April 09, 2019

Logistics & Transport

 

US-blacklisted Iranian airline may begin direct flights to Venezuela

A plane belonging to MAHAN Air, a private Iranian airline accused by the West of transporting military equipment to Middle East war zones, landed in Caracas on Monday, and the two countries will discuss launching a direct flight “in the coming months,” Minister Jorge Arreaza told reporters. An Iran Foreign Ministry delegation left Tehran early Monday on a MAHAN Air flight in route to Caracas, Iran’s IRNA news agency reported. The spokesman of Iran's Civil Aviation Organization, Reza Jafarzadeh, told MEHR news agency the delegation included a group representing the private airline that was traveling to Caracas to discuss maintaining regular flights between the two countries. MAHAN Air, established in 1992 as Iran’s first private airline, has the country’s largest fleet of aircraft. But the U.S. blacklisted MAHAN in 2011 after accusing it of providing support to Quds Force, an elite unit of Iran’s Revolutionary Guard. The carrier recently halted flights to Germany and France due to U.S. sanctions over its military transport flights to Syria, where Iran supports President Bashar Assad’s forces. The United States views private Iranian airline Mahan Air’s launch of a direct flight from Tehran to Caracas as a “politically motivated gesture” with “no commercial reason,” a White House official said on Monday. “This is a politically motivated gesture that is unhelpful to the Venezuelan people because it doesn’t accelerate the change that we’re looking for,” the official said. (Fox News: https://www.foxnews.com/world/us-blacklisted-iranian-airline-begins-direct-flights-to-venezuela; Reuters, https://www.reuters.com/article/us-iran-venezuela-airlines-usa/no-commercial-reason-for-irans-mahan-air-flights-to-venezuela-white-house-official-idUSKCN1RK2CJ; https://www.reuters.com/article/us-iran-venezuela-airlines/iranian-delegation-travels-to-venezuela-to-discuss-direct-flight-route-idUSKCN1RK1VM; https://www.reuters.com/article/iran-venezuela-airlines/irans-mahan-air-launches-direct-flights-to-venezuela-idUSL8N21Q11T)

 

As the Maduro regime blocks aid and makes arbitrary arrests, locals turn to an app as a lifeline

In a crumbling country where almost all but state-owned media outlets have been shuttered, food and medicine are scarce, unrest is rising, and authorities could throw you behind bars at any moment – there is an app that is being accredited as something of a lifeline for desperate Venezuelans and for their compadres abroad. ZELLO, which functions akin to a walkie-talkie and is a push-to-talk voice messaging app, introduced the Venezuela-specific channel Venezuela Hasta Los Tuétanos to provide information about the burgeoning political, social, economic, and humanitarian calamity. The app creators are purporting not only to help Venezuelans coordinate protests, elude security and mobilize their marches, but it also endeavors to assist in pinpointing where crucial humanitarian resources such as food and medicine can be located. Since the contested Nicolas Maduro took a self-styled oath for a new term, which has not been recognized by most of the international community, there has been a 135% uptick in downloads. Overall, there have been 735,696 downloads in Venezuela, and over 13,600 in the ailing nation this year alone. Furthermore, the 24/7 channel itself is documented to now has over 70,000 subscribers and on average, there are 200 to 2,000 listeners connected at any given time. And as the once oil-swathed and wealthy nation continues to fall apart at the seams, the app doesn’t come at a cost. Yet on the ground in the poverty-stricken country, views on the app were mixed. Some expressed concern that it had been penetrated by government intelligence and that even though identities were not disclosed, efforts to challenge the regime could still be intercepted and ultimately crushed. (Fox News: https://www.foxnews.com/tech/as-venezuelas-government-blocks-aid-and-arbitrarily-arrests-locals-turn-to-an-app-as-a-lifeline)

 

