June 20, 2019

International Trade

Venezuela received a new shipment of humanitarian technical assistance

On Monday, June 17th, the second shipment of Humanitarian Technical Assistance arrived, with 24 tons of medicines and medical supplies, as part of the cooperation between the Maduro regime and the Federation of Red Cross and Red Crescent Societies. Maduro’s Health Minister, Carlos Alvarado, said that with this shipment increases to 48 tons received through the Federation, totaling 569 tons of medicines and medical surgical equipment. (AVN, http://www.avn.info.ve/node/474357)

 

Oil & Energy

CHEVRON could finally be forced to leave Venezuela

CHEVRON's nearly century-long relationship with Venezuela might not survive the Maduro regime's fight with the United States. Not only is Venezuela's infrastructure crumbling, but the national oil company has been sanctioned by the Trump administration. CHEVRON, the last major US oil company still operating in Venezuela, could be forced to leave unless US officials extend sanctions waivers scheduled to expire on July 27. A CHEVRON exit would follow on the heels of other major American companies that have retreated from the chaos in Venezuela in recent years. A loss of CHEVRON's expertise and resources would only make matters worse for Venezuela's oil industry, which is already on the brink of collapse under Nicolas Maduro. And it could trigger losses for CHEVRON in a major market it's spent decades sinking time, money and sweat into. CHEVRON currently has five onshore and offshore production projects in Venezuela with PDVSA, the national oil company. CHEVRON even established its Latin American headquarters in Caracas. In January, US President Donald Trump imposed tough sanctions on PDVSA in a bid to push out Maduro. Those sanctions prohibited American companies from doing business with PDVSA. However, the US Treasury Department granted six-month waivers to CHEVRON and five oil services companies: HALLIBURTON, SCHLUMBERGER, BAKER HUGHES and WEATHERFORD International. Those waivers, set to expire on July 27, allow the companies to conduct transactions and activities with PDVSA. If the waivers lapse and US sanctions remain in place, analysts said that CHEVRON would need to suspend its joint ventures with PDVSA. CHEVRON said that "future events" could cause the environment in Venezuela to become "more challenged," leading to "increased business disruption and volatility" in financial results. Today, CHEVRON owns a 39% stake in a joint venture with PDVSA that produced 16,000 barrels per day of oil in the Boscan Field, which is in the state of Zulia. CHEVRON also owns stakes in three other onshore production joint ventures, two of which operate in Venezuela's Orinoco Belt. If the sanctions waivers aren't renewed and CHEVRON Leaves, the hope is that the company would be able to resume its operations once relations between the United States and Venezuela improve. However, analysts warn that would be no easy task. Venezuela's energy infrastructure is falling apart -- and a pause in activity would only worsen it. (CNN: https://www.cnn.com/2019/06/19/business/chevron-venezuela-oil-sanctions/index.html)

 

Russia squeezing embattled Maduro for tax-free gas expansion

Russia’s state-controlled oil giant, ROSNEFT PJSC, is extracting concessions from crisis-ridden Venezuela to enter the offshore natural gas market on the cheap, a potential headache for the U.S. and Europe. An accord signed by both Russia and Venezuela earlier this month will give ROSNEFT tax breaks to produce and export gas from the Patao and Mejillones fields off Venezuela’s east coast. The document, which also includes a “fair market price” in the event of an expropriation, makes changes to a bilateral agreement reached in 2009, according to a filing by the Russian government. The deal underscores how Russia is both propping up and gaining from the Nicolas Maduro regime at a time when the U.S. is sanctioning Maduro and China has cut its support. Venezuelan gas could eventually offer Russia new entry points into both Asia and Europe. As a result of the changes signed by Russian President Vladimir Putin, ROSNEFT and its suppliers will be exempt from value added and import taxes to develop the two gas fields, which are near to where EXXON MOBIL Corp. is rushing to extract oil in neighboring Guyana. The agreement was filed online by the Russian legal information website, which publishes orders by the president and applied international treaties. ROSNEFT is also considering entering another natural gas block, known as Deltana 5, that’s much closer to a border that’s been hotly contested.  ROSNEFT would have two options to export the gas. It could build a liquefied natural gas plant in Venezuela, or it could pipe the gas to Trinidad where there are LNG trains with spare capacity. (Bloomberg: https://finance.yahoo.com/news/russia-squeezing-embattled-venezuela-tax-040001813.html)

