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, June 24, 2016

June 23, 2016


International Trade

Venezuela’s government owes shipping companies over US$ 1 billion for unreturned containers

International shipping companies operating here report it has been impossible to recover containers and government is welching on payments: “There are between 4,000-6,000 containers in the hands of government agencies, some of them for over a year. The use and delay in returning these assets has generated a US$ 1 billion debts, which keeps growing by the day”, says Eddy Meayke, President of Venezuela’s Shipping Line Association. Se reports Venezuela has become an insolvent and high risk client, which is leading shipping companies to set conditions for service here. “They will demand cargo is prepaid, with a warranty for the cost of the container and average delays”, he said.  Meayke also reported a 60% drop in cargo volume to Venezuela. José Modica, President of Venezuela’s Exporters Association, reports that lack of containers has hindered exports, which have gone through their worst year in a decade, and that out of 3,000 exporting companies here in 2010, only 773 remain. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Gobierno-millardo-navieras-devolver-contenedores_0_870513202.html)

 

Trade Minister claims Venezuela will exceed 2015 export figures

Foreign Trade and Investment Minister Jesús Faría claims that “the government is making progress with an export-oriented industrialization model.” He says that this model can replace imports, boost exports and create jobs, as well as provide conditions for the country’s political stability and independence. (El Universal, http://www.eluniversal.com/noticias/daily-news/minister-faria-venezuela-will-exceed-exports-figures-from-2015_316050)

 

 

Oil & Energy

PDVSA unit eyes up to US$ 600 million to overhaul Aruba refinery

CITGO Petroleum, the U.S. unit of Venezuela's PDVSA, will likely invest about US$ 400 million to US$ 600 million to overhaul Aruba's refinery under a 25-year lease with the Caribbean island's government, a top PDVSA official said on Wednesday. CITGO earlier this month signed the agreement to reactivate the 235,000-barrel-per-day refinery, which would help process this nation's extra-heavy crude. The previous operator, Valero Energy Corp, idled the refinery in 2012 because of its low profit. "We're eyeing investments in the refinery that would be more or less between US$ 400 (million) and US$ 600 million," Jesus Luongo, vice president of refining, trade and supply, said in an interview on the sidelines of an oil workers' rally in support of the leftist government of Nicolas Maduro. (Reuters, http://www.reuters.com/article/venezuela-aruba-refinery-idUSL1N19E18K)

 

Russia’s ROSNEFT to build LNG plant in Venezuela

Russian oil firm ROSNEFT and Venezuela’s PDVSA have signed an agreement on the basic terms of a joint venture for the extraction, preparation and monetization of gas fields of Patao, Mejillones and potentially of Rio Caribe. Venezuelan Petroleum and Mining Minister Eulogio Del Pino said that PDVSA and ROSNEFT might sign documents on the establishment of a joint gas project in Venezuela within two months, possibly in July, during a Venezuelan visit of Igor Sechin on May 22-24. “We will certainly implement the extraction [of gas] offshore in Venezuela and will definitely put an LNG liquefaction plant there," Sechin said in an interview. (PRIME BIZ NEWS: http://www.1prime.biz/news/_Report_Russias_Rosneft_to_build_LNG_plant_in_Venezuela/0/%7B71E5F3C3-BAF4-4957-B5F1-4409BF1AD2D8%7D.uif)

 

 

Economy & Finance

China denies meeting with opposition over Venezuela’s debts

China has denied reports that it held talks with opposition representatives, seeking assurance that Venezuela’s large debt to Beijing is repaid if President Nicolas Maduro leaves office. Hua Chunying, a spokesperson for China’s Foreign Ministry, said those talks “absolutely do not exist”, in reference to a report published by the Financial Times. She added that bilateral mechanisms between both nations “are functioning well”, and expressed trust that Venezuela’s people “will have the wisdom and capacity to deal with their internal affairs”. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/China-dirigentes-MUD-prestamos-Venezuela_0_870512941.html)

 

Is Venezuela close to boiling point?