Oil & Energy

Venezuela pledges to honor oil commitments to Cuba despite sanctions

Venezuela will “fulfill its commitments” to Cuba despite United States sanctions targeting oil shipments from this country to its ideological ally, Foreign Minister Jorge Arreaza said on Monday. Washington on Friday imposed sanctions on 34 vessels owned or operated by state-run oil company Petroleos de Venezuela as well as on two companies and a vessel that have previously delivered oil to Cuba, aiming to choke off a crucial supply of crude to the Communist-run island. Venezuela has long sent subsidized crude to Cuba. The United States describes the arrangement as an “oil-for-repression” scheme in which Havana helps socialist Nicolas Maduro weather an economic crisis and power struggle with the opposition in exchange for fuel. Arreaza said he would not reveal Venezuela’s “strategy,” but that the sanctions would not stop the shipments. “When the conventional power of capitalism attacks you, you have to know how to respond through non-conventional means, always respecting international law,” Arreaza told reporters. Venezuela’s legislature last month ordered an end to oil shipments to Cuba, but PDVSA - controlled by military officers loyal to Maduro - has continued the exports. The most recent fuel shipment to Cuba left Venezuela’s Jose port on April 4, carrying liquefied petroleum gas, according to REFINITIV EIKON data. In the second half of March, two tankers carrying crude and two tankers carrying refined products left for Cuba. The only tanker sanctioned on Friday, the Despina Andrianna, is currently returning to Jose after unloading crude at Cuba’s Cienfuegos refinery in March. Another three vessels are waiting off Venezuela to load with shipments destined for Cuba. (Reuters: https://www.reuters.com/article/us-venezuela-politics-cuba/venezuela-pledges-to-honor-oil-commitments-to-cuba-despite-sanctions-idUSKCN1RK2HZ)

 

US sanctions 34 tankers that transport oil from Venezuela to Cuba

The US Treasury Department announced on Friday economic sanctions against 34 oil tankers that transport petroleum from Venezuela to Cuba, a new pressure tactic against the regime of Nicolas Maduro. “The United States is holding accountable those responsible for Venezuela’s tragic decline and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” Treasury Secretary Treasury Steven Mnuchin said in a statement on Friday. “Cuba continues to profit from, and prop up, the illegitimate Maduro regime through oil-for-repression schemes as they attempt to keep Maduro in power,” Mnuchin said. “The United States remains committed to a transition to democracy in Venezuela and to holding the Cuban regime accountable for its direct involvement in Venezuela’s demise,” he added. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2477067&CategoryId=10717; Reuters, https://www.reuters.com/article/us-venezuela-politics-pence-houston/u-s-ratchets-up-pressure-on-venezuela-cuban-backers-idUSKCN1RH1B5; Bloomberg, https://www.bloomberg.com/news/articles/2019-04-05/u-s-sanctions-two-companies-over-venezuela-cuba-oil-shipments)

 

Lawyers for Venezuela's Guaidó ask U.S. court to protect CITGO

Representatives of Venezuelan interim president Juan Guaidó have asked a U.S. court to overturn a prior ruling allowing Canadian miner CRYSTALLEX to seize part of U.S. refiner CITGO, which is owned by state oil company Petroleos de Venezuela. Last year, a judge ruled CRYSTALLEX could seize shares in CITGO and auction them in its bid to get paid on a US$ 1.4 billion award tied to the 2008 nationalization of its gold mining operations by the now cash-strapped country. That conflicts with Guaidó’s efforts to preserve the country’s assets abroad, especially CITGO, which is pledged as collateral to multiple creditors. His lawyers argued to an appeals court that a lower court’s ruling in favor of CRYSTALLEX be reversed considering the new political circumstances. In its March 20 ruling allowing Guaidó’ s representatives to intervene in the case, the judge said CRYSTALLEX would have until April 10 to respond to its arguments. (Reuters: https://www.reuters.com/article/us-venezuela-politics-crystallex/lawyers-for-venezuelas-Guaidó-ask-u-s-court-to-protect-citgo-idUSKCN1RH2JA)

 

Restoring Venezuela's electricity system may take up to one year — regime to cut electricity 18 hours per week

Works to restore Venezuela's electricity system may take up to a year, the country's Electricity Minister Igor Gavidia told Venezolana de Television TV channel on Monday. "We will solve the problem in accordance with the plan set for us by President Nicolas Maduro. We are talking about plans for several terms - for up to 30 days, for 30-60 days, for 60-90 days, and for a year," Gavidia, who was appointed as Electricity Minister on April 1, said. The Nicolas Maduro regime released on Friday its schedule for electricity rationing for Venezuela, with the exception of Caracas and three other states, according to which the general public will be without electric power for at least 18 hours per week. The Electric Energy Ministry and the state-run CORPOELEC electricity company designed a schedule dividing 20 of the country’s 23 states into five sectors with different rationing schemes with the idea of implementing daily three-hour blackouts six days per week. According to this plan, on one day per week each sector will have electricity for the full 24 hours. The rationing measure specifically excludes the state of Vargas near Caracas where Venezuela’s main airport is located, along with the southern state of Amazonas and the northeastern state of Delta Amacuro, border regions far from the capital. (TASS: http://tass.com/world/1052742; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2477054&CategoryId=10717)

