September 24, 2013

Economics & Finance

Maduro announces a new U$D 5 billion credit from China

President Nicolas Maduro met with China's President Xi Jinping over the weekend in Beijing and said that China had granted Venezuela another $5 billion credit line -- and all was announced by twitter. "In the meeting we approved projects and resources for the development of energy, housing, agriculture, transportation, among others," he tweeted. Official sources report Venezuela already had 365 cooperation agreements with China in areas including energy, oil, education, health, technology, trade, construction, agro-industry and agriculture, infrastructure, industry, culture and sport, among others. The agreements signed during the trip bring the total to 400. Oil Minister Rafael Ramirez says is supplying China with 626,000 barrels per day of oil, and expects exports to China will reach 1 million barrels per day within 2 years. This is up from 49,000 BPD in 2005. Venezuelan officials, including Foreign Minister Jaua claim oil shipments have helped pay back some U$D 20 billion out of the U$D 46.5 billion that China loaned Venezuela between 2005 and 2012. Maduro also used twitter to announce an agreement between Venezuela and Chinese oil company SINOPEC for the production of 200,000 BPD of crude oil in the Junin 1 oil block in the Orinoco Belt. "In the energy field, we agreed with Sinopec an investment of U$D 14 billion in the block Junin 1 of oil in the Orinoco Belt, for the production of 200,000 barrels per day," Maduro wrote. The U$D 5 billion is basically a credit that will be invested in the country, through a credit from the China Development Bank (BDC) for the financing of strategic projects in the field of health, science road, transport, technology, industry, electricity and mining. The China Development Bank will establish an office in Caracas to oversee the loans. Projects announced include:

• U$D 391 for construction of a maritime terminal for Pequiven (petrochemical company), through The Export-Import Bank (Eximbank) of China, in order to export Urea and ammonia.

• Develoment of the Las Cristinas gold mine project.

• CITIC construction group to build 4,500 homes in the states of Nueva Esparta and Anzoategui.

• SINOHYDRO to rehabilitate the Las Majaguas irrigation system in Portuguesa state and for road connection in the East-West Kempis - Santa Lucía road in Miranda State.

• BEIDAHUANG, a leader in China's agricultural industry in China, agreed to plant 60,000 hectares of corn, rice and soybean in Guarico, Barinas, Apure, Delta Amacuro and Portuguesa.

• YUTONG BUS will sell Venezuela 2,000 vehicles for public transportation, and a bus production joint venture for exports to the surrounding region. (Latin American Herald Tribune; http://www.laht.com/article.asp?ArticleId=1030596&CategoryId=10717; Veneconomy, 09-23-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=36414&idc=3; AVN, 09-23-2013; http://www.avn.info.ve/contenido/venezuela039s-economic-development-dream-be-actualize-end-decade; El Universal, http://www.eluniversal.com/nacional-y-politica/130923/maduro-relations-with-china-are-modern-and-advantageous; Fox News, http://www.foxnews.com/world/2013/09/22/venezuela-receives-5-bn-credit-line-from-china/; http://www.foxnews.com/world/2013/09/22/venezuelan-president-signs-agreements-with-his-chinese-counterpart-on-trip-to/; The Washington Post, http://www.washingtonpost.com/business/venezuelan-president-signs-agreements-with-his-chinese-counterpart-on-trip-to-beijing/2013/09/22/765e7b3a-2381-11e3-9372-92606241ae9c_story.html)

Expected FOREX tender postponed indefinitely

Although authorities had announced a new FOREX to be held last week, the event did not take place. Some sources indicate a decision on FOREX will be taken once the party of officials that went to China with President Maduro return to Venezuela. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/sectores-de-la-economia-se-quedan-a-la-espera-de-n.aspx#ixzz2fnwZYBi8)

Central Bank is considering trading gold to increase disposable reserves

The Central Bank has started to consider options to increase disposable reserves available for imports and debt service. One option would be to use gold bullion deposited abroad - worth U$D 2.6 billion - in exchange for credit. Disposable reserves closed at U$D 1.3 billion in August, a record low point, at a time foreign debt service has tripled since 2012, imports remain high and oil exports remain stagnant due to lower production and discount sales to allied nations. More in Spanish: (El Universal, http://www.eluniversal.com/economia/130924/bcv-analiza-entregar-oro-como-garantia-para-subir-las-reservas)

