December 20th, 2011

Economics & Finance

International reserves drop 4.4% in 2011

Although oil prices have risen 40% to an average U$D 100.87, there is no growth in currency availability at the Central Bank for exchange needs and foreign debt payments. International reserves have dropped by 4.4% during 2011, and on December 15 were pegged at U$D 28.198 billion. More in Spanish: (El Universal, 12-20-2011; http://www.eluniversal.com/economia/111220/reservas-internacionales-acumulan-caida-de-44)

55% of debt held abroad

Official figures from the Ministry of Finance and Planning show that July-September 2011 total central government public debt was up to U$D 78.598 billion dollars, which is an increase of 8,68%, over June this year. More in Spanish: (El Mundo, 12-20-2011; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/55--de-la-deuda-se-encuentra-en-manos-de-acreedore.aspx)

Private sector wage purchasing power remains stagnant

The private sector has begun to recover after two years of recession, but worker purchasing power, after subtracting the effect of inflation, on average recorded only a small improvement of 1.4%, during 3Q 2011 as compared to 3Q 2010, according to Central Bank figures. Jose Guerra, director of the School of Economics, Central University of Venezuela, believes that "the private sector comes from a long recession; this means that companies sell less and in a context of high inflation is very difficult to improve the wages in real terms." (El Universal, 12-19-2011; http://www.eluniversal.com/economia/111219/se-estanca-capacidad-de-compra-del-salario-en-el-sector-privado)

Bank Superintendency approves Caroni, Guayana merger

The Banking Superintendency approved the merger of Banco Caroni C.A. and Banco Guayana, according to a resolution published in today’s Official Gazette. Banco Caroni’s assets now represent 1.7% of the total in Venezuela’s banking system, making it the country’s 10th largest bank, according to data on the Superintendency’s website. (Bloomberg, 12-16-2011; http://www.bloomberg.com/news/2011-12-16/venezuela-s-bank-superintendency-approves-caroni-guayana-merger.html)

Commodities

Coal processing plant expropriated 

The Government has ordered the expropriation of the Grafitos Del Orinoco carbón products industrial processing plant in the Industrial Area of Matanza, at Puerto Ordaz in Bolivar state. The plant processes such products as anthracite and liquid graphite. More in Spanish: (El Nacional, 12-20-2011; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/economia/111220/gobierno-decreta-expropiacion-de-grafitos-del-orinoco)

Venezuela mortgages its oil to China for U$D 30 billion

China increased its claim on Venezuela's oil production this week with an additional U$D 4 billion in loans, bringing to U$D 30 billion the total owed by the nation, which is secured by future Venezuelan oil production. To repay the debt, Venezuela now sends about 410,000 barrels of crude a day to China, or half the average 806,000 barrels per day that Venezuela sent to U.S. refineries in September, the last month for which Department of Energy figures are available. The country's average production is 2.3 million to 2.4 million barrels per day. Planning and Finance Minister Jorge Giordani said this week that China does not get a discount on the oil it receives. If true, that means Venezuela is receiving the loans without paying any financing costs or interest rates. Apart from the loans, China has signed deals totaling U$D 40 billion to invest in energy projects through 2016, including an oil production and refining project called Junin in the oil-rich Orinoco Belt in eastern Venezuela. (Los Angeles Times, 12-16-2011; http://latimesblogs.latimes.com/world_now/2011/12/china-venezuela-loan-oil.html)

Venezuelan oil slips to U$D 104.39

Venezuela's weekly oil basket slipped to U$D 104.39 as oil prices fell in international markets as hopes dimmed for a rapid resolution of the debt crisis rocking Europe and world markets. According to figures released by the Venezuela Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending December 16 fell to U$D 104.39 from the previous week's U$D 107.47. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=452806&CategoryId=10717)