 

UNICEF sends generators to Venezuela’s hospitals

With no end to the political crisis in sight, UNICEF has provided generators to guarantee power to 7 hospitals. Many regions of Venezuela continue to be deprived of electricity and drinking water, as more and more supplies are cut off due to the ongoing political crisis. In response the charity UNICEF has deployed portable generators to guarantee a supply of electricity to pediatric hospitals and maternity wards. Much of UNICEF’s work is being coordinated with the government ministry for health. UNICEF reports supplying generators to 7 state run hospitals to guarantee enough electricity to allow surgeries and births to take place. It is estimated that up to 24,000 children will benefit as a result of these measures. UNICEF has also increased its supply of vaccines for diseases such as measles, diphtheria, malaria and HIV, aiding another 150,000 people. The country’s water supply has also been affected by the crisis, with much of the infrastructure being neglected, depriving many areas of a reliable supply of clean water. UNICEF reports that it has distributed water purification tablets to over 12,000 families, with a further 4,200 receiving oral rehydration salts as well. (Vatican News: https://www.vaticannews.va/en/world/news/2019-04/unicef-sends-generators-to-venezuela-s-hospitals.html)

 

Venezuela oil production 'bad, getting worse,' IHS Markit's Yergin says

Daniel Yergin, vice chairman at IHS Markit, discusses Venezuela's oil production, the Trump administration's sanctions on Iran, and possible Permian basin energy firm consolidation. He speaks with Bloomberg's David Westin and Alix Steel on "Bloomberg Markets: Balance of Power." (Bloomberg, https://www.bloomberg.com/news/videos/2019-04-05/venezuela-oil-production-bad-getting-worse-ihs-markit-s-yergin-says-video)

 

 

Economy & Finance

World Bank sees Venezuela GDP contracting another 25% by year end

The economy in crisis-hit Venezuela is expected to contract a further 25% in 2019, the World Bank said on Thursday. "Real GDP contracted by 17.7% in 2018 and is likely to fall by 25.0% in 2019, which would imply a cumulative fall in GDP of 60% since 2013," the bank said in its most recent biannual report on Latin America and the Caribbean. The report attributes this "continuing implosion" in Venezuela, which has the most oil reserves of any country in the world, to the management of the country's economy rather than the global drop of oil prices and called the Venezuelan crisis "by far the worst in the region's modern history." Together with declining oil prices, "highly distortionary policies, from price controls to directed lending, a disorderly fiscal adjustment, monetization of the public sector deficit, and overall economic mis-management have led to hyperinflation, devaluation, debt defaults, and a massive contraction in output and consumption" in Venezuela, according to the World Bank. The bank repeated the estimate that the country would see inflation of 10 million per cent by the end of the year, a figure that was already predicted by the International Monetary Fund (IMF) in October. The report, by the World Bank's Latin America and Caribbean chief economist Carlos Vegh, stressed the "tragic growth collapse" here as "economic and social conditions continue to deteriorate rapidly." "Hunger and disease are spreading throughout the country," it said, citing the 90% poverty rate (according to unofficial estimates) and highlighting a rising infant mortality rate of 26 per every thousand live births between 2013 and 2017, a rate similar to the 1980s. "Crime and violence have also increased substantially, with Venezuela becoming the country with the highest homicide rate in the region (89 homicides per 100,000 inhabitants), a rate almost three times as high as that of countries at war," it added. (Times Now: https://www.timesnownews.com/business-economy/world-news/article/world-bank-sees-venezuela-gdp-contracting-another-25-by-year-end/394956)

 