Inflation could close at 45-48% by the end of the year, according to economist José Guerra. Production is “stagnant” and “incapable” of growing up to capacity, according to the economist who says that added to that, there is “an out of control inflation and a noticeable shortage of products,” that according to the figures from the Central Bank is at “an alarming 20.2%.” (Veneconomy, 09-23-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=36416&idc=2)

Venezuelan stock market up 252%

Venezuela’s stock market rose 3% during the week ending September 20th with the Caracas Stock Index closing at 1,660,974, a new all time high. The leading gainers were the shares of Mercantil Servicios Financieros A and B, both closing at Bs. 500 for a gain of 7.8% and 7.3% respectively. MANPA rose 4.2% at Bs. 12.5, before its toilet paper plant was taken over by the government on Saturday; Banco Provincial gained 3.8% to close at Bs. 500. Nationalized phone company CANTV lost 3.1% at Bs. 46. All other stocks were flat or did not trade. The Venezuela Stock Market is now up 252.32% for the year to date in bolivar terms, though only 140.48% in official rate dollar terms because of February devaluation, still making it the best performing stock market in the world. (Latin American Herald Tribune, 09-23-2013; http://www.laht.com/article.asp?ArticleId=1032160&CategoryId=10717)

Commodities

OVL mulls raising stake in U$D 20 billion Venezuela oil project

ONGC Videsh Ltd and its partners are mulling raising stake in Venezuela's U$D 20 billion Carabobo-I oil project even as India looks at raising crude oil imports from the Latin American country. OVL, which has 11% stake in the project that will produce 400,000 barrels per day of oil (20 million tons) in four years, is looking at buying a similar stake that Malaysia's PETRONAS has decided to give up in the project. On the other hand, Reliance Industries Ltd, which gets about 20% of its oil needs from Venezuela, is looking at raising imports while state-run firms like Indian Oil Corp (IOC) and HPCL-Mittal Energy Limited (HMEL) are keen to start buying oil from the Latin American nation. "Indian companies' representatives will visit Venezuela on October 7 and 8 and have some concrete proposals worked out," Oil Minister M Veerappa Moily told reporters after meeting Oil Minister Rafael Ramirez. (Economic Times, http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/ovl-mulls-raising-stake-in-20-billion-venezuela-oil-project/articleshow/22992242.cms)

PDVSA said to lose U$D 111 billion due to lower production

Oil and gas expansion projects have failed to strike targets set for production by official plans, and Venezuela's share in the global oil market is now narrower. The program to expand production called for a U$D 77.3 billion investment, including U$D 54 billion furnished by PDVSA. (El Universal, 09-23-2013;http://www.eluniversal.com/economia/130923/pdvsa-said-to-lose-usd-111-billion-out-of-less-production)

Most offshore gas production slated for 2017

PDVSA estimates that the bulk of production from Rafael Urdaneta and Mariscal Sucre projects will be achieved as of 2017. The oil giant has calculated gas production in Dragón at 252 million cubic feet per day (mcfd) by 2014, and this will be the only unit starting early production. (El Universal, 09-23-2013; http://www.eluniversal.com/economia/130923/most-offshore-gas-production-expected-in-2017)

Tariff hike will cut Venezuela's income from methanol sales

Exports from Petróleos de Venezuela (Pdvsa) to the European Union, particularly methanol, will be altered in 2014 upon the entry into force of a tariff increase. The decision not only will impact PDVSA but also threatens the domestic market. Until 2010, Venezuela was listed among countries with tariff preferences at a 0% level for exports to Europe, under the Generalized System of Preferences (GSP). This year Venezuela was included in the list of nations that pay a 2% tariff. However, by 2014, Venezuela will pay the full rate at 5.5%. PEQUIVEN and its joint ventures sell Europe some 700,000 tons of methanol a year, for about U$D 252 million. (El Universal, 09-23-2013; http://www.eluniversal.com/economia/130923/tariff-hike-cuts-venezuelas-income-from-methanol-sale)