 

U.S. seeks info from ad-hoc CITGO board named by Venezuela's Guaidó

An ad-hoc board of directors for U.S. oil refiner CITGO, named by Venezuelan interim president Juan Guaidó, said on Wednesday it has received a request for information from U.S. officials, who are probing its parent company PDVSA for alleged corruption. "Recently, the U.S. Department of Justice ... has also requested information from CITGO," the board said on its Twitter account. "CITGO has communicated to the Department of Justice its complete disposition to cooperate to clear up presumed irregular actions or corruption." The CITGO board added that it was conducting an internal investigation into "the company's actions in the recent past." (The New York Times: https://www.nytimes.com/reuters/2019/06/19/world/americas/19reuters-venezuela-politics-citgo.html)

 

No end in sight, families of CITGO executives jailed in Venezuela push for answers

It's been 570 days, say family members, who worry about the men's health and insist they're innocent as they worry their situation has been forgotten. Carlos Añez, 34, says he was upset when his stepfather, a Citgo executive, was called for a last-minute meeting in Venezuela the weekend before Thanksgiving 2017. Once in the conference room at the PDVSA headquarters in Caracas, armed and masked security agents arrested the men — five American citizens and one U.S. resident. Later that day, Maduro’s chief prosecutor, Tarek William Saab, announced at a news conference that the executives had been detained on charges stemming from a deal to refinance CITGO’s debt. Saab accused them of signing off on a deal to refinance the company's debt with terms unfavorable to Venezuela and offering CITGO as collateral. The alleged agreement was with the investment fund Apollo Global Management and Dubai-based Frontier, a firm that was working to source deals for Apollo. But a deal was never signed. About seven weeks after Apollo declined a deal, the executives were arrested. Maduro called them “corrupt thieving traitors” and said they should go to the worst prison. The detained include former Citgo President Jose Pereira and five former company vice presidents: Jorge Toledo, Tomeu Vadell, Gustavo Cardenas, Jose Luis Zambrano, and Alirio Zambrano. After more than a year-and-a-half in detention, the six Americans finally had a preliminary hearing. The judge ordered they stand for trial, after they declared their innocence. No date was set. Some of the families say they are concerned that CITGO and the State Department may not be doing enough to secure the release of the executives. A State Department spokesperson said it is gravely concerned about the welfare and safety of these and other U.S. prisoners in Venezuela and are closely monitoring the cases. (NBC: https://www.nbcnews.com/news/latino/no-relief-sight-families-citgo-executives-jailed-venezuela-seek-answers-n1018071)

 

Canadian crude Gulf Coast exports rise as Venezuelan gap is filled

Heavy crudes have poured into the United States this spring, offsetting the loss of Venezuelan oil and producing a mini surplus, with Canadian heavy crude this month being exported from the U.S. Gulf Coast. U.S. refiners have lined up larger supplies from Canada, Iraq and Colombia since Washington in January began choking off the flow of dollars to Venezuela’s socialist government by barring transactions with PDVSA, Venezuela’s state oil company and once among the top three providers of heavy crude to U.S. refiners. The United States went from importing 561,000 barrels per day (bpd) of Venezuelan oil in January to zero barrels in May. This month, more than 130,000 bpd of heavy Canadian crude is scheduled to depart from Texas, four times the average exported in 2018, trade sources said. (Reuters, https://www.reuters.com/article/us-usa-crude-exports/canadian-crude-gulf-coast-exports-rise-as-venezuelan-gap-is-filled-trade-sources-idUSKCN1TJ2AC)

 

Economy & Finance

Is Maduro trafficking Nazi gold stolen from Holocaust victims?