Without water, Venezuela Central Bank said to send workers home

Venezuela’s central bank has been operating with an emergency team of only about 100 workers since a power outage left its headquarters without running water two weeks ago, according to four people with direct knowledge of the situation. Most of the bank’s 2,000 employees were sent home when the lights went off in Caracas on March 25 -- and haven’t been able to return since, said the people on condition of anonymity. The emergency group has been working from a library with the help of water tanks, focused on vital tasks to keep operations going, such as transactions between local banks and reserves, they added. The central bank’s situation underscores the disarray inside President Nicolas Maduro’s administration. Bathrooms have no water and the building has no air conditioning as a power crisis exacerbated water shortages in the Venezuelan capital amid a drought. Employees don’t know when they will be able to return to work. While a power rationing announced by Maduro late last month has so far exempted the capital, electricity has been intermittent, keeping vital pumps from reservoirs off line. Caracas, 900 meters (2,950 feet) above sea level, gets its water from the Tuy system of reservoirs, whose pumping stations require a minimum of 600 megawatts to operate. Venezuelans poured into the streets on Saturday, demonstrating against the near-total breakdown in public services and rallying behind National Assembly leader Juan Guaidó, who claims to be the country’s rightful president. (Bloomberg: https://www.bloomberg.com/news/articles/2019-04-09/without-water-venezuela-central-bank-said-to-send-workers-home)

 

Venezuela Needs Recovery Before Bond Talks, Hausmann Says

Ricardo Hausmann, professor at the John F. Kennedy School of Government at Harvard University and former Venezuela minister of planning, discusses opposition leader Juan Guaidó’ s plans to address the economic and humanitarian crisis in Venezuela. He speaks with Bloomberg's Vonnie Quinn and Amanda Lang on "Bloomberg Markets." (Bloomberg, https://www.bloomberg.com/news/videos/2019-04-05/venezuela-needs-recovery-before-bond-talks-hausmann-says-video)

 

Politics and International Affairs

Venezuelans demand power, water, Maduro's ouster

After weeks of power cuts and limited access to water, tens of thousands of Venezuelans took to the streets Saturday to back opposition leader Juan Guaidó and protest Nicolas Maduro, whom they accuse of wrecking the economy. Venezuelans, already suffering from hyperinflation and widespread shortages of food and medicine, say the crisis has worsened over the past month. That is when crippling nationwide power outages began to leave vast swaths of territory in the dark for days at a time, cutting off water supplies and cellphone service. Guaidó, head of the opposition-controlled National Assembly and recognized as Venezuela's legitimate head of state by most Western nations, had called for rallies on Saturday to mark the start of what he has billed as a new wave of "definitive" protests to oust Maduro. In Caracas, thousands of opposition supporters assembled at a main rally point in the eastern El Marques district. Protesters said their homes had been without water for days and many had taken to drawing it from unsanitary pipes or streams running off the Avila mountain overlooking Caracas. "We haven't just come to demand water and power. We've come to demand freedom and democracy," Guaidó said at the Caracas rally, surrounded by a cheering crowd. "We can't let ourselves become used to this. We can't put up with it. We aren't going to let these crooks keep hold of our country." While no protest-related violence was reported in Caracas, witnesses reported clashes between protesters and police in the steamy oil hub of Maracaibo. Demonstrators in the city, in the western state of Zulia, told Reuters that police had fired rubber bullet rounds and tear gas to disperse them. The National Assembly, on its Twitter account, said two of its lawmakers had been arrested and then released by authorities at the Maracaibo protest. The ruling Socialist Party staged a rival march in Caracas' center on Saturday, with mostly state workers clad in red shirts and red baseball caps, banging drums and dancing salsa. The U.S. government on Friday took another step in its efforts to force Maduro out, by imposing new sanctions on Venezuelan oil shipments, and promising "stronger action" against key ally Cuba for helping to keep his government afloat. (VOA: https://www.voanews.com/a/venezuelans-demand-power-water-maduro-s-ouster/4864903.html; France24: https://www.france24.com/en/20190407-venezuela-protest-juan-Guaidó-declares-escalation-maduro)

 

Guaidó to host world leaders in Venezuela

Venezuela’s interim President Juan Guaidó announced on Saturday an upcoming gathering of world leaders here to address what the opposition calls a humanitarian emergency in this nation. “We will have a great global encounter here in Venezuela of leaders to talk about the situation in Venezuela, about the humanitarian emergency, about the solution and the alternatives for change in Venezuela,” he told thousands of supporters in Caracas. The speaker of the opposition-controlled National Assembly provided no details about the date of the encounter and did not name the participants, but his press team said that more information would be provided in the coming days.
The rally Guaidó addressed in the capital was one of more than 350 planned demonstrations across Venezuela to denounce the leftist regime of Nicolas Maduro for a series of nationwide power blackouts, including one that lasted five days. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2477093&CategoryId=10718)

 