Rusoro may turn to arbitration to resolve Venezuela gold mining dispute

Rusoro Mining Ltd. (RML) said it may file a claim against Venezuela in an international arbitration court if negotiations to resolve the nationalization of its assets aren’t resolved within six months. Rusoro, a Vancouver-based gold mining company, said a 90- day period to form a joint venture with the government following the nationalization of the gold industry in September has expired. The company hasn’t been told about the status of the venture or any possible compensation. (Bloomberg, 12-17-2011; http://www.bloomberg.com/news/2011-12-17/rusoro-may-turn-to-arbitration-to-resolve-venezuela-gold-mining-dispute.html)

Ferrominera Orinoco closes year producing 17 million tons of iron ore, still beneath break even

According to union sources, Ferrominera Orinoco will close this year producing 17 million tons of iron ore. This is an increase of almost 2 million tons above last year but still below break even, which requires producing over 20 million tons. More in Spanish: (El Mundo, 12-20-2011; http://www.elmundo.com.ve/noticias/economia/industrias/ferrominera-orinoco-cierra-produccion-en-17-millon.aspx)

International Trade

Chávez visits Uruguay to push for Venezuela´s entry toe MERCOSUR

President Chavez says he feels well enough to attend the MERCOSUR summit meeting in Uruguay, where the Foreign Ministers of Argentina, Brasil, Paraguay and Uruguay seek ways to circumvent a veto by Paraguay’s Congress on Venezuela’s admission into MERCOSUR due to compliance issues with the group´s democracy requirements. Before departing for Montevideo, Chavez said increased trade within South America is key to meeting the challenges of the global financial crisis. More in Spanish: (Últimas Noticias, 12-20-2011; http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/chavez-viaja-para-puyar-ingreso-en-el-mercosur.aspx); El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/111220/mercosur-busca-formulas-para-acoger-a-venezuela) and Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/chávez-propone-aumentar-mercado-suramericano-para-enfrentar-crisis-económica-mundial)

Trade rules with Colombia remain undefined

An inside source that withheld its identity says that despite an agreement signed by the Presidents of both nations at the close of November, specific customs rules remain undefined. Meetings last week “were not very fluid” and no agreement was reached on several instances. Colombia wants no tariff on products involved in bilateral trade from 2006 to 2010, while Venezuela expects preferential tariffs to be applied to 90% of products exchanged during the same period. More in  Spanish:  (El Universal, 12-20-2011; http://www.eluniversal.com/economia/111220/sin-definir-las-normas-comerciales-con-colombia)

Subsidized food ends up in Colombia as contraband

Products subsidized by the Venezuelan Government and sold at controlled prices through MERCAL and PDVAL goes to Colombia border towns "in large trucks at late hours and it is not known which authorities allow this”. Venezuelan made powdered milk, corn oil, and precooked flour are sold in their original packaging and at prices up to six times greater than in Venezuela. Currency exchange rates favor Colombia, making the deal even more lucrative. More in Spanish:  (El Nacional, 12-20-2011; http://www.el-nacional.com/)

Venezuela receives another 60 tons of textiles from Bolivia

A second shipment of 60 tons of textiles from Bolivia, arrived in Venezuela last week. Huáscar Ajata, Bolivia's Vice Minister of Trade and Exports, reported that the shipment includes more than 100,000 units of clothing and 30% of it was prepaid by Venezuela. The rest of the shipment (70%) remains to be paid, Bolivian media reported. (El Universal, 12-19-2011; http://www.eluniversal.com/economia/111219/venezuela-receives-another-60-tons-of-textiles-from-bolivia)

Trade with Ecuador grew 20%

Trade between Venezuela and Ecuador grew by U$D 300 million this year, compared to 2010, says Ecuador's ambassador to Caracas, Ramon Torres. The increase is due to the development of new forms of trade in place after Venezuela withdrew from the Andean Community (CAN), says Minister of Commerce, Edmee Betancourt. Bilateral trade in 2010 was U$D 1.5 billion. (Últimas Noticias, 12-19-2011; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/intercambio-economico-con-ecuador-crecio-20-.aspx)