The Simon Wiesenthal Center is looking into whether Venezuelan dictator Nicolás Maduro has been trafficking Nazi gold that includes ingots made from fillings taken from Jews murdered in the Holocaust. The Center said in a statement on Wednesday that it’s studying information exposed by the Wall Street Journal indicating that Maduro has managed to hold onto his regime through selling some 73.3 tons of gold valued at US$ 3 billion, to Middle East and Turkish companies between 2017 and February 2019. In March, it was reported that a further 7.4 tons of gold ingots, valued at US$ 300 million, were sent in two flights of a Russian aircraft from Caracas to Entebbe, for "refining" and sent on to a Middle Eastern country. “Despite the African Gold Refinery claims that the final destination was Dubai, via Turkey, if the final destination was a ‘Muslim country,’ possibly to Iran as end-user to fund terror, Maduro may be the agent of a historic irony: Gold stolen from Jews in the Shoah to finance another genocidal intent, this time against the Jewish State,” the Center stated. "We urge a full investigation into the activities of African Gold Refinery and its management’s reportedly nefarious role in the theft of the Venezuelan people’s property, the dubious origin of its gold transport and involvement in a possible Holocaust travesty,” it added. (The Jerusalem Post: https://www.jpost.com/Diaspora/Is-Veneeulas-Maduro-trafficking-Nazi-gold-stolen-from-Holocaust-victims-593042)

 

Midtown’s Tower Fifth gets pushback from Venezuelan leader

Real estate tycoon Harry Macklowe’s proposed Midtown Manhattan skyscraper, dubbed Tower Fifth, is now likely to get skinnier — thanks to US sanctions against the Venezuelan regime. After the Post reported Wednesday that Macklowe’s Tower Fifth skyscraper will be built partially in a space where the Venezuelan consulate now stands on East 51st Street, the Venezuelan Ambassador to the US tweeted out the story with some harsh words to Nicolas Maduro. “None of [Venezuela’s] assets are for sale in the US,” Ambassador Carlos Vecchio tweeted with a link to The Post story. “Maduro regime attempted to sell VZ consulate in NY, one of the usurper’s criminal acts that we stopped to protect assets of the nation,” said Vecchio, who was appointed by Juan Guaidó, who the US recognizes as the interim president of the country. (New York Post: https://nypost.com/2019/06/19/midtowns-tower-fifth-gets-pushback-from-venezuelan-leader/)

 

Politics and International Affairs

UN human rights chief Michelle Bachelet arrives in controversial Venezuela visit

UN human rights chief Michelle Bachelet arrived in Venezuela on Wednesday for a three-day visit where she is expected to hold separate talks with both Nicolas Maduro and interim president Juan Guaidó. She is also expected to speak to civil society leaders and "victims of human rights violence and abuses", the UN rights office said. Her visit, at the invitation of the government, comes in advance of a UN Human Rights Council three-week session.  Bachelet will deliver a statement at the end of her visit on June 21, and she is also expected to submit a report to the UN Human Rights Council in the next month. In recent months, the rights chief has been critical of Maduro's crackdown on opponents. In a report to the UN Human Rights Council in March, Bachelet said Venezuelan security forces, backed by pro-government armed groups, had quashed peaceful protests with excessive use of force, killings and torture. She has also criticized US sanctions against Maduro's government, cautioning that they are exacerbating the crisis and possibly hurting "people's basic rights and wellbeing". Some analysts believe her visit will reflect positively for Maduro. "With this visit the UN Commissioner, indirectly, recognizes the legitimacy of the government of Nicolas Maduro," said Luis Vicente from DATANALISIS, a think-tank in Venezuela. The fact that her three-day trip is even taking place is also seen as something of a minor triumph for rights activists. Bachelet’s predecessor, Zeid Ra’ad al-Hussein, was repeatedly denied access to the country for criticizing what he said was the government’s refusal to recognize a humanitarian crisis. In contrast, Maduro appears to be rolling out the red carpet for Bachelet, who survived jail and exile during Chile’s military dictatorship. On the eve of her arrival, the government freed 21 opposition activists considered political prisoners, including a substitute lawmaker and 18 people detained during recent anti-government protests. Previously, Maduro began allowing the Red Cross to deliver humanitarian aid. But several politicians close to Guaidó who have been arrested in recent weeks remain behind bars, including his chief of staff Roberto Marrero and National Assembly Vice President Edgar Zambrano.  In addition to meeting with Maduro, Bachelet will meet with socialist party boss Diosdado Cabello, as well as the Supreme Court head and attorney general. She also plans to see victims of human rights violations and their relatives, the U.N. agency said. Notably absent from a draft agenda are visits to detention centers such as the Helicoide prison, where many of the nearly 700 activists considered to be political prisoners by the opposition are being held. José Miguel Vivanco, Americas director for Human Rights Watch, urged Bachelet to insist on receiving access to a prison and the JM de los Rios Children’s Hospital in Caracas, which doctors describe as a waiting room for sick and dying children. He warned Bachelet’s visit will be a disappointment if she just meets with officials, opposition leaders and civil society representatives. “She can do that via Skype from Geneva,” he said. “She’s there to represent the victims. The litmus test is whether she can gain access to a prison of her choice, inspect conditions and meet in private with political prisoners. That’s the only thing that will give purpose to this trip.”  Supporters of Guaidó, however, have called for protests out of fear Bachelet will get a highly curated, unrealistic view of the crisis.  However, Geoff Ramsey, a Venezuela researcher at the human rights group Washington Office on Latin America (WOLA), said the visit would still be worthwhile, telling AP: "Any progress we see of releasing political prisoners or efforts to organize new elections I don't think are going to be providing oxygen to Maduro. This could be a galvanizing moment for the opposition at a time when they badly need it." (Al Jazeera: https://www.aljazeera.com/news/2019/06/rights-chief-bachelet-heads-venezuela-day-visit-190619061657764.html; Newsweek: https://www.newsweek.com/maduro-trump-venezuela-Guaidó-1444914; France 24: https://www.france24.com/en/20190620-venezuela-united-nations-bachelet-human-rights-chief-first-visit-crisis)

