Oil &
Energy
Venezuela warns of retaliation
for Colombia gas suspension
Venezuelan Energy Minister Rafael Ramirez said
the suspension of gas from Colombia could affect the supplies that Venezuela
sends to that country in the future. “Colombia
suspended its gas and not for anything that happened here, so what I say with
all respect to Colombians is that if they continue to do this, we’re not
sending them any gas when it’s our turn,” said Ramirez when asked about the
cut in supplies announced by Colombian authorities. Colombia’s Energy Minister
Amylkar Acosta announced in April the suspension of gas to Venezuela to protect
the domestic power supply against the expected effects of the El Niño
phenomenon. Ramirez said that Venezuela is increasing its own gas production
and that it respects Colombia’s decision. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2311965&CategoryId=10717)
PDVSA’s production in 2013 was down 27% from
1997, according to
the CEPAL’s most recent report. Investments in the oil sector rose 5% last
year. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39556&idc=2)
Paraguaná Refining Center is operating at 62%
capacity after a
series of accidents and “scheduled”
stops in the refinery, according to an internal report seen by Reuters this
Thursday. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39555&idc=4)
Venezuelan oil price trends
up
Venezuela's weekly oil basket stayed below the
country's desired U$D 100 a barrel floor but continued rising for the third
consecutive week, driven by positive economic results in the US and China and
geopolitical tensions in Ukraine and Libya. According to figures from the
Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by
Petroleos de Venezuela S.A. (PDVSA) during the week ending May 30 was U$D 98.31,
up U$D 0.21 from the previous week's U$D 98.10. (Latin American Herald Tribune,
http://www.laht.com/article.asp?ArticleId=2316376&CategoryId=10717)
El Salvador joins
PETROCARIBE
Ramiro Vásquez, a
member of the political team in charge of ALBA Oil in El Salvador says "the first decision of the new government is
to incorporate El Salvador" into PETROCARIBE and it will be "a very important step toward deeper
relations within our continent". More in Spanish: (PDVSA, http://www.pdvsa.com/)
Economy
& Finance
Venezuela says it will
release U$D 2.1 billion in FOREX to companies, including airlines
Venezuela says it will begin releasing U$D
2.1 billion in hard currency to companies that have struggled to obtain
greenbacks through currency controls. Officials say some U$D 1.2 billion will
go to small and medium-sized businesses in the food, health, chemicals and
heavy industry sectors- Economic Affairs Vice President Rafael
Ramirez said U$D 930 million more will be disbursed to larger companies,
including U$D 486 million to airlines. (Reuters, http://www.reuters.com/article/2014/05/30/venezuela-economy-idUSL1N0OG1JV20140530;
More in Spanish: PDVSA, http://www.pdvsa.com/; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-inicia-liquidacion-de-divisas-pendientes-.aspx)
Informal employment creation
was 65% in one year
The National Statistics Institute (INE) reports
65% of all new jobs created in 2013 were in the informal sector, which is at a disadvantage
in the area of labor stability, special benefits, wage increases, private
health insurance, savings bank, and other benefits. (El Universal, http://www.eluniversal.com/economia/140602/informal-employment-hits-65-of-the-economy-in-one-year)
Food basket price up
69.1% in one year
Sustained increases in the price of food are
reflected in a survey by the Center for Documentation and Social Analysis (CENDA).
By March the minimum wage (U$D 519.1) could afford only 45% of the basic food
basket, which went up 13% in the first quarter. The price variation in one year
was 69.1%. (El Universal, http://www.eluniversal.com/economia/140602/food-basket-price-up-691-in-one-year)
Possible US sanctions would not hit oil or the
economy
US Representative Joaquín Castro, one of the
proponents in the bill recently passed in the US House of Representatives that
aims to sanction those who violate human rights in Venezuela says: "sanctions recently approved do not touch
upon the oil sector or any other part of the Venezuelan economy". More
in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/posibles-sanciones-de-eeuu-a-venezuela-no-abarcari.aspx#ixzz33TiU8Q6u)
Venezuela off the radar screen for foreign
investment
A report on foreign
investment by the UN Economic Commission for Latin America and the Caribbean
(ECLAC) shows that out of U$D 129.890 billion foreign investment inflows into
the region in 2013, Venezuela received a mere 4%. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140603/el-pais-esta-fuera-del-radar-de-la-inversion-extranjera)
Venezuela against the
wall, a special financial presentation by Russ Dallen, of the Latin America Herald
Tribune. The initial slides show a drastic drop in reserves from U$D 40 billion
to U$D 20 billion, even as the major component gold rose, rising 60% inflation,
falling currency, and a 60% scarcity index. It shows declining US oil imports
and increasing US domestic oil production (Slides 7-9) as well as the fall in
Venezuela's oil exports to the US, Venezuela's dropping oil production and who
actually pays for Venezuela's oil (US, China and India) and how much money that
is in real terms. Venezuela's oil sales may net around U$D 50 billion depending
on actual production, yet imports alone were U$D 59 billion, though they are
crashing rapidly as widespread shortages show. While Venezuela's production in
the east and west of the country has been falling, their Orinoco production is
growing rapidly, as the billions invested by serious international oil
companies like Chevron, ENI, REPSOL, ROSNEFT, CNPC, & ONGC (not to mention
the expropriated billion dollar investments by ConocoPhillips and ExxonMobil)
continue to ramp up production.