Has the crisis in Venezuela hit a point of no return? A growing number of analysts seem to think so. The country’s dire economic situation — marked by rampant inflation, chronic shortages of basic goods and rolling power blackouts – has deteriorated in recent weeks, with violent food riots erupting across the country. Yesterday a gunman opened fire at the country’s central bank. “Venezuela is on the brink of economic and social collapse,” Capital Economics said in a note earlier this month. “There is a high chance of a sovereign default and a removal of the president over the next eighteen months.” “The worst part of this story is that Venezuela hasn’t hit bottom yet – the only light at the end of this tunnel seems to be from another of a series of oncoming locomotives,” said Russ Dallen, managing partner at Caracas Capital Markets. (Financial Times: http://www.ft.com/fastft/2016/06/21/is-venezuela-close-to-boiling-point/)

 

 

Politics and International Affairs

U.S. in new talks with Venezuela amid worsening crisis, Shannon meets with Maduro

A senior U.S. diplomat is in Venezuela to jumpstart dialogue between the normally hostile governments as the socialist-run nation is torn apart by daily food protests and a campaign to oust President Nicolas Maduro. Thomas Shannon, a career diplomat with extensive experience in Latin America, flew to Caracas after weeks of looting and hunger riots in Venezuela. The riots led to hundreds of arrests and several deaths; and as Venezuela unravels, U.S. officials are increasingly concerned about the risk of further bloodshed and a humanitarian crisis that could spill across its borders and undermine President Barack Obama's legacy in a region where he made history by reopening relations with Cuba. State Department spokesman John Kirby said Shannon, who now serves as Undersecretary of State for Political Affairs, hopes to foster dialogue about the social, economic and political challenges facing this country.  The visit comes as the Organization of American States is set to meet later in the week in Washington to debate the mounting crisis and weigh sanctioning Maduro for allegedly stamping out political dissent in violation of regional commitments to democracy. Socialist-run Venezuela has for years had tumultuous relations with Washington, and a similar rapprochement led by Shannon stalled last year over the jailing of opposition leader Leopoldo Lopez. Despite a harsh exchange of words at a summit in the Dominican Republic last week, U.S. Secretary of State John Kerry and Venezuelan Foreign Minister Delcy Rodriguez agreed to re-start talks in an effort to reduce tensions. Shannon steps into the quagmire with an uncertain outcome. A procession of visits he made last year to Caracas yielded no tangible results, setting low expectations that this trip could result in a breakthrough on releasing political prisoners and calls for the referendum to move forward. The opposition held talks with Maduro two years ago after bloody anti-government protests swept the nation, but that dialogue eventually dissolved without bearing fruit. Today, government opponents are taking a different tack, organizing around a recall referendum they hope will lead to Maduro being removed from office this year with one of their own potentially to replace him. After meeting with Shannon, President Nicolas Maduro said: “I have confirmed to him in a long conversation our interest that sooner rather than later we can build an agenda of respect, a positive agenda between the United States government and the revolutionary and Bolivarian government that I lead”. The discussions went on for nearly two hours. (Reuters, http://www.reuters.com/article/us-venezuela-usa-idUSKCN0Z71YT; El Universal, http://www.eluniversal.com/noticias/daily-news/shannon-meet-with-venezuelan-congress-representative_316094; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414864&CategoryId=10717)

 

…but Maduro again threatens to radicalize “the revolution

President Nicolas Maduro has threatened to “radicalize the revolution” is Venezuela is suspended or there is an intervention as a result of today’s scheduled meeting of the Permanent Council of the Organization of American States on applying the Hemispheric Democratic Charter in the case of Venezuela. “If someday the forces of the imperial right wing approve in any instance a plan to expel Venezuela, suspend, exclude or intervene in Venezuela, rest assured that I would not hesitate to take the most radical steps I need to take to radicalize the Venezuelan revolutionif they commit the mistake of messing with Venezuela, I will call on national union, for all patriots to defend peace, sovereignty and integrity of this sacred land”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/maduro-suspenden-intervienen-venezuela-radicalizare-revolucion_315981; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/presidente-maduro-constituci%C3%B3n-bolivariana-es-%C3%BAnica-carta-que-reconocemos-venezolanos)

 

… Capriles tells Shannon “there is no dialogue” in Venezuela, and Lopez says recall takes precedence over talks

Two-time presidential candidate Henrique Capriles met with the U.S. Under Secretary of State for Political Affairs, Thomas Shannon, and told him that “there is no dialogue” in this country. “I told Mr. Thomas Shannon, with whom I had the opportunity to talk to a couple of hours ago, that in Venezuela, there’s no process of any dialogue,” said Capriles. “Maduro wants to deflate concerns of our sister countries and the governments of Latin America. Since the Latin American governments are aware that the social unrest in Venezuela, for which Venezuela has no solution, will also have an impact on their countries,” added Capriles, also the governor of Miranda state. Imprisoned opposition leader Leopoldo Lopez wrote from his jail cell that “the Democratic Charter will facilitate the process so that the dialogue that currently does not exist in Venezuela can, in the first place, take place and that it can also be effective and have an agenda and clear time frames”. He added that “no talks can be above the constitutional right our people have to a recall referendum on Nicolas Maduro this year 2016”. (The New York Times: http://www.nytimes.com/aponline/2016/06/21/world/americas/ap-lt-venezuela-us.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414792&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/capriles-shannon-talks-have-been-held-venezuela_316057; and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/lopez-carta-democratica-facilitaria-proceso-dialogo_316180)