SIDOR paralyzed for six days due to strike

The SIDOR steel combine has been at a standstill for six days due to spontaneous labor protests. More in Spanish: (El Universal, http://www.eluniversal.com/economia/130924/sidor-acumula-seis-dias-de-paralizacion-por-protesta-laboral)

Toilet paper factory occupied by government officials

The Venezuelan Government has "intervened" into the nation's major paper manufacturer, MANPA, in order to verify production, distribution and sales of toilet paper. No details were given on what the company might have done wrong. MANPA is the nation's best know manufacturer of toilet paper, sanitary towels and disposable diapers. Karin Granadillo, head of the Consumer Protection Agency says, "the team responsible for temporary occupation can take all decisions necessary, even taking over the direction of production, distribution and sales up to 15 days since the date the company was notified". The Maduro regime has been blaming the private sector for scarcities, while business says difficult access to FOREX needed for buying supplies is to blame. More in Spanish: (INFOLATAM and

AVN, http://www.avn.info.ve/contenido/revisan-estructura-producci%C3%B3n-distribuci%C3%B3n-y-comercializaci%C3%B3n-manpa)

Politics

Independent municipal candidates will be expelled from the United Socialist Party

The pro government United Socialist Party (PSUV) has set forth its official candidates for the upcoming December 8th municipal elections, and the party's Vice President, Diosdado Cabello, has announced that all pro-government candidates running outside the party list will be expelled from the organization. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/130924/sacan-del-psuv-a-los-que-se-lanzaron-solos-para-el-8d)

U$D 270 million worth of cocaine found on Air France flight

There was something odd about the 30 suitcases that showed up on a flight from Venezuela. The colorful bags weren't registered to any of the passengers on the plane. When French officials opened them up, they discovered why -- 1.3 tons of pure cocaine was stuffed inside the anonymous bags. The street value of the stash? About 200 million Euros, or UD$ 270 million. The catch was made on September 11, but French authorities didn't publicize the find until Saturday. (CNN, 09-23-2013; http://edition.cnn.com/2013/09/22/world/europe/air-france-cocaine-found/index.html?iref=allsearch)


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.

February 19, 2013

Economics & Finance

Public Stock Exchange considered as alternate FOREX supply

Unofficial economic sources report the government is considering the use of the Public Stock Exchange as a substitute for the now defunct FOREX Denominated Transaction System (SITME), and say the decision came after the new supreme FOREX authority analyzed the Exchange Authority´s (CADIVI) ability to manage increased demand. Although no decision has been made, an internal memo describes conditions for a new market. Nelson Merentes, Central Bank President has recently admitted that the exchange market is in an altered state and that authorities will not remain inactive in this situation. More in Spanish: (El Nacional, 02-19-2013; http://www.el-nacional.com/  and El Mundo, http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Merentes--BCV-enfrentara-las-perturbaciones-del-me.aspx)

Income surplus for 2012 was VEB 57 billion in unused funding, deposited in parallel special funds operated by the National Treasury and now available to the government for further spending plans. The amount is the result of differences between authorized budget items and actual disbursements. More in Spanish: (El Universal, 02-19-2013; http://www.eluniversal.com/economia/130219/excedentes-de-2012-del-gobierno-suman-bs-57-millardos)

PDVSA accounting benefits from devaluation

José Luis Saboin, senior analyst at ECOANALÍTICA, points out that "all recent economic decisions favor PDVSA"; and César Aristimuño, of Aristimuño Herrera & Associates adds: "one of the key beneficiaries from devaluation is PDVSA as it improves the government's income in local currency, and partly reduces its' local currency indebtedness". PDVSA's indebtedness with the Central Bank is now down 31.7% as a result of devaluation; and it's dollar indebtedness has been reduced from U$D 38.4 billion to U$D 26.2 billion. PDVSA's financial debt is lower by U$D 1.9 billion on Bolivar denominated loans financed by the Central Bank. As a result, PDVSA should provide the government an additional VEB 84.5 in taxes and royalties. More in Spanish: (El Nacional, 02-19-2013; http://www.el-nacional.com/)