Venezuela and Cuba sign 47 cooperative agreements for 2012

Oil and Mining Minister Rafael Ramirez reports that both nations signed 47 agreements for cooperation during 2012, fo a total of U$D 1.6 billion. Agreements were reached for joint programs on education, agriculture, transport, trade, culture, environment sport, health and electricity. More in Spanish: (AVN, 12-20-2011; http://www.avn.info.ve/contenido/venezuela-y-cuba-suscribieron-47-acuerdos-cooperación-para-año-2012)

Politics

Obama: "Venezuela ties to Iran and Cuba have not served its interests", Chavez calls him a “total fraud”

The US Head of State answered in written form to a questionnaire forwarded by El Universal daily in Caracas. President Obama highlighted that his government is worried to see undermined public powers in Venezuela and the ties of the Venezuelan government to Iran. He also advocated more cooperation between the United States and Venezuela. "In Venezuela, we have been deeply concerned to see action taken to erode the separation of powers." "I look forward to the day when our governments can work more closely". Obama’s replies drew immediate sharp rebukes from both Chavez – who called the US President a “total fraud” - and his supporters, demanding he “mind his own business” and leave Venezuela alone. (El Universal, 12-29-2011; http://www.eluniversal.com/nacional-y-politica/111219/venezuelan-govts-ties-to-iran-and-cuba-have-not-served-its-interests; Reuters, 12-19-2011; http://www.reuters.com/article/2011/12/19/us-venezuela-usa-obama-idUSTRE7BI14H20111219; The Washington Post, http://www.washingtonpost.com/world/americas/obama-criticizes-venezuelas-rights-record-ties-to-iran-and-cuba-in-remarks-to-newspaper/2011/12/19/gIQAyF5Y4O_story.html; More in Spanish: AVN; http://www.avn.info.ve/contenido/chávez-“obama-es-fraude-total; El Universal, http://www.eluniversal.com/nacional-y-politica/111220/chavez-insta-al-presidente-estadounidense-a-dejarnos-tranquilos)

Chavez rolls back seizures as shortages hurt re-election bid

President Chavez is enlisting Mexico’s Gruma SAB, French retailer Casino and other international companies to boost supplies of milk, corn flour and cement as shortages threaten to dent his bid for re-election in 2012. He is rolling back policies that have allowed him to expand control over the economy. He is forging alliances with corporations he previously accused of price-gouging.  He now says: “In the past, socialist models that nationalized everything were forced to later ease their policies.” “We’re moving towards a flexible model, our historic creation.” Colombia-based Forsa SA, which produces aluminum molding for construction, has agreed to a joint venture to produce materials for housing projects. Healso invited Cemex SAB to re-invest in the country after paying the Monterrey-based company $600 million this month to resolve a three-year dispute over compensation for assets seized in 2008. (Bloomberg, 12-16-2011; http://www.bloomberg.com/news/2011-12-16/chavez-rolls-back-seizures-as-shortages-hurt-bid-for-third-term.html)

Venezuela honors Simon Bolivar with new coffin

President Chavez has unveiled a new coffin containing the remains of 19th Century South American independence hero Simon Bolivar. The mahogany coffin, encrusted with diamonds, pearls and golden stars, was revealed at a ceremony to mark the anniversary of Bolivar's death in 1830. The president claims him as the inspiration for his "Bolivarian" revolution, though some historians say Bolivar would not agree with Mr. Chavez's socialist policies. (BBC, 12-18-2011; http://www.bbc.co.uk/news/world-latin-america-16236105)

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.