 

Capriles reports that 98% of required recall signatures have been validated, denounces government sabotage

Capriles spoke as thousands of Caracas residents stood in a warm drizzle waiting to verify their signatures on a recall petition by having their fingerprints taken. The weeklong verification drive began Monday and is the first of a series of steps in the byzantine recall process. People in the lines said they were glad to wait and see the recall as the best way to remedy the shortages and triple-digit inflation that are forcing many here to skip meals. Members of the opposition say the recall drive and food riots have caused the government to tighten control over critics. Human rights groups say intolerance for dissent has led to the jailing of dozens of people they consider of political prisoners. Over the weekend, officials arrested two opposition activists who had been traveling outside of Caracas to participate in the validation process. On Tuesday, Human Rights Watch denounced the arrests and called on authorities to produce a legal rationale for holding the men or release them immediately. Opposition leader Henrique Capriles has reported that by the second day of a 5-day period, 156,968 signatures, almost 98% of those required, have now been validated as demanded by the National Elections Council (CNE). Jesus Torrealba, Executive Secretary of the Democratic Unity (MUD) coalition has charged that the regime and the ruling PSUV party have started to “actively sabotage” the process of validating signatures in a petition to start a recall referendum process against President Nicolas Maduro. He specifically accused regional officers of the National Elections Council (CNE) for a deliberate slowdown in Nueva Esparta, Carabobo, Aragua and Anzoátegui, along with other obstacles to voter movement. He accused regional director Joe Uzcategui of holding up the process in the island of Margarita for several hours. At the same time, Capriles accused President Nicolas Maduro of instructing the National Elections Board to slow down the validation of signatures for a petition to carry out a recall referendum against the President. He repeated his charge that the CNE was carrying out a deliberate slowdown in procedures. “They assigned 300 machines nationwide for more than 1.3 million people”, placing faulty equipment in faraway locations, and accused the 4 members of the pro-government faction that dominate the 5-member council of planning the delays. He warned election officials that to deny constitutional and human rights “has administrative and penal consequences”. He says the National Guard is there to safeguard the Constitution, not Maduro’s interests. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/capriles-dice-que-se-han-validado-el-98-de-las-firmas-para-revocatorio/; El Universal, http://www.eluniversal.com/noticias/politica/capriles-esta-para-garantizar-constitucion-interes-maduro_316111; http://www.eluniversal.com/noticias/politica/mud-denuncia-cne-saboteo-activo-del-oficialismo-validacion_316080)

 

OAS Almagro calls for "content and timing" in Venezuela talks

Secretary General of the Organization of American States (OAS) Luis Almagro has called for an agreement on “mediators, content and timing” so that “distrust does not hinder” talks between the Venezuelan government and the opposition. “A successful dialogue entails agreement on mediators, content and timing that generates mutual trust,” Almagro made his statement after a meeting of the OAS Permanent Council, which received Spain’s former President José Luis Rodríguez Zapatero to elaborate on the situation of international mediation in Venezuela. Zapatero, who heads a group of 3 former presidents proposed by the Union of South American Nations (UNASUR) to broker talks here, warned that any talks in Venezuela will be “long, hard and difficult”. He defended the group’s “full impartiality”, and said talks must produce “results, facts”, and said the UNASUR group was only in a “preliminary stage”, and called their efforts a “preventive peace process”. Opposition leaders here have seriously questioned the impartiality of Zapatero, and Leopoldo Lopez Sr., father of imprisoned leader Leopoldo Lopez Mendoza, says the former Spanish president “is a negotiator” on behalf of President Nicolas Maduro, and that his work is “unacceptable” because human rights are not negotiable. Zapatero has ignored opposition calls for a recall referendum to oust Maduro, which is a right established in Venezuela’s constitution.(El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-asks-for-content-and-timing-for-talks-venezuela_316081; and more in Spanish: Infolatam: http://www.infolatam.com/2016/06/21/zapatero-advierte-de-que-dialogo-en-venezuela-sera-largo-duro-y-dificil/; Factor MM: http://linkis.com/factormm.com/FNE7K)

