July 05, 2016

International Trade

12 food ships anchored in Bolipuertos

A total of 12 food ships are anchored at Puerto Cabello, Carabobo state. This was announced by Food Minister General Rodolfo Marco Torres, who says part this includes boats bearing yellow corn, two with soybeans, and another vessel is currently offloading 30,000 tons of white corn. More in Spanish: (Notitarde; http://www.notitarde.com/Hay-12-buques-de-alimentos-anclados-en-Bolipuertos/Economia/2016/07/02/1007351/)

 

Táchira state governor calls for reopening border

Táchira border state governor, Lieutenant José Vielma Mora, has called for reopening the border with Colombia to increase trade. He also speaks of building a refinery along the border to supply Colombia with fuel, as he conducted an inspection of a border pass jointly with the governor of Colombia’s bordering state of Norte de Santander, William Villamizar. Both governors agreed on the need to restore the important trade, social, political and cultural exchanges between both nations. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/julio/2/161414=gobernador-vielma-mora-evalua-construir-una-refineria-en-la-frontera)

 

 

Logistics & Transport

Aeronautic services are now officially priced in US dollars

The Transport and Public Works Ministry has published official dollar tariffs for aeronautic services in Venezuela, at the Maiquetía International Airport and all other airports under the state control. Service to Latin America and the Caribbean will cost US$ 3,000; to the US AND Canada, US$ 3,300 and to Europe, US$ 5,000. More in Spanish: (Notitarde; http://www.notitarde.com/Fijan-tarifas-del-servicio-aeronautico-en-dolares/Economia/2016/06/30/1007156/; El Nacional, http://www.el-nacional.com/economia/Fijan-tarifas-dolares-servicio-aeronautico_0_875912582.html; El Universal, http://www.eluniversal.com/noticias/economia/nuevas-tarifas-para-servicio-aeronautica-son-fijadas-dolares_317306)

 

 

Oil & Energy

Venezuela oil price falls below us$ 40

The price Venezuela receives for its mix of medium and heavy oil fell back below US$ 40 as markets and oil prices around the world collapsed on a surprise decision to leave the European Union by the U.K.  According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending July 1 was US$ 39.75, down 41 cents from the previous week's US$ 40.16. According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 31.15 for the year to date. Venezuela's average oil price for 2015 was US$ 44.65, down from 2014's US$ 88.42, below 2013's US$ 98.08, 2012's US$ 103.42 and 2011's US$ 101.06, 2010's US$ 72.43, and even 2009’s average price of US$ 57.01. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415590&CategoryId=10717)

 

PDVSA says 2015 revenue tumbled on oil price fall

State oil company PDVSA's 2015 revenue tumbled 41% from the previous year, the company announced, as a result of a steep drop in oil prices that has pushed this nation into economic crisis. Revenue dropped to US$ 72.2 billion from US$ 121.9 billion the year before, while net profit fell to US$ 7.3 billion compared with US$ 9.1 billion the previous year, the company said. Economists tend to focus on PDVSA's revenue because of its multibillion-dollar contributions to government campaigns make profit figures less relevant in assessing performance than they are for private firms. PDVSA's transfers to social programs in 2015 were US$ 9.2 billion, and state development fund Fonden received US$ 974 million. According to the financial results of fiscal year 2015, Pdvsa’s oil output averaged 2.7 million barrels per day (bpd). However, the company’s head Eulogio del Pino claims the “industry produced an equivalent of 3.8 million barrels of oil.” (Reuters, http://www.reuters.com/article/us-venezuela-pdvsa-idUSKCN0ZJ02T; Bloomberg, http://www.bloomberg.com/news/articles/2016-07-03/venezuela-s-pdvsa-revenue-plunges-amid-commodity-price-collapse; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-oil-revenues-plummet-407-2015_317708)

 

Maduro ends power rationing as drought eases

Venezuela is ending an electricity rationing program launched in April in response to a severe drought that crimped the operations of the nation's hydroelectric generators, President Nicolas Maduro on Friday. "As of Monday we can say that the power administration plan will stop and electrical service will function normally throughout the country," Maduro said in a televised broadcast. "Today we can say that Guri has recovered and we have the conditions under which power service can function normally." Heavily subsidized electricity has spurred one of the region's highest rates of power consumption and left the state-run utilities with limited revenue. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0ZI01B)

 