June 28th, 2011

Economics & Finance

Venezuelan bonds recover on expectation of policy changes

Bonds of the Republic and of Petróleos de Venezuela rose on speculation that there could be another bond issue in the absence of President Hugo Chávez and possible policy changes, even a government with different economic strategies. The price of the oil securities rose 1% to 2%, while the Republic rose between 2.5% and 3%. It is considered unusually positive for paper to increase value by more than 1% in one day. Unofficially it was learned that the Global 2027 could increase to 17 points. More information in Spanish. (El Nacional; 06-28-2011; http://www.el-nacional.com/www/site/p_contenido.php)

CITI says the government can avoid deficit

If Venezuelan oil prices remain above U$D 82.9 and production continues at current levels (2.3 million barrels a day), the Government can avoid a deficit this year, says the latest report Citi Group. For the situation to continue in 2012, the barrel can’t be below U$D 85.3. It adds, the proviso that Executive decisions can impact this outcome as an excessive increase in bond emissions bonds in order to finance current spending-would impact accounts. The firm believes that it is an "external variable to consider," as of production does not increase in 2013 there could be a deficit. More information in Spanish. (El Nacional; 06-28-2011; http://www.el-nacional.com/www/site/p_contenido.php)

Debt issues may not be imminent

The ECOANALÍTICA economic consultant firm believes that new bond issues will be offered in 2011, but are not imminent as the Ministry of Planning and Finance does not want to pay a high coupon and prefers to wait for market conditions improve. More information in Spanish. (Tal Cual; 06-28-2011; http://www.talcualdigital.com/index.html)

Power failures and fitful input jeopardize Venezuelan industry

Government statistics showed a surge in the Venezuelan economy for the first quarter of the year. According to data supplied by the Central Bank of Venezuela (BCV), manufacturing recorded one of the most significant growth rates (7.6%). However, members of the Venezuelan Confederation of Industries (CONINDUSTRIA) are cautious and maintain that manufacturing still shows no real signs of recovery, except for specific sectors. Carlos Larrazábal, president of CONINDUSTRIA, says some industries increased their production during the first quarter in order to deplete inventories purchased with the old exchange rate. (El Universal, 06-27-2011; http://english.eluniversal.com/2011/06/27/power-failures-and-fitful-input-jeopardize-venezuelan-industry.shtml)

Venezuela faces unstable food supply

The supply of food in Venezuela is still hit by instability and volatility. According to figures provided by pollster DATANÁLISIS, the shortage rate amounted to 16% two weeks ago; a reduction of numbers shown  in April, when the index stood at 21%. However, the situation cannot ne regarded as a steady decrease. The real issue is that the government is not dealing with the underlying problem with price adjustments and a stimulus to domestic production, but rather trying to offset shortfalls with imports to create the perception that the market is supplied, according to Luis Vicente León, director of polling firm. (El Universal, 06-27-2011; http://english.eluniversal.com/2011/06/27/venezuelas-food-supply-is-characterized-by-volatility.shtml)

Government says it has invested over U$D9.2 million in electricity

The Government of Venezuela has invested over U$D 9.2 million to stabilize the National Electric System, according to Electric Energy minister Ali Rodriguez Araque. He explained that a series of projects in the sector have been developed since 2010, first aimed at solving the electrical crisis caused by the “El Niño” climate phenomenon; as well as unification of 14 electric companies into the National Electric Corporation (CORPOELEC); and the creation of the Electric Energy Ministry. (AVN, 06-27-2011; http://www.avn.info.ve/node/64581)

Commodities

PDVSA's partners are unaware of the extent of windfall tax

According to oil companies the new oil windfall tax or "special tax on windfall and exorbitant oil prices" is unexpected and untimely. Companies face an uncertain scenario about the scope and potential impact of the new tax, which sets 80 to 95% rates, when the barrel of oil exceeds U$D 70. The tax severely hits the cash flow of subsidiaries and minority partners of state-run oil holding Petróleos de Venezuela, and this prevents joint ventures from implementing the "remedial" plans that the Ministry of Energy and Petroleum set at the end of 2010 plans to raise oil output. (El Universal, 06-27-2011; http://english.eluniversal.com/2011/06/27/pdvsas-partners-are-unaware-of-the-extent-of-windfall-tax.shtml)

Chevron sees Orinoco output in 2012, needs funds

Chevron could begin pumping 50,000 barrels per day from Venezuela's huge Orinoco extra heavy crude belt next year but needs investment in the project, an executive said in remarks published on Sunday.