Commodities

PDVSA is a big lie, says Gustavo Coronel

According to senior oil analyst Gustavo Coronel: PDVSA claims to be sending to China an average of 34% more oil than the China say they are receiving. Sometimes, like in 2009, the differences have been as high as 72% less oil sent to China than PDVSA claims. This is a lie among the many lies coming out of PDVSA on a daily basis. They lie about their proven reserves, about their level of oil production, about the number of drilling rigs active in the country, about the production of natural gas, about the price they obtain for their oil, about the level of exports, about the refinery runs, about their imports of gasoline and diesel, about their contracts, about their many non-oil related activities such as house building, food imports or pig raising. The company under Rafael Ramirez is an immense lie. As such it has lost all international credibility. PDVSA bonds are no longer accepted by many brokers, due to the shaky financial situation of the company and the nation. (Las Armas del Coronel, 02-13-2013; http://lasarmasdecoronel.blogspot.com/2013/02/pdvsa-is-big-lie-pdvsa-es-una-gran.html)

International Trade

Soto Rojas denies mining contract with CITIC violates sovereignty

Fernando Soto-Rojas, chairman of the National Assembly's Committee on Energy and Petroleum, defended the contract between the Government and China's CITIC Group granting the latter Venezuela's gold, diamonds, coltan, tin, iron and bauxite deposits. "They have experience in that area. Nowadays, with technology, we can determine the presence of gold thousands of meters deep. Who knows what Guayana has 5000 meters underground? Here in Venezuela we only were able to evaluate 500 meters. " More in Spanish: (El Nacional, 02-18-2013; http://www.el-nacional.com/)

Politics

Chavez makes surprise return from Cuba

President Hugo Chavez made a surprise return from Cuba on Monday, more than two months after surgery for cancer that has jeopardized his 14-year rule. The middle-of-the-night homecoming by Chavez, 58, implies some medical improvement - at least enough to handle a flight of several hours - and will again fire up supporters with hope he could return to active rule. Yet there was no new information on the socialist leader's condition, nor images of his arrival, and aides say his condition remains "complex." Chavez could be returning to govern behind the scenes or could be hoping to ease political tensions in Venezuela and smooth a transition to Vice President Nicolas Maduro. (Reuters, 02-18-2013; http://www.reuters.com/article/2013/02/18/us-venezula-chavez-idUSBRE91H05F20130218; AVN, http://www.avn.info.ve/contenido/president-chavez-venezuela; Bloomberg, http://www.bloomberg.com/news/2013-02-18/chavez-says-he-s-back-in-venezuela-after-cuba-treatment.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=687857&CategoryId=10717; The Washington Post, http://www.washingtonpost.com/world/the_americas/hugo-chavez-returns-home-to-venezuela-after-more-than-2-months-of-cancer-treatment-in-cuba/2013/02/18/812b30a6-79b0-11e2-9c27-fdd594ea6286_story.html; CNN, http://edition.cnn.com/2013/02/18/world/americas/venezuela-chavez-return/index.html?iref=allsearch; Fox News, http://www.foxnews.com/world/2013/02/18/hugo-chavez-returns-home-to-venezuela-after-more-than-2-months-cancer-treatment/)

Opposition leader Capriles welcomes Chávez back in Venezuela

Opposition leader Henrique Capriles welcomed President Hugo Chávez, and said he hoped that Chávez's return brings "common sense" to his government. (El Universal, 02-18-2013; http://www.eluniversal.com/nacional-y-politica/130218/opposition-leader-capriles-welcomes-chavez-back-in-venezuela)

Students chained to Cuban embassy end protest

Emyly Vera, a spokesperson for the university students who demonstrated near the Cuban Embassy to Caracas for five days, announced the end of the protest after the Government reported the return of President Hugo Chávez.