 

Congress Speaker, opposition legislators travel to OAS Permanent Council

Henry Ramos Allup, President of the National Assembly, and Luis Florido, head of the legislator´s Committee on Foreign Policy, are in Washington to attend the special meeting of the Permanent Council of the Organization of American States (OAS), where participants will discuss a report by the OAS Secretary General Luis Almagro on Venezuela’s situation. Upon arriving in Washington, Ramos Allup said “conditions are necessary in order to have talks, but the government does nothing, provides no demonstration, and the country’s situation becomes more serious by the day”. (El Universal, http://www.eluniversal.com/noticias/daily-news/congress-speaker-anti-govt-deputies-travel-oas-permanent-council_316082; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/ramos-allup-washington-cada-dia-agrava-mas-situacion-del-pais_316181)

 

U.S. hopes for 'group of friends' to help Venezuela

Washington has high hopes for an Organization of American States meeting on Venezuela on Thursday, which could lead to the formation of an alliance of interested nations to help resolve its crisis, a top State Department official said. "Tomorrow's meeting is in our view a very important meeting," Annie Pforzheimer, acting deputy assistant secretary for Western Hemisphere Affairs, testified at a House of Representatives subcommittee hearing on Wednesday. "We could see the formation of something like a 'group of friends' from the OAS member states who would... try to work with the parties in Venezuela and urge them to pursue sustainable solutions there," she said. (Reuters, http://www.reuters.com/article/us-venezuela-oas-usa-idUSKCN0Z82GW)

 

 Chavista” leader claims Maduro’s resignation is being negotiated

Former Caracas Mayor and legislator Juan Barreto, a long-time supporter of the late President Chavez, says several pro-Chavez groups have asked President Nicolas Maduro to avoid an election that could cause them a severe defeat if it is lost by 80%. He says Maduro’s resignation is being negotiated in order to avoid the disappearance of the “Chavista” movement. In a radio interview, Barreto added that Maduro does not agree with resigning, but is considering it; and said greater doubts would arise if the National Elections Board does not cooperate with citizens in considering opposition suggestions aimed at improving the process. The information was denied by Congressman Diosdado Cabello, First Vice President of the ruling PSUV party, who said “Juan, you are wrong. You have been misinformed. No one is negotiating Nicolas Maduro’s departure. Whoever wants to desert, let him desert. But that is not the case”. More in Spanish: (Tal Cual: http://www.talcualdigital.com/Nota/127188/juan-barreto-renuncia-de-maduro-se-esta-negociando?platform=hootsuite; El Nacional, http://www.el-nacional.com/politica/Cabello-Barreto-Nadie-Nicolas-Maduro_0_871113214.html)

 

Venezuela’s Cardinal says the recall process must proceed in order to have talks

Venezuela’s Cardinal Jorge Urosa says that in order to have talks between the regime and the opposition there must be mutual respect and compliance with the Constitution, which provides for recall procedures against public officials. He says that government and the Elections Board are under the duty to quickly carry out a vote. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/dialogo-permitirse-revocatorio_0_871113217.html; El Universal http://www.eluniversal.com/noticias/politica/urosa-afirma-que-revocatorio-indispensable-para-que-dialogo_316161)

 

Mexican senators request firm stance on Venezuela

The Mexican government must take an “assertive” stance on the collective defense of democracy and protection of human rights in view of the social, political and economic deadlock in Venezuela, according to the National Action Party (PAN). In a letter to Mexico’s President Enrique Peña Nieto, and in light of the “disruption of democratic order” in Venezuela, a number of senators of the conservative party said enforcement of the Inter-American Democratic Charter of the Organization of American States (OAS), is “indispensable and urgent”. “Mexico needs to speak up to request the release of political prisoners in Venezuela and call upon the country’s authorities to resolve the partial rundown of services and (violation of) basic rights to food, public security, and law enforcement millions of Venezuelans are suffering” senator Laura Rojas emphasized. (El Universal, http://www.eluniversal.com/noticias/daily-news/mexican-senators-request-firm-stance-venezuela_316055)

 

Bolivia’s Morales accused OAS SG Almagro of promoting US intervention in Venezuela

Bolivia’s President Evo Morales has accused OAS Secretary General Luis Almagro of promoting “planned US intervention against Venezuela”, and has called him an “infiltrated agent of the empire”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/morales-acusa-a-almagro-de-promover-la-intervencion-de-eeuu-contra-venezuela/)

 

Maduro in Cuba taking part in the Colombian cease fire agreement


 
 

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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