Ali Moshiri, Chevron's president of exploration in Africa and Latin America, added that a move to hike taxes on some windfall oil income in Venezuela could affect the company's future investment decisions in the country, which is South America's biggest oil exporter. The U.S. major has a 34% stake in Orinoco's Carabobo Project 3, which has estimated reserves of 66 billion barrels. Venezuelan state oil company PDVSA holds 60%, while Venezuelan and Japanese companies split the rest. (Reuters, 06-26-2011; http://www.reuters.com/article/2011/06/26/venezuela-chevron-idUSN1E75P01W20110626)

Venezuela is offering Russian TNK-BP 40% of its stake in PetroMonagas

According to Russian daily Kommersant negotiation depends on how the ongoing litigation with ExxonMobil goes and on the share price. (Veneconomy, 06-24-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=26497&idc=4)

Guasare mines produce no coal

No mineral has been extracted for four days at the Paso Diablo mine in Mara Township, operated by the state company Carbones del Guasare. Workers maintain an indefinite sit-down strike, to the failure of the company of their contractual benefits. The stoppage halts production of 11 metric tons of coal per day, reported yesterday employees, who request anonymity. "The strike is total. There are no activities. We're not doing anything at the mine or the port. We are waiting for a decision by the company." (Petroleumworld, 06-23-2011; http://www.petroleumworldve.com/notat11062301.htm)

Politics

With Hugo Chávez hospitalized, Venezuela frets about the future

There is genuine cause for speculation about Chávez's health, if only because the world is getting little more than Twitter messages right now from a leader who is famous for interrupting Venezuelan TV broadcasts so he can talk for hours. But medical experts say it can take a few weeks to recover from abdominal abscesses, and that may well be what Venezuelan Foreign Minister Nicolás Maduro was referring to over the weekend when he said Chávez is "battling for his health." His hospital hiatus in Cuba has raised questions about the condition of his socialist Bolivarian revolution. With problems like high inflation, chronic power outages and a bloody prison riot outside Caracas vexing the oil-rich South American nation, many Venezuelans are fretting about who's in charge of their government. Officials in Caracas sound tongue-tied. Chavistas seem genuinely spooked about their 2012 prospects if Chávez can't run. (Time, 06-27-2011; http://www.time.com/time/world/article/0,8599,2079996,00.html#ixzz1QVdeaWrM)

A Chávez brother threatens armed struggle

Adán Chávez, the president's older brother and governor of the southwestern state of Barinas said during a meeting of the United Socialist Party of Venezuela (PSUV), that while their United Socialist Party prefers to retain power at the ballot box, "we must be aware of the dangers that beset us and that the enemy does not rest. As authentic revolutionaries, we cannot exclude other forms of fighting, including armed struggle." (El Universal, 06-27-2011; http://english.eluniversal.com/2011/06/27/hugo-chavezs-brother-urges-the-psuv-not-to-forget-armed-struggle.shtml)

National Assembly Speaker says Chavez doesn’t have cancer, will return home

Fernando Soto Rojas, the pro-Chavez leader of the National Assembly, says “I would be the first to tell the country” if Chavez had cancer. The lawmaker said that Chavez continues to recover from an operation to remove a pelvic abscess and should return to Venezuela in time to celebrate the 200th anniversary of the nation’s independence from Spain on July 5. (Bloomberg, 06-27-2011; http://www.bloomberg.com/news/2011-06-26/chavez-doesn-t-have-cancer-assembly-leader.html)

Venezuela’s opposition: Chavez’s health following surgery should not be shrouded in secrecy

Opposition leaders accused Hugo Chavez on Sunday of failing to fully inform Venezuelans about his health, saying the president’s condition following surgery in Cuba should not be shrouded in secrecy. Despite assurances from top government officials and close relatives that Chavez is recuperating following surgery more than two weeks ago, the president’s silence and seclusion since the operation have spurred growing speculation about how ill Chavez may be. Opponents say Chavez and his aides should be more straightforward. (The Washington Post, 06-26-2011; http://www.washingtonpost.com/world/americas/health-of-president-chavez-raises-questions-in-venezuela-over-possible-successor/2011/06/25/AGzZZ3kH_story.html)

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.