U.S., Brazilian Vice Presidents discuss Venezuela pressure at White House

U.S. Vice President Mike Pence met with his Brazilian counterpart Hamilton Mourao at the White House on Monday to discuss sanctions and diplomatic efforts aimed at increasing the pressure on Venezuelan President Nicolas Maduro to exit. In his first-ever talks with Mourao, Pence aimed to encourage the former Brazilian general to use his experience and influence to urge Venezuelan military leaders - as well as China and Russia - to pull back on their support of Maduro, a White House official said. Mourao, who was a defense attaché in Caracas, "has a very unique perspective" when it comes to helping convince Venezuelan military leaders to switch sides, the White House official said, speaking on condition of anonymity. "He speaks with a unique credibility from within the region as a senior political leader with a military background. That voice is very important, and he is using that voice to advance the cause," the official said. Mourao is also well-positioned to confront Russia and China over their support of Maduro, since Brazil is a partner with the nations in the BRICS group of largest emerging markets economies, the official said. (The New York Times: https://www.nytimes.com/reuters/2019/04/08/world/americas/08reuters-venezuela-politics-usa-brazil.html)

 

Brazil's Bolsonaro says working with U.S. to sow 'dissent' in Venezuela army

Brazilian President Jair Bolsonaro said on Monday he is working with the U.S. government to sow dissent within the Venezuelan Army. Bolsonaro, during an interview with Jovem Pan radio, said that if there is a military invasion in Venezuela, he would ask to seek the counsel of Brazil’s National Defense Council and Congress on what, if any, action his country should take. “We cannot allow Venezuela to become a new Cuba or North Korea,” the right-wing president said. Bolsonaro said that if any military intervention deposed Nicolas Maduro, it is quite likely that the country would see guerrilla warfare waged by Maduro’s diehard backers and whomever took power. (Reuters: https://www.reuters.com/article/us-venezuela-politics-brazil/brazils-bolsonaro-says-working-with-u-s-to-sow-dissent-in-venezuela-army-idUSKCN1RK2JC)

 

U.S. military wary of China’s foothold in Venezuela

As U.S. President Donald Trump’s national security team mulls a military intervention to oust Venezuela’s strongman Nicolás Maduro, the Pentagon is watching China’s commercial and financial creep in the crisis-gripped nation with growing alarm. In an interview with Foreign Policy, Adm. Craig Faller, the four-star military officer who heads U.S. Southern Command, pointed to a Chinese disinformation campaign designed to blame the United States for the blackouts that devastated Venezuela in recent weeks. Maduro has himself publicly accused the U.S. Defense Department of causing the blackouts. Following the power failures, Beijing offered to help the Venezuelan government restore its grid. “China came out publicly, a state spokesman, implying the blackouts were attributable to U.S. cyberattacks,” Faller said during a recent trip to Washington, D.C. “That is just such a blatant lie. The blackouts are attributed to Maduro’s inept leadership, corruption, inattention to his people, and lack of concern for any humanity.” “I think the biggest threat to democracy and the way of life around the world is the trend that we see in China,” Faller said. He said China was trying to assert economic control in Venezuela by investing in infrastructure and providing hefty loans that Caracas would have difficulty paying back. Faller would not discuss specific U.S. plans for a military intervention to oust Maduro in favor of opposition leader Juan Guaidó. He said the military is “looking at a range” of options and “will be ready” for whatever decision the president makes. “We are on the balls of our feet,” Faller said. “The crisis in Venezuela could approach that degree by the end of this year if Maduro still remains in power. It’s that bad,” said Faller, who served previously as the director of operations at U.S. Central Command. (Foreign Policy: https://foreignpolicy.com/2019/04/08/us-military-wary-of-chinas-foothold-in-venezuela-maduro-faller-Guaidó-trump-pentagon/)

 

Pompeo to visit Venezuela border on South America tour

US Secretary of State Mike Pompeo will travel to the Venezuela border in Colombia to highlight the plight of refugees during a four-nation trip to Latin America, the State Department announced Monday. Pompeo will pay a brief visit on Sunday to the Colombian city of Cucuta after stops in Chile, Paraguay and Peru -- all four countries led by right-wing or center-right leaders favorable to the tough US approach on Venezuela. In Cucuta, Pompeo will "visit entities supporting Venezuelan refugees and assess the challenges due to the closed border," the State Department said in a statement. In Peru, the State Department said Pompeo on Saturday will discuss support for Venezuelan refugees as well as the country's role in leading the Lima Group -- the group of Latin American nations and Canada that meets on the crisis in Venezuela. (France24: https://www.france24.com/en/20190408-pompeo-visit-venezuela-border-south-america-tour)