"We asked for his return. We said that if he was able to rule, he had to do it in his own country and not abroad," she added. Vera pointed out that although the demonstration is over, "the battle is not." (El Universal, 02-18-2013; http://www.eluniversal.com/nacional-y-politica/130218/students-chained-to-cuban-embassy-end-protest-in-venezuela)

US says elections should be called if Chavez cannot rule

Unidentified US government sources are saying "if he (Chavez) cannot carry out the duties of his office, the Constitution calls for the election of a new President". The source, who asked not to be identified, added "we note his return and repeat our best wishes on his illness". More in Spanish: (El Nacional, 02-19-2013; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/130219/eeuu-plantea-elecciones-si-chavez-no-puede-gobernar)

Government party says swearing in will take place when he is "good and well"

The ruling party is not saying when or where Hugo Chavez will be sworn in as President for the 2013-19 terms. Anzoátegui Governor Aristóbulo Istúriz avoided recent questions on the matter, said the party has not discussed it, and simply said swearing in will take place whenever Chavez is "good and well". More in Spanish: (El Nacional, 02-19-2013; http://www.el-nacional.com/)

Venezuela targets better relation with the US, but no rush

Foreign Minister Elías Jaua says Venezuela seeks "good relations" with the United States and ratified that President Hugo Chávez's Government has been taking steps to improve US-Venezuela bilateral relations. However, he stressed that Venezuela is by no means "desperate" to reach said goal. "We look forward to having good relations with the US, but we are by no means desperate to do so. We have learned and demonstrated that it is possible to live with dignity without having a US ambassador in Venezuela," the foreign minister stated. (El Universal, 02-19-2013; http://www.eluniversal.com/nacional-y-politica/130218/venezuela-targets-better-relation-with-the-us-without-rush)

Fidel Castro applauds President Chávez's return to Venezuela

Former Cuban leader Fidel Castro applauded Chávez's come back after more than two months in hospital in Havana, saying: "I am very pleased that you have been able to get back to the piece of land of the Americas that you love so much, and to that fraternal people, who has given you so much support. A long and distressing wait, your amazing physical resilience and the total dedication of the medical team (...) were necessary to obtain such a goal". (El Universal, 02-18-2013; http://www.eluniversal.com/nacional-y-politica/130218/fidel-castro-welcomes-president-hugo-chavezs-return-to-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.

September 25th, 2012

Economics & Finance

MORGAN STANLEY: Venezuela risks default if Chavez wins

Venezuela could default on its debt as early as the second half of 2013 if President Hugo Chavez wins re-election next month and fails to shore up the oil-producing nation's "increasingly fragile" balance sheet, Morgan Stanley said in a report by Charlie Devereux published by Bloomberg. One "tipping point" could be the U$D 4.3 billion in external debt payments that come due between August and November 2013, Morgan Stanley analyst Daniel Volberg wrote in a note to clients. (El Universal, 09-22-2012; http://www.eluniversal.com/economia/120922/venezuela-risks-default-if-chavez-wins-morgan-stanley-says)

ConocoPhillips confirms that an international arbitration court ruled PDVSA must pay a U$D 66.8 million compensation for oil production cuts between 2006 and 2007. The International Trade Chamber Court, located in Paris, concluded PDVSA “violated” the agreements of the Petrozuata project in which ConocoPhillips participated “when it applied the project OPEC production cuts.” PDVSA has announced that it plans to appeal the ruling. (Veneconomy, 09-22-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32185&idc=4; and more in Spanish: El Universal; http://www.eluniversal.com/economia/120925/pdvsa-presentara-alegatos-antes-de-efectuar-pago-a-conoco; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-presentara-nuevos-argumentos-antes-de-pagar-.aspx)

Finance Ministry has used up 84% of planned debt for 2012

Although the price of crude oil remains above U$D 100 and petroleum industry flows remain high, the government continued to acquire debt in order to raise cash for the elections. Finance and Planning Ministry data shows that by 21 September bonds had been issued for VEB 79.4 billion, which is 84% of planned credit operations for the year, which are pegged at VEB 94.5 billion. More in Spanish: (El Universal, 09-25-2012; http://www.eluniversal.com/economia/120925/finanzas-ya-coloco-84-de-la-deuda-prevista-para-2012)

Venezuela has the most controlled banking system in the Andean Region

A recent FITCH report shows that the local banking system faces an "uphill" battle to improve efficiency in a difficult environment It reveals that efficiency rates for Venezuelan banks are poor as compared to the rest of the region due to "high inflation and intense regulation and intervention" on the part of government. More in Spanish:  (Tal Cual, 09-25-2012; http://www.talcualdigital.com/index.html)