March 15th, 2011

Economics & Finance

President Chávez defines two types of property: a good one and a bad one

In order to explain his economic views, President Chávez said yesterday that there are two types of property, one that is small, family owned, which is good since it seeks one’s living and “not to enslave” others. And then, there’s the property defended by FEDECÁMARAS and the “right wing” which is “evil” since it seek profits. (Veneconomy, 03-14-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=25232&idc=3)

Polar's CEO Lorenzo Mendoza: "Private sector's role is vital"

During celebrations for the 70^th anniversary of the Venezuelan giant food and beer conglomerate Empresas Polar, its CEO, Lorenzo Mendoza said that "the only way out involves the presence of honest private companies committed to the community." The business leader added that the participation of the private sector is "essential" to solve Venezuela's problems. Empresas Polar employs over 31,000 people, accounts for 3.83% of non-oil tax revenue in Venezuela; contributes with 3.03% of non-oil Gross Domestic Product (GDP) and produces 18 percent of the Venezuelan food basket. (El Universal, 03-14-2011; http://english.eluniversal.com/2011/03/14/polars-ceo-private-sectors-role-is-vital.shtml)

CONINDUSTRIA says import substitution policies have been abandoned over the past12 years

With the nation’s productive capacity impaired, imports have become the lifeline for the Government in order to supply the local market. Far from diminishing purchases abroad, the National Executive looks set to invest oil revenues in the acquisition of foreign products. An order enacted last week exempts authorities and public administration agencies from import formalities for the next twelve months, while noting that it seeks to ensure "timely delivery of goods and merchandise" in areas such as food security, health and housing, the measure applies to "all areas that help raise the welfare of the population." The private sector interprets this decision as a possible Government strategy to delay updating of price controls and avoid possible shortages in essential items. "It is a confirmation that the Government's industrial policy is an import policy," said Ismael Perez Vigil, chief executive of the Venezuelan Confederation of Industries (CONINDUSTRIA). (El Universal, 03-14-2011; http://www.eluniversal.com/2011/03/14/en-12-aos-fracasaron-los-planes-para-sustituir-importaciones.shtml)

Agriculture expert indicates more imports equal more inflation

Increasing oil prices mean greater availability of fiscal resources to finance imports, increase spending and thus boost the economy. However, the increase in oil prices has negative consequences, particularly inflation as the increase in fuel prices is also a factor in the price of other commodities. As the value of crude oil grows, so does the inflation of food and other commodities in the international market. In Venezuela, where 70% of food is imported, imported inflation will add to that already existing in the country. Thus, benefits obtained by the increase in oil prices are offset by the increase in other commodities. "You have to allocate more dollars to buy the same amount of food. The import capacity will be linked to the difference between the rising price of oil and food," said the expert in food and agriculture policies, Carlos Machado Allison. More information in Spanish. (Tal Cual, 03-14-2011; http://www.talcualdigital.com)

Cepal: Inflation in Venezuela could grow to 32.6% in 2011

The economy of Latin America and the Caribbean will grow 4.5% in 2011, a level 4.2% higher than that projected by the end of last year the Economic Commission for Latin America (CEPAL), told Efe executive secretary of the agency, the Mexican Alicia Bárcena. The trend is that in any case in 2011 inflation will be more than one digit with two exceptions, Argentina and Venezuela, the last being "more problematic" and that "closed in 27.2% (2010) and in 2011 it is seen that may have grown to 32.6%." More information in Spanish. (Notitarde, 03-15-2011; http://www.notitarde.com/notitarde/plantillas/nota.aspx?idart=1274997&idcat=9845&tipo=2)