 

Special Representative Abrams to discuss Venezuela crisis with Portuguese and Spanish officials

Special Representative for Venezuela Elliott Abrams will meet with Portuguese and Spanish officials in Lisbon and Madrid April 9-11 to discuss the deteriorating situation in Venezuela. The United States, Portugal, and Spain support a Venezuelan-led transition toward free and fair elections. The United States is committed to supporting the restoration of democracy in Venezuela, as outlined in their constitution and through the actions of Interim President Juan Guaidó and the National Assembly. (US State Department: https://www.state.gov/r/pa/prs/ps/2019/04/290958.htm)

 

EU must step up diplomacy on Venezuela crisis: Spain

EU and Latin American efforts to resolve the Venezuela crisis peacefully are too slow and must be accelerated, Spain's foreign minister Josep Borrell said Monday. In Montevideo on February 7, an International Contact Group of European Union and Latin American countries gave themselves 90 days to pave the way for new elections in Venezuela, which President Nicolas Maduro rejects. With less than a month before the deadline, the work of the Contact Group is "too slow", Borrell said at talks in Luxembourg with fellow EU foreign ministers. "We did not feel a sense of urgency," Borrell said of the last Contact Group talks Thursday in Ecuador. "After today's meeting (in Luxembourg), we all left convinced that the work must be speeded up." A diplomat added that the foreign ministers were "disappointed" with the lack of progress made by the contact group. In Ecuador, EU foreign policy chief Federica Mogherini last week reiterated her "firm rejection of the use of force to address the current crisis". She called for "the full restoration of the democratic constitutional order and the rule of law". Borrell raised the possibility of more sanctions against members of the Maduro government. (France24: https://www.france24.com/en/20190408-eu-must-step-diplomacy-venezuela-crisis-spain)

 

Mexico is open to mediating Venezuela crisis, president says

President Andres Manuel Lopez Obrador said Monday that Mexico was willing to serve as a mediator between the opposing sides in Venezuela after Nicolas Maduro announced that he was open to having a third-party help end the political crisis here. "Mexico has its doors open so that a peaceful path can be found to resolving Venezuela's conflict," Lopez Obrador, the founder and leader of the leftist National Regeneration Movement (Morena), said during his daily press conference at the National Palace. The president said Mexico proposed that the parties sit down and talk. "That's the best thing, find a peaceful way (out of) the conflict in Venezuela," Lopez Obrador, popularly known as AMLO, said. "We're willing to help so that a dialogue can take place," the president said, noting that this was the Mexican tradition in foreign policy. The president warned, however, that there must be "acceptance by the opposition group" before a dialogue could take place. "The two parties have to request it. Request it, and we will help. We have already said that there are very good diplomats in Mexico and we even talked about mediation by diplomats," Lopez Obrador said. AMLO said it would be a positive move to use Mexico as the location for any dialogue. On Saturday, Maduro asked Mexico, Bolivia, Uruguay and the Caribbean Community (CARICOM) to reactivate the Montevideo process, an initiative to promote dialogue between the opposing sides in Venezuela. The opposition, led by National Assembly Speaker Juan Guaidó, has said on numerous occasions that it would only back a dialogue that resulted in Maduro stepping down. (EFE: https://www.hoylosangeles.com/efe-3947552-15313250-20190408-story.html)

 

Maradona fined after dedicating win to Venezuela's Maduro

Diego Maradona has been fined for dedicating a recent victory by his Mexican club to Venezuelan President Nicolas Maduro, Mexico's football federation said on Monday (Apr 8).  The Argentine, who coaches Dorados de Sinaloa, had dedicated a 3-2 win over Tampico Madero to Maduro and Venezuela in a news conference at the end of last month. The body said in a statement that Maradona had been fined an unspecified sum for violating the federation's code of ethics which mandates political neutrality. Maradona had said he was dedicating the victory to Maduro and Venezuelans caught up in an economic crisis. He also criticized US President Donald Trump. (Channel News Asia: https://www.channelnewsasia.com/news/sport/football-maradona-fined-after-dedicating-win-to-venezuela-s-11424974)