15% inflation projected in 2013 budget

As the government analyzes macroeconomic premises for the 2013 budget, it appears the exchange rate will remain unchanged for next year, according to a report being prepared for the national budget, according to sources within the Planning and Finance Ministry. The same sources report the rate of inflation projected is 15%, far below that used for 2012, which was 20-22%. More in Spanish: (El Mundo, 09-25-2012; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/presupuesto-de-2013-preve-15--de-inflacion.aspx)

Hugo Chavez’s record: A gusher of oil money in Venezuela, and some ask where it’s gone

Nearly 14 years after President Hugo Chavez took office, and despite the biggest oil bonanza in Venezuela’s history, there’s little outward sign of the nearly one trillion petrodollars that have flowed into the country. The populist president has used the oil wealth to buttress his support through cash handouts, state-run grocery stores and a gamut of other social programs. With more money in the economy, incomes are higher and the number of people living in poverty has fallen. Yet some experts say Chavez could have done much more to improve the country’s infrastructure, boost its economy and invest in the very oil industry that keeps Venezuela afloat.  Venezuela now ranks among the most violent and corrupt places on earth. (The Washington Post, 09-25-2012; http://www.washingtonpost.com/business/hugo-chavezs-record-a-gusher-of-oil-money-in-venezuela-and-some-ask-where-its-gone/2012/09/22/c332fe5e-04c9-11e2-9132-f2750cd65f97_story.html)

Commodities

Amuay refinery not fully back after one month, explosion cause still a mystery.

Thirty days after the explosion at the Amuay refinery which killed 42 people, and damaged nine crude oil storage tanks and adjacent facilities and housing, causes for the accident have not been divulged, nor has refining activity recovered fully at the Paraguana Refining Complex, the second largest in the world. Labor leader Wills Rangel, president of the United Oil Workers Federation estimates recovery at 80%, but Yvan Freites, Secretary General of the United Oil Workers of Falcón State, which operates the refinery at Cardon says three key units remain paralyzed and adds that "the plant will not be ready this year". Freites presumes there is no gasoline being processed at Amuay or it is being produced with components imported by PDVSA. Authorities have yet to provide information on the real causes for the explosion, and reinsurance firms are on the ground evaluating the situation. PDVSA President Rafael Ramírez has announced the damaged refinery currently processed 330.000 barrels per day of crude oil, which is 51% of what it refined prior to the explosion. (El Universal, 09-25-2012; http://www.eluniversal.com/economia/120925/a-un-mes-de-la-tragedia-amuay-no-recupera-su-plena-capacidad; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/disminucion-en--almacenaje-obliga-a-pdvsa-a-reprog.aspx)

UBS: PDVSA must issue more bonds to meet debt

According to Swiss bank USB if PDVSA really wants to raise crude oil production it will need another bond issue to meet accumulated debt before the year is up. More in Spanish: (El Nacional, 09-25-2012; http://www.el-nacional.com/)

Venezuela’s export barrel dropped U$D 2.31 to average U$D 102.76/bbl. this week, mostly due to a greater than expected increase of crude inventories in the United States, according to the Venezuelan Oil and Mining Ministry. The average for September is U$D 103.96/bbl. and the average for the year-to-date is U$D 105.30/bbl. after posting an average of U$D 101.06/bbl. in 2011. (Veneconomy, 09-22-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32182&idc=4)

“In the 90’s PDVSA had one of the best lightning rod systems in the world,” former PDVSA Refining manager Javier Larrañaga told El Nacional. He explained he was surprised at fire at El Palito Refinery. PDVSA admitted the lightning rod systems at the El Palito Refinery cannot withstand high discharges despite the fact that the north of Carabobo state is considered as one of the regions in the country with the most lighting discharges. (Veneconomy, 09-22-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32178&idc=4)