Basic foods prices rose 3.2% in January

The cost of the food basket was VEB 2,616.63 (USD 608.51) in February, a 3.2% surge over January, according to data issued by the Workers' Center for Documentation and Social Analysis. Sinking consumption, bank bankruptcies, and falling production have erased jobs in Venezuela. (El Universal, 03-11-2011; http://english.eluniversal.com/2011/03/11/bad-numbers-in-venezuelan-economy.shtml)

Holguín: "There is no free trade with Venezuela”

The Foreign Minister of Colombia, Maria Angela Holguin, acknowledged that diplomatic relations with Venezuela have improved over the first seven months of government by Juan Manuel Santos, but regretted that trade does not have the same dynamic of years ago, when it reached the US $D 7 billion annually. “In practice there is no free trade. We must be realistic. Creativity characterizes what Colombians have to use under the new scheme. Now the Venezuelan government buys from Colombian industry and calls for new patterns for projected production chains, which many entrepreneurs may be interested in accessing, "the official said in an interview published yesterday in the newspaper El Espectador. More information in Spanish. (Guía, 03-15-2011; http://www.guia.com.ve/noti/73772/holguin-con-venezuela-no-hay-libre-comercio)

Venezuela and China review joint venture project

Venezuela and China are reviewing the possibility of setting a joint venture to produce machineries and equipment for construction, as well as a joint venture of services. Venezuelan President Hugo Chavez said the information during a meeting he held with representatives of the Chinese company XCMG (Xuzhou Construction Machinery Group), at the Miraflores Presidential Palace, Caracas. Chavez said the joint ventures would be placed in Venezuela and aim at fostering the national housing plan. (AVN, 03-14-2011; http://www.avn.info.ve/node/47974)

Government needs another loan from China

Already used U.S. $ 4,000 million loan that gave China the national government, through an agreement on future oil also known as Chinese Fund. That agreement still remains another 16,000 billion dollars available for use by the Venezuelan government. But this is not enough. The president, Hugo Chavez, said it takes more resources and China is still the more affordable alternative. "We are negotiating a new loan to China," said the president yesterday in the Aló Presidente N° 371. More information in Spanish. (El Mundo, 03-14-2011; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=19&Id_Noticia=49796)

Alba Economic Council promotes common area for regional trade

After meeting in Quito, Ecuador, the Economic Council of the Bolivarian Alternative for the Peoples of Our Americas (ALBA) announced that the fundamental challenge for the countries of the region is to promote a common trade area based on the development local economies. The announcement was made by Ecuadorian Undersecretary of negotiations, Jorge Acosta. He also said that the goal of strengthening the trading system, one of the main actions will accelerate the Unified Regional Payments through the common currency, the Sucre. (AVN, 03-13-2011;

http://www.avn.info.ve/node/47858)

Commodities

Venezuelan oil basket hits USD 101.26

The average price of the Venezuelan oil barrel and byproducts exceeded USD 100 this week and ended the week at USD 101.23 per barrel. The armed conflict in Libya continues to push oil prices, according to a report issued by the Venezuelan Ministry of Energy and Petroleum. The average price of the Venezuelan oil stands at USD 88.64 in 2011, well above USD 40 per barrel estimated by the Venezuelan government in the national 2011 budget. Therefore, there is a USD 48.64 surplus per barrel. (El Universal, 03-11-2011; http://english.eluniversal.com/2011/03/11/venezuelan-oil-basket-hits-usd-10126.shtml)

According to Electricity Minister Alí Rodriguez Araque, the Bolivarian Government has multiplied electricity generating capabilities 10 times since 1999.