Venezuela has virtually finished its own pipeline to bring oil from the
infrastructure poor Orinoco area to its giant Jose Refinery and Terminal
Complex on the Caribbean this week. The 154 mile pipeline can carry 750,000 BPD,
though there are other bottlenecks and infrastructure is needed. Slide 15 and
16 show just why Venezuela, with the world's largest oil reserves, has lower
production than the US, Canada and Mexico -- crashing foreign direct investment,
which actually went negative in 2009 and is the lowest as a percentage of GDP
in the hemisphere, save for Ecuador.
Slide 17 shows Venezuela's cost to borrow in international markets is
also the highest in the region. Slide 18 shows new car sales in Venezuela,
which fell 87% in the last year to just 817 new cars in February, whereas in
2007, new car sales were over 25,000 a month. See the slide presentation at: (Center for Security Policy: http://www.centerforsecuritypolicy.org/wp-content/uploads/2014/05/Russ-Dallen-)
Politics
Jailed activist awaits
judge's ruling
A local court is holding a hearing to determine
whether opposition leader Leopoldo Lopez will be freed or must wait in jail
while facing charges of inciting violence and arson during anti-government
protests. The closed-door proceedings at the Caracas courthouse are to resume today,
after a 10-hour session yesterday. Lopez spearheaded protests in February
seeking to pressure President Nicolas Maduro into resigning. (The New York
Times: http://www.nytimes.com/aponline/2014/06/02/world/americas/ap-lt-venezuela-jailed-activist.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%2006%2003%2014&_r=0)
OAS Secretary General says effective solution
to Venezuelan crisis is "difficult"
OAS Secretary General José Miguel Insulza says
an end to the conflict in Venezuela requires concessions "on both sides" and urged them to
dialogue "without prejudices".
He adds that "it is difficult to
expect a quick and effective solution" due to "enormous division and polarization".
The OAS' general secretary referred to the lack of progress in the Venezuelan
government-opposition talks, which are in theory "intended to be about
listening and putting prejudice aside." (El Universal, http://www.eluniversal.com/nacional-y-politica/140602/oas-compromise-by-both-parties-required-to-solve-conflict)
U$D 18 billion sent to
Cuba over three years
Cuban economy did not crash in the last decade simply
because of support from Venezuela. In only the last three years, U$D 18 billion
have been transferred in form of loans, investments or grants. (El
Universal, http://www.eluniversal.com/nacional-y-politica/140602/usd-18-billion-heading-for-cuba-in-three-year-term)
Guyana seeks maritime
boundary demarcation with Venezuela
Guyanese Minister of Foreign Affairs, Carolyn
Rodrigues-Birkett, is seeking to resume negotiations with Venezuela over their
shared sea borders. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/guyana-reclama-delimitar-frontera-maritima-con-ven.aspx#ixzz33TgBWKjJ)
'Chavista' school books stoke passions in Venezuela
Venezuela's government has published dozens of
new textbooks that glorify late president Hugo Chavez and belittle his
adversaries, infuriating opposition critics who call them part of a campaign to
indoctrinate school children. Originally introduced in mid-2011, the textbooks
have become a hot-button issue again amid a broad state-run review of the
education system that some fear could boost the ruling Socialist Party's
imprint on classrooms. "The government
has made great efforts to redefine historic events with an ideological bent,
and these books represent that intention," said Juan Maragall,
education secretary in the opposition-run state of Miranda. "Teachers are concerned." The
government has distributed 42 million copies that were originally going to be
obligatory, but officials backed away from that after furious opposition to the
idea. Still, they are widely used because they are free, reaching an estimated
6 million kids at 80% of the country's schools. (Reuters, http://www.reuters.com/article/2014/06/02/venezuela-education-idUSL1N0OG1CY20140602)
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.