China backs giant Venezuela goldmine

Chinese and Venezuelan officials have signed an agreement to jointly develop one of the world's biggest gold mines, the Las Cristinas asset near a town bearing the name of the mythical golden city of El Dorado. The agreement to develop the Las Cristinas gold mine was signed by officials of the Venezuelan Government and Chinese company China International Trust and Investment Corp (CITIC) at the weekend. It comes as a blow to Western mining companies that had eyed the massive deposit, such as Canada's Crystallex International Corp, which has appealed to the World Bank arbitration body for U$D 3.7 billion in compensation after its development permit was cancelled. The Las Cristinas ore body, in southern Bolivar state, is estimated to contain 17 million ounces of gold. (The West Australian, 09-24-2012; http://au.news.yahoo.com/thewest/business/a/-/world/14939199/china-backs-giant-venezuela-goldmine/;  AVN, 09-22-2012; http://www.avn.info.ve/contenido/venezuela-and-china-sign-agreements-mining-projects; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=32181&idc=3)

International Trade

Trade from Colombia to Venezuela up to U$D 1.5 billion

Exports from Colombia to Venezuela reached U$D 1.5 billion, according to Colombia's National Statistics Department (DANE). This represents an overall trade growth of 65.4% compared with the same period last year, when exports were U$D 907 million. The figures were far from favorable to Venezuela as it sold only U$D 403 million to Colombia during the first seven months of this year. (El Universal, 09-22-2012; http://www.eluniversal.com/economia/120922/trade-from-colombia-to-venezuela-amounts-to-usd-15-billion)

Politics

DATANALISIS: Capriles edges toward Chavez as vote nears

Opposition candidate Henrique Capriles edged closer to President Hugo Chavez in a recent DATANALISIS poll, according to two sources that have seen the poll. The recent poll shows support for Capriles, growing in the waning days of the campaign as he continues campaigning across the country. The survey showed Capriles with 37.2% of the vote compared with 47.3% for Chavez, closer than the 12.5% difference registered in their last survey. The poll, which had a margin of error of 2.4 percent, was conducted between August 25 and September 5, the sources said. This leaves 15.5% undecided. DATANALISIS did not immediately respond to requests for confirmation of the details, and another well-known pollster, CONSULTORES 21, has the candidate’s neck-and-neck. (REUTERS, 09-24-2012;  http://www.reuters.com/article/2012/09/24/us-venezuela-election-idUSBRE88N11F20120924)

Key PSUV leader says if Chavez loses he will concede

Aristóbulo Istúriz, vice president of the pro government United Socialist Party promises to control extremists and in exchange asks that Capriles do the same with "nuts" in the opposition. He said: "If Chavez loses, he will concede, as he did with state governments, mayoralties and congressional elections"; and added "We must abandon triumphalism and turn polls into votes. Zero smugness. In order to guarantee peace and harmony on October 8 we need to win with a broad margin. The problem is not to win but rather the advantage in favor. Victory must be decisive to avoid destabilization". (El Nacional, 09-25-2012; http://www.el-nacional.com/)

UNASUR confirms Venezuela's electoral system is reliable

The heads of both campaigns and authorities at Venezuela's National Electoral Council (CNE) all confirm that country's electoral system is reliable, the Union of South American Nations (UNASUR) said in a statement released Sunday. "None of the spokespeople questioned the system's technological strength," says the communique issued from Quito by regional bloc. (AVN, 09-23-2012; http://www.avn.info.ve/contenido/unasur-confirms-venezuela039s-electoral-system-reliable; El Universal, http://www.eluniversal.com/nacional-y-politica/120920/unasur-not-to-supervise-venezuelan-presidential-election)

"Ghetto Chavez" and the battle for Venezuela's youth vote

In Venezuela's biggest slum, a graffiti artist stencils a painting of President Hugo Chavez dunking a basketball.

Another has him rapping to hip-hop music, and another doing a wheelie on a motorcycle. "Chavez el mio" ("My Chavez") reads a slogan on one of the series of striking campaign images ahead of the October 7 election.

It is a new look for the 58-year-old president, who is seeking another six-year term in a tight race despite undergoing cancer surgery three times since June 2011. (Reuters, 09-23-2012; http://www.reuters.com/article/2012/09/23/us-venezuela-election-ghetto-idUSBRE88M01F20120923)