The Minister claimed the Bolivarian government investment has multiplied nationwide electricity generation and distribution by 10 since 1999. Rodriguez Araque said that during 1989-1998, 373 thermal megawatts (MW) were incorporated into the national grid, whereas from 1999 to 2010 they added 3,229 megawatts for a total of 5,419 MW. "The tenfold multiplication of installed of thermal generation capacity in comparison with the previous 10 years," he stressed. More information in Spanish. (AVN, 03-14-2011; http://www.avn.info.ve/node/47806)

Losses at state-run power utility Cadafe totaled USD 1.02 billion in 2010

CADAFE, the state owned power utility and subsidiary of the National Electric Corporation (CORPOELEC), which serves 80% of Venezuelan’s territory, reported 2010 fiscal year losses amounting to USD 1.02 billion, according to company preliminary financial statements. The amount is an increase of 55.5% over 2009, when CADAFE's losses were USD 558 million. (El Universal, 03-14-2011; http://english.eluniversal.com/2011/03/14/losses-of-state-run-power-utility-cadafe-amount-to-usd-102-billion-in-2010.shtml)

Joint oil venture set up with Cuba and Angola

PDVSA signed a contract for the creation and administration of a joint company with Sonangol Pesquisa & Producao (Angola) and Cubana de Petróleos (CUPET). The head of the Venezuelan Oil Corporation (CVP, in Spanish) Eulogio del Pino said these companies will jointly work with the Migas and Melones oil fields located in Anzoátegui state. (Veneconomy, 03-11-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=25210&idc=4)

Coal mining concession cancelled

The Official Gazette No. 39,630 today published a resolution which terminates the coal concession called "Pastora N° 2" held by Carbones Nueva Naricual, C.A. The company had an area of 500 hectares in the Simón Bolivar municipality in Anzoátegui state. The resolution states that the measure was taken because of breaches of its obligations under the Mining Act. Among the alleged faults is non-compliance with an obligation with the Registration of environmental liabilities and funding second jobs to mitigate existing environmental liabilities. More information in Spanish. (El Mundo, 03-10-2011; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=14401)

Logistics & Transport

President Chávez announces a railroad system for Western Venezuela during his Sunday show broadcast from the South of the Lake region. He said the president of a Chinese railroad company that will support the construction of this transport media is in the country for that purpose. (Veneconomy, 03-14-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=25231&idc=3)

Venezuela and China boost construction of new container terminal in Carabobo

Experts from the China Harbour Engineering Company Limited and Ministry of Popular Power for Transportation and Communications (MTC) and the Bolivarian State Ports (Bolipuertos) visited the area of the bay near Punta Salinas in Puerto Cabello, Carabobo state, where will build a new container terminal. Asian Technical and advance national efforts to define the engineering report, procurement and construction above to work. "Preparations for the construction of this modern container terminal capable of receiving post panamax vessels of up to 70 000 dwt, are given with firm and sure steps," said the president of Bolipuertos, Elsa Gutierrez Graffe. More information in Spanish. (AVN, 03-15-2011; http://www.avn.info.ve/node/48019)

Politics

Chavez charges opposition with seeking a Libya-like uprising in Venezuela

President Hugo Chavez accused his political opponents on Sunday of trying to divide the military as part of a broader plan aimed at spurring a Libya-like uprising in Venezuela following next year's presidential election. Chavez said such a conflict would give Washington a justification to lead a military invasion of Venezuela. "They want to divide the armed forces," said Chavez, referring to Venezuela's opposition. "The Yankee empire, the CIA and the State Department is behind them." (Miami Herald, 03-13-2011; http://www.miamiherald.com/2011/03/13/2113448/chavez-foes-seek-libya-like-uprising.html)

3,114 public protests reported in Venezuela during 2010

The number of street protests reported in Venezuela throughout 2010 was 3,114, a 5.6% decline from 2009, according to a report prepared by NGO Espacio Público (Public Space), and a human rights watchdog group called Venezuelan Program of Education-Action in Human Rights (PROVEA). The two organizations also found that the number of demonstrations that were crushed by Venezuelan authorities decreased, as they barely exceeded one percent of total protests in the past year. (El Universal, 03-14-2011; http://english.eluniversal.com/2011/03/14/a-total-of-3114-protests-reported-in-venezuela-in-2010.shtml)

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.