 

NSC denies Washington Post report that Trump is losing patience and interest on Venezuela

According to The Washington Post, President Donald Trump is losing interest in Venezuela after a bid to oust Nicolas Maduro by US backed opposition figures in April failed. An official told the Post that Trump had always thought of Venezuela as "low-hanging fruit" on which he "could get a win and tout it as a major foreign policy victory." "Five or six months later.... it's not coming together," the official said. Two senior White House officials told The Post that the president "chewed out the staff"  - national security adviser John Bolton and Latin America policy director Mauricio Claver-Carone - after the failure on April 30 to shift Maduro from power because they "got played" both by US-backed opposition leader Juan Guaidó, and Maduro regime figures - who claimed to have supported ousting Maduro. The time, the White House had been assured that key figures in the security forces and government were ready to switch their allegiance, The Washington Post reported. The issue has largely fallen off Trump's Twitter feed, with the president last mentioning Venezuela on June 4, when he claimed Russian forces had withdrawn from the country. However, the report was rejected by National Security Council spokesman Garrett Marquis who described the official's claims as, "patently false." "The United States never said that its effort in Venezuela would be limited to one round. The administration's maximum-pressure policy relies upon consistency and discipline to achieve the ultimate goal," another senior official told the paper. (Business Insider: https://www.businessinsider.com/trump-bored-of-venezuela-as-maduro-clings-to-power-report-2019-6; https://www.washingtonpost.com/; Newsweek: https://www.newsweek.com/maduro-trump-venezuela-Guaidó-1444914)

 

Pence thanks Latin America for generosity in supporting Venezuela’s freedom

Vice President Mike Pence renewed on Tuesday the “firm” commitment of the Donald Trump administration to Venezuela’s “legitimate” president, Juan Guaidó, and the Venezuelan people and thanked other Latin American countries for their “generosity” in helping defend the cause of freedom in Venezuela. The US government stands “with our neighbors ... We will continue to stand strong until freedom, democracy and the rule of law are restored” in Venezuela, Pence said on a visit to the US Navy hospital ship USNS Comfort at the Port of Miami, a vessel which on Wednesday will set sail on an 11-country tour of the Caribbean, Central and South America, the ship’s second visit to the region in the past six months. Pence said he was happy to visit Miami “for the departure of the USNS Comfort, bringing the compassion of the American people to those suffering here in our hemisphere and around the world.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2480035&CategoryId=10717)

 