Amuay refinery ups output, restarts distillation unit

Venezuela's 645,000 barrel-per-day (bpd) Amuay refinery has restarted a distillation unit and is now processing 350,000 bpd compared with 160,000 bpd before, according to a union leader and a refinery worker who asked not to be identified and said Amuay's 180,000 bpd distillation unit No. 5 was producing at 140,000 bpd. The refinery's cat cracker is operating at around 70,000 bpd, said union leader and government critic Ivan Freites. The refinery's flexicoker unit remains shuttered but is expected to be operational again within 20 days, he said. (Reuters, http://www.reuters.com/article/us-refinery-operations-pdvsa-amuay-idUSKCN0ZH62B)

 

Harvest Natural Resources dumps Venezuela operations

Harvest Natural Resources, Inc. (HNR) has announced that it and its wholly-owned subsidiary, HNR Energia B.V. (HNR Energia), have entered into a share purchase agreement with CT Energy Holding SRL, a private investment firm (CT Energy), to sell all of the company’s interest in Venezuela. Under the terms of the Share Purchase Agreement, CT Energy will acquire HNR Energia’s 51% interest in Harvest-Vinccler Dutch Holding B.V., a Netherlands company, through which all of Harvest’s Venezuelan interests are owned, and CT Energy or an affiliate will deliver to Harvest US$ 80 million in cash, subject to certain adjustments, and a $12 million six-month 11% note payable by CT Energy or such affiliate. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415544&CategoryId=10717)

 

PDVSA to export gas to Colombia

Petroleum and Mining Minister Eulogio del Pino announced that state-run oil company Petróleos de Venezuela (PDVSA) would soon begin to export gas to Colombia, as part of the Mariscal Sucre oil project. Del Pino, who is also Pdvsa’s head, stressed the importance of gas export, which will be conducted from Cardón gas field in north-western Falcón state. This is one of the world’s largest gas fields, whose operations began last year with private investment. (El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-export-gas-colombia_317684)

 

Maduro meets with US energy company representatives

President Nicolás Maduro on Friday met with Joseph Kennedy, the founder of US non-lucrative Citizens Energy Corporation, at the Miraflores Presidential Palace downtown Caracas, for a meeting that was also attended by Foreign Minister Delcy Rodríguez and corporation’s representatives. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-meets-with-energy-company-representatives_317716)

 

 

Economy & Finance

Central Bank reportedly provides full statistics to the IMF for the first time in 12 years

A source within Venezuela’s Central Bank (BCV) says the institution has provided the International Monetary Fund with full statistics for the first time in 12 years. The same source says the government ordered the BCV to provide statistics for the first time since 2004, when the late Hugo Chavez ordered IMF offices in Venezuela closed. Analysts believe the government may be seeking some type of loan or financial aid from the IMF, or that it could be getting ready to draw upon a larger portion of drawing rights from the institution, since Venezuela has used up all those it could freely cash in. Both options would require providing economic data for the IMF to evaluate. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Banco-Central-Venezuela-estadisticas-FMI_0_877712316.html)

 

Bernal admits expropriations have failed

Freddy Bernal, who heads the Control and Command Center for the government’s Local Supply and Production Local Committee (CLAPs), has admitted that past expropriations have failed. He says “in the past we took some steps, such as expropriating some companies and, unfortunately, we did not make them productive, or they failed in our hands”. He says they are now “sitting down with business to establish joint ventures, 60% government, and 40% private, in several areas: fishing, industry, manufacture”. More in Spanish: (Noticieron Venevision: http://www.noticierovenevision.net/economia/2016/julio/3/161460=freddy-bernal-reconocio-que-las-expropiaciones-fracasaron; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/bernal-admitio-que-las-expropiaciones-fracasaron.aspx#ixzz4DR1hOrkR)

 

Only 10% of all companies have received FOREX through the DICOM system, according to a poll taken at CONINDUSTRIA’s 2016 meeting; and only 2% received FOREX through the officially controlled preferential rate. The poll also shows that 47.5% of industries have raw materials inventories lower than 3 months. 81% have lowered production, and another 56% expect to lower production within the next 6 months. More in Spanish: (Notitarde: (Notitarde; http://www.notitarde.com/Solo-10-de-las-empresas-han-recibido-dolares-Dicom/Economia/2016/06/30/1007155/)

 

“Venezuela’s economic indicators at this time are, by far, the worst in history”, says Luis Vicente León, of DATANALISIS. He says 65% of the population prefers the black market to buy goods that are price-controlled, leading to a surcharge of an average 300 percentage points about official prices. “The gap between official and black market prices is some 80-100 times”. A 10% drop in overall consumption is expected this year. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Indicadores-economicos-Venezuela-momento-historia_0_875912744.html)

