats of taking over the food and beverage
conglomerate, which supplies many of the nation’s staples. “We need the government to pay suppliers in
order to preserve our jobs. We are 30,000 workers that strive to produce in
this country”. For his part,
government party leader Captain Diosdado Cabello, a member of the National
Assembly, again threatened the company saying “just try shutting down your plants, Mr. Mendoza, and see what happens”.
More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/empresa-polar-planta-limpieza-tiene-6-meses-sin-pr.aspx#ixzz41Aqwo3jC;
http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/cabello-a-lorenzo-mendoza-paralice-sus-plantas-a-v.aspx#ixzz41AruLtMl;
El Nacional; http://www.el-nacional.com/economia/Produccion-Empresas-Polar-paralizacion-insumos_0_799720135.htmlM;
http://www.el-nacional.com/economia/Representantes-rechazaron-intervencion-Empresas-Polar_0_800319969.html;
Notitarde, http://www.notitarde.com/Economia/Trabajadores-rechazan-posible-intervencion-a-Empresas-Polar/2016/02/25/894903/)
Economy & Finance
Venezuela can meet tomorrow’s US$ 1.5 billion
debt payment
Venezuela has resources to fully make a US$ 1.5
billion payments due tomorrow on its global 2016 bond, three sources close to
government said, though maturities later in the year may be harder to meet. Reeling
from recession and low oil prices, the nation paid US$ 10.5 billion of debt
last year by reducing imports, withdrawing International Monetary Fund
reserves, selling assets and engaging in gold swaps with foreign banks. To
guarantee tomorrow's payment, President Nicolas Maduro's socialist government
has squeezed imports further since December, despite shortages hurting his
popularity. "The problem is not
February," said one of the sources familiar with the government's
economic strategy. (Reuters, http://www.reuters.com/article/venezuela-debt-idUSL2N1631PV)
Ramos Allup says: “The government has two options: Cut spending
or more debt”
After hearing out the annual report delivered
to the National Assembly by Executive Vice President Aristóbulo Istúriz,
Assembly president Henry Ramos Allup said: “If
at some time they set up an investment system that cannot be paid for bow,
unnecessary spending must be cut”. He says the government should evaluate
its operations and that of the companies it took over, and adds that the food
crisis is due to controls set up by the government: “When the government controls everything, solving problems depends on
what steps it can take…No one can deny the government has raised salaries, but
those increases have been eaten up by inflation”. More in Spanish: (El
Nacional, http://www.el-nacional.com/politica/Ramos-Allup-gobierno-opciones-endeudarse_0_799120276.html)
Central Bank prepares
to issue new bills
Venezuela’s Central Bank (BCV) is preparing to
issue new 500- and 1,000-bolivar bills, equivalent to US$ 2.50 and US$ 5 at the
highest official exchange rate of 200 bolivars per dollar, according to media
reports. The largest current bill in circulation – 100 bolivars – is
insufficient to keep up with the country’s high inflation rate, the business
daily El Mundo reported, citing BCV officials. The BCV reported last week that
Venezuela’s inflation rate hit 180.9% in 2015, the highest in the country’s
history and well above the previous record of 103% registered in 1996. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406307&CategoryId=10717)
58,000 shops shut down
during 2015
Zulia state business leader Gilberto Gudiño
reports that - based on data from the National Statistics Institute – 58,000
shops closed down nationwide. “The
numbers could be more dramatic, the truth is the country is doing away with
companies”, he said – and added “fewer
than 300,000 companies are barely surviving, and in this context 58,000 is a
very important number.” More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/reportan-que-58-000-comercios-cerraron-en-2015.aspx#ixzz415ISHkjH)
Politics and International Affairs
Maduro dooms himself with tepid reforms
With Latin America's most troubled economy
heading toward default, there was hope that President Nicolas Maduro
might discard half-measures and pull his country back from the edge. Instead,
last week he announced policy changes that amounted to an optical illusion. To
wit, although he raised the price of the world's cheapest gas by as much
as 6,000% (for high octane fuel), he kept the price
fixed -- and thanks to government subsidies Venezuelans can still fill up for a
world-beating four cents to the gallon. He simplified the confounding, multi-tiered exchange rate system
and devalued the bloated national currency, but by not nearly enough: On the
street a greenback costs 1,000 bolivars, at least five times the official
government rate. So much for Nobel Peace Prize laureate Oscar Arias's warning from the floor of the National Assembly
last week that "it's not possible to overcome the crisis by deepening the
current model, only by abandoning it." (Bloomberg, http://www.bloombergview.com/articles/2016-02-24/venezuela-s-maduro-dooms-himself-with-tepid-reforms)
Legislature
investigates allocation of US$ 230 billion by FOREX authorities
The National Assembly’s Control Committee will
investigate US$ 230 billion allocations by CADIVI and CENCOEX from 2003 to
2014, as it is not publicly known exactly who received this currency, allegedly
allocated for food and medicine imports. Congressman Ismael Garcia says that,
for example, “during the time General
Guiseppe Joffreda, was president of CORPOVEX, funds were allocated through the
SICAD I and SICAD II systems, 8’% of which went to public agencies: BARIVEN,
CVG International, VESINCA, SUVINCA, CASA and AGROPATRIA, and supplies were not
guaranteed”, he said. He also referred to 116,808 tons of food bought by
PDVAL in 2009, which were incinerated, with no one investigated. More in
Spanish: (Notitarde; http://www.notitarde.com/Economia/Contraloria-investigara-liquidacion-de-230-mil-millones-por-Cadivi-/2016/02/24/894940/;
El Nacional, http://www.el-nacional.com/politica/Investigaran-perdida-millardos-importaciones_0_800319962.html)
Maduro seeks Obama
conciliatory gesture
Media here is highlighting statements by
President Nicolas Maduro, who has asked his counterpart Barack Obama to repeal
the decree of sanctions in force since 2015 against the country. “I hope President Obama will reject the
sanctions decree against Venezuela and receive the credentials to Maximilien
Arbelaiz so that he can show his goodwill towards Venezuela”, Maduro said. On
March 9, 2015, the head of the White House signed a decree to punish seven
Venezuelan government officials for alleged human rights violations, which
means the freezing of assets and a ban on entry into the United States. The decree, which described the situation in
Venezuela as a threat to the United States, sparked outrage in the socialist
government, and prompted an international campaign of signatures calling for
its repeal. “Receiving the credentials would be a simple gesture (...) We need to
talk, understand and respect each other”, added Maduro. (Prensa
Latina: http://www.plenglish.com/index.php?option=com_content&task=view&id=4641561&Itemid=1)
Special UN committee
to visit Venezuela over Guyana border dispute
A special committee of the United Nations (UN)
will visit Venezuela in the upcoming days to learn the truth about "Venezuela's legitimate claim" over
the Essequibo disputed territory, says Foreign Minister Delcy Rodríguez. (El
Universal, http://www.eluniversal.com/nacional-y-politica/160224/special-un-committee-to-visit-venezuela)