Colombian armed groups recruiting desperate Venezuelans, army says

Venezuela’s crisis is spilling across the border into Colombia as Marxist rebels and right-wing paramilitaries recruit migrants to strengthen their ranks, according to five Colombian military commanders.  Violence still simmers in Colombia despite a 2016 peace deal with leftist FARC rebels, meant to end five decades of conflict. Dissident FARC fighters, the rebel National Liberation Army (ELN), right-wing paramilitaries and drug-trafficking gangs are battling each other and the military. Keen for recruits, these armed groups are targeting Venezuelans as they traverse the porous 2,219-km (1,380-mile) frontier at illegal border crossings, according to the military officials, human rights officials and migrants themselves. Five military commanders told Reuters that as many as 30% of insurgents in Colombia’s eastern border region are Venezuelans, willing to take up arms in return for food and pay. Nationwide, an estimated 10% of fighters are Venezuelan, the commanders said. Their estimates were based on information from informants, deserters, captured rebels and residents.  Reuters was not able independently to confirm the information provided by the commanders or speak directly to any Venezuelans who had been recruited by an armed group. Several Venezuelan migrants told Reuters they had been approached by armed groups for recruitment on entering Colombia. A FARC dissident, who asked not to be identified, told Reuters the group was also present on Venezuelan soil and was recruiting Venezuelans. Colombia’s right-wing paramilitary groups, which battled the ELN and FARC for decades, are also recruiting migrants, the military officials said. (Reuters: https://www.reuters.com/article/us-venezuela-politics-colombia-exclusive/exclusive-colombian-armed-groups-recruiting-desperate-venezuelans-army-says-idUSKCN1TL14E)

 

After loss at sea, Venezuelan archbishop calls for trafficking probe

A top Vatican official in Venezuela has called on authorities to investigate a rise in human trafficking after an apparent smuggling operation gone wrong left more than a dozen people missing. Archbishop Roberto Luckert in an open letter published on Facebook on Tuesday said the sinking of a boat carrying Venezuelan migrants to Trinidad and Tobago in April showed the dire consequences of trafficking. The letter urged authorities “to investigate, follow, prosecute and convict those responsible for the crimes of human trafficking.” It was signed by Luckert and another clergyman. Thirty-seven passengers were on board the boat which left Venezuela and sank on April 23. Rescuers found nine survivors and one body, and the other migrants remain unaccounted for. It was unclear whether the passengers left Venezuela voluntarily or were forced as part of a trafficking operation, as the Archbishop’s letter suggested. (Reuters: https://www.reuters.com/article/us-venezuela-trafficking-archbishop/after-loss-at-sea-venezuelan-archbishop-calls-for-trafficking-probe-idUSKCN1TK392)

 

OP-ED: Can negotiation actually break the stalemate in Venezuela? by Felix Seijas

The announcement of negotiations in Oslo between Nicolás Maduro’s government and the Venezuelan opposition took most of the country by surprise. Though the basis for the talks was built quietly over several months, their beginning marked a new phase in the country’s political conflict. Exploratory talks began just two weeks after the April 30 uprising, indicating that the opposition had already been testing the possibility of negotiations while pursuing its preferred path of a dramatic rupture within the government. With those talks underway, Guaidó now faces two fundamental problems. The first is that he must deal with currents within the opposition that do not want a negotiated exit for Maduro. Pressure from international actors, especially the Lima Group and the European Union, which have been consistent in calls for a peaceful resolution to the conflict, may help in this regard. A second, related problem is how to sell the benefits of dialogue to a skeptical public that remembers the fruitless attempts at negotiation with Maduro in Caracas in 2016 and the Dominican Republic in 2018. But despite the risks, the circumstances today are very different. Maduro is likely to still feel that he’s holding most of the cards, but time is not on his side as it once was. Thus, the possibility of success in Oslo, while perhaps slim, should not be discounted. The challenge lies in convincing those with the weapons that clinging to their trenches will cost them more in the long run than reaching an agreement and exiting the stage. To do this, it is essential to continue to increase pressure on Maduro, and Guaidó should concentrate his efforts on three goals: keeping the opposition coalition as unified as possible, keeping the public mobilized, and coordinating with international allies to continue to create effective mechanisms to pressure the regime. If any of these fails, the goals at Oslo may well be unattainable.  The Trump administration does not have a seat at the table in Oslo, but it is difficult to imagine that anything is happening without its full knowledge and consent. Diosdado Cabello is another player to keep an eye on. If Cabello were to get backing from Cuba, it could lead to consequential changes in the balance of power within chavismo. If talks are successful, the most likely outcome will be a call for new elections with safeguards to ensure a fair result. The two sides, for now, are far from such an agreement, and the odds of success at this point do not seem high. But for Venezuela, it is well worth the attempt.  - Seijas is a Venezuelan political analyst and statistician, Ph.D. He is the director of the Delphos poll. (Americas Quarterly: https://www.americasquarterly.org/content/can-negotiation-actually-break-stalemate-venezuela)

 

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.