 

 

Politics and International Affairs

Obama urges Venezuela to respect democratic process, recall referendum

US President Barack Obama has weighed in on Venezuela’s political turmoil, calling on the government to release what he called “political prisoners” and to respect the country’s National Assembly.  The head of state made the comments in a press conference from the North American Leaders Summit in Ottawa, Canada, where he also urged both political factions in Venezuela to participate in dialogue. He was accompanied by his Mexican and Canadian counterparts, Enrique Peña Nieto and Justin Trudeau. "Given the very serious situation in Venezuela and the worsening plight of the Venezuelan people, together we're calling on the government and opposition to engage in meaningful dialogue and urge the Venezuelan government to respect the rule of law and the authority of the national assembly," Obama said at a news conference with the leaders of Canada and Mexico. "Political prisoners should be released, the democratic process should be respected and that includes legitimate efforts to pursue a recall referendum consistent with Venezuelan law."  (Reuters: http://www.reuters.com/article/us-venezuela-usa-obama-idUSKCN0ZF2KV; MSNBC: http://nsnbc.me/2016/07/02/obama-urges-dialogue-in-deadlocked-venezuela-sides-with-opposition/)

 

Argentina’s Macri accuses Venezuela of violating “every human right”

Argentina’s President Mauricio Macri has accused the Venezuelan regime of “violating every human right”, and hopes for a recall referendum as soon as possible. He says the Maduro regime “has brought famine and neglect to the Venezuelan people, which is why they need a referendum, they need to have elections as soon as possible”. Asked whether this position clashes with Argentina’s stance at the Organization of American States on whether to apply the Democratic Charter, he said: “We have done what we have been doing. We are seeking different routes to bring about this result, elections as soon as possible and always upholding our commitment to defend human rights in Venezuela”. More in Spanish: (Clarin: http://www.clarin.com/mundo/Macri-Venezuela-violar-derechos-humanos_0_1607239347.html

 

Paraguay seeks to exclude Venezuela from MERCOSUR

Paraguay has formally asked for a special meeting of MERCOSUR foreign minister to examine Venezuela’s domestic political situation in the light of the 1998 Ushuaia Protocol, which establishes a “democracy clause” calling for excluding any country that violates democratic order from the regional bloc. Paraguay’s ambassador to MERCOSUR, Hugo Saguier, who delivered the request to Uruguay’s Foreign Minister Rodolfo Nin, says “we are calling for using the Democratic Charter and the Urshuaia Protocol because we believe Venezuela is doing through a democratic crisis”. He also said Paraguay is upset because Uruguay and Argentina unilaterally called off a meeting of heads of state to transfer the pro tem Presidency of MERCOSUR from Uruguay to Venezuela, and instead called on the group’s foreign ministers to do so. Nin has replied that transferring the pro tem presidency is a matter of rules and does not bear upon political matters. More in Spanish: (El Observador: http://www.elobservador.com.uy/paraguay-pide-discutir-la-exclusion-venezuela-del-mercosur-n935501; Noticiero Venevision: http://www.noticierovenevision.net/internacionales/2016/julio/4/161618=uruguay-asegura-que-la-entrega-de-la-presidencia-pro-tempore-a-venezuela-esta-apegada-al-caracter-juridico)

 

OAS Legal Counsel says “the Democratic Charter is already being applied” to Venezuela

Jean Michel Arrighi, Chief Legal Counsel to the Organization of American States, says the Hemispheric Democratic Charter is being applied to Venezuela from the very moment Secretary General Luis Almagro rendered his report on June 23^rd. Arrighi also says Article 20 of the Charter empowers the Secretary General to act “when the constitutional order is altered so as to seriously upset the democratic order”, and he would be remiss in offering assistance if he didn’t. The Maduro regime argues that when there is a legitimate government in a nation, the Secretary General has no right to act, but Arrighi says that Article 20 is intended for the case in which there is in fact a legitimate government and that is why it involves diplomatic efforts. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/30/responsable-juridico-de-la-oea-la-carta-democratica-ya-se-esta-aplicando/)

 

International Socialist organization advocates recall referendum in Venezuela this year

Member parties of the International Socialist organization have issued a communiqué voicing their concern over Venezuela’s state of affairs and made an appeal for “a real and effective dialogue between the Venezuelan government and opposition.” They also recommend holding the recall referendum this very year, and express support for an OAS statement in support of the initiative of former presidents José Luis Rodríguez Zapatero of Spain, Leonel Fernández of the Dominican Republic, and Martín Torrijos of Panama. (El Universal, http://www.eluniversal.com/noticias/daily-news/socialist-international-advocates-recall-referendum-venezuela-this-year_317711)