 

OP-ED: Showdown of world powers in Venezuela enters dangerous, new phase, by Fred Kempe

The first major showdown of our new era of great power competition, unfolding with accelerating speed over the past ten weeks in Venezuela, has entered a dangerous new phase. How this drama turns out may mark the most significant test yet of the Trump administration’s credibility, following a highest-level chorus this week of President Donald Trump, Secretary of State Mike Pompeo and National Security Advisor John Bolton, who all declared – in one way or another – that Russia had to get out of the country. What raised the stakes was Russia’s well-publicized and provocative move on March 23 to land two planes with some 100 soldiers in Caracas. The ostensible reason for their arrival was to service Venezuela’s Russian-made S-300 air defense systems, which are said to have been damaged in recent energy blackouts. Other Russian military contractors and mercenaries are already believed to be providing security support for the Maduro regime. That was accompanied by this week’s decision of Maduro’s puppet National Constituent Assembly to strip interim President Juan Guaidó of his immunity. That raises the possibility, perhaps as early as this weekend, that the Maduro regime could arrest and imprison Guaidó. What concerns US officials is that Vladimir Putin may be laying the ground for making Venezuela the defining foreign policy debacle for President Trump in the same way Syria became that for the Obama administration. Though there is a great deal that differentiates Venezuela and Syria, what connects them is considerable: a weakened dictator, who would be much more likely to fall without Moscow’s support, a U.S. declared red-line that the Kremlin finds unconvincing, and a chance for Putin to shore up his global reputation at the expense of Washington –this time in the Western Hemisphere. As is so often the case in the Trump administration, there is also a personal element for a president who has refrained from the tough language toward Putin and Russia employed by the top US officials around him. Putin is betting big that Trump has neither the will nor a plan. (CNBC: https://www.cnbc.com/2019/04/05/showdown-of-world-powers-in-venezuela-enters-dangerous-new-phase.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.

December 27, 2018

Oil & Energy

EXXON continues drilling offshore Guyana as Venezuela lodges complaint

EXXON MOBIL Corp said on Wednesday its oil drilling and development activities offshore Guyana were unaffected by a weekend incident in which Venezuela’s navy stopped two exploration vessels the company had hired. Its 10 oil finds are at least 110 km (68 miles) away from the northwest part of the Stabroek block where the incident took place, the company said. The company has a permit from Guyana to explore the Stabroek block. “Exploration and development drilling is continuing in the southeast area of the Stabroek Block,” the company said in a statement. An EXXON spokeswoman declined to say whether the two vessels, owned by Norway’s Petroleum Geo-Services, planned to continue their survey. A notice of the survey published on Guyana’s Maritime Administration Department’s website was dated Dec. 7, and said the work was scheduled for a six-month period. Critics say socialist President Nicolas Maduro is using the dispute over the Essequibo, a sparsely populated jungle region making up two-thirds of Guyana’s land which Venezuela also claims, to distract from hyperinflation and shortages of basic goods that have prompted millions of Venezuelans to emigrate. (Reuters: https://www.reuters.com/article/us-guyana-venezuela-oil/exxon-continues-drilling-offshore-guyana-despite-venezuela-incident-idUSKCN1OP0UB)

 

HESS market cap plunges US$ 1.5 billion as major project halted

HESS Corp. tumbled the most in almost three years, wiping out US$ 1.5 billion in market valuation, after work at the oil explorer’s most promising international investment was halted by a Venezuelan blockade. The intervention threatened to derail development of a 5 billion-barrel discovery off Guyana’s coastline that is so important to HESS’s future growth plans that it receives top billing in the New York-based driller’s investor presentations. Although significant for partners EXXON MOBIL Corp. and CNOOC Ltd., HESS is particularly dependent on the Guyanese project to generate production growth and cash flow into the next decade. Venezuela, which has long disputed neighboring Guyana’s offshore claims, “aggressively” interrupted the EXXON-led effort to map the sea floor on Dec. 22, U.S. State Department Deputy Spokesman Robert Palladino said on Sunday. By early Monday, the Venezuelan vessels had withdrawn, according to Bard Stenberg, a spokesman for vessel owner Petroleum Geo-Services ASA. (Bloomberg, https://www.bloomberg.com/news/articles/2018-12-24/exxon-stymied-by-venezuelan-intervention-at-major-offshore-field)

 

Venezuela oil price falls to lowest since 2017