 

Zapatero discusses dialogue efforts in Venezuela with the European Union

Federica Mogherini, the European Union’s High Commissioner for Foreign Affairs, met with Spain’s former President José Luis Rodríguez Zapatero, to discuss the Union’s support of efforts for a “dialogue in Venezuela”. Zapatero says the dialogue he is trying to promote is “a long, hard and difficult process”, and that their efforts are in an exploratory phase. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/internacionales/2016/junio/30/161232=zapatero-aborda-con-la-union-europea-apoyo-al-dialogo-en-venezuela)

 

Ramos cautions that Supreme Tribunal plots sentence nullifying recall referendum

Henry Ramos Allup, President of the National Assembly, is expecting a Supreme Tribunal (TSJ) sentence which would nullify recall referendum proceedings to date, and order a new collection of 1% signatures for a petition to begin the process. He says the decision was planned by pro regime legislators and members of the TSJ’s Constitutional Chamber, and would be in the hands of Justice Luis Damiani Bustillos; he adds that the National Elections Council would then call for regional elections, to vote for governors. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/julio/1/161373=ramos-allup-advierte-sobre-sentencia-del-tsj-que-anule-el-proceso-de-rr; El Nacional, http://www.el-nacional.com/politica/PSUV-asoma-TSJ-ordenara-revocatorio_0_875912729.html)

 

Borges says recall referendum is not negotiable

Julio Borges, leader of the majority opposition bloc in the National Assembly says the proposed recall referendum is a Constitutional right of the Venezuelan people and not a subject for discussion in any possible talks with the government. “That is non-negotiable, that does not exist, that is a right that is moving forward and no one can stop it, if the government wants to talk about how to reform the economy, about respect toward the National Assembly, about how to free political prisoners, about how to reenergize productivity, those matters are welcome because they are national problems; but there are matters that are not subject to talks, and among them the recall referendum is not been subject for talks or any sort of negotiation”, he says. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/julio/4/161575=borges-aseguro-que-el-rr-no-es-un-tema-de-discuta-en-una-eventual-mesa-de-dialogo-con-el-gobierno)

 

Ramos says military high command backs President, not Constitution.

President Nicolas Maduro has demanded absolute loyalty from Venezuela’s military in order to carry forth Bolivarian ideals and the Chavez legacy. At the same time, National Assembly President Henry Ramos Allup says “the high command of the Armed Forces has chosen to support President Nicolás Maduro over supporting the Constitution”; and adds that dialogue is impossible under such conditions: “Take note: It is impossible to dialogue with a military gun pointing at your head”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/03/nicolas-maduro-exige-la-maxima-lealtad-de-su-fuerza-armada/; Noticieron Venevision: http://www.noticierovenevision.net/politica/2016/julio/3/161469=ramos-allup-destaco-que-la-fanb-apoya-a-maduro-antes-que-respaldar-la-constitucion)

 

US accuses Venezuela of complicity in human trafficking

The United States has again included Venezuela, along with Haiti and Belize, on the list of countries that are not making enough efforts to combat people trafficking. US President Barack Obama now has 90 days to decide if sanctions will be imposed on the nations on the “black list”. Those sanctions could include freezing non-humanitarian and non-commercial aid or denying the countries loans from multilateral institutions. Venezuela was included on the blacklist in 2014 and remains there after appearing for several previous editions in “special observation,” the next-lowest category where Cuba is. “The Venezuelan government does not fully comply with minimum standards for the elimination of (human) trafficking and is not making significant efforts to do it so,” the report reads. (Today Venezuela: http://todayvenezuela.com/2016/07/04/us-accuses-venezuela-of-complicity-in-human-trafficking/); and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/eeuu-acusa-venezuela-complicidad-con-trafico-personas_317309)

 

Curfew imposed on Delta Amacuro state due to food riots

Delta Amacuro state governor Lizeta Hernández issued a 24-hour curfew after food riots led to 146 arrests in the state’s capital, Tucupita, in far Eastern Venezuela, bordering Guyana. (Noticieron Venevision: http://www.noticierovenevision.net/nacionales/2016/julio/1/161308=decretan-toque-de-queda-en-delta-amacuro-debido-a-hechos-irregulares-en-tucupita)

 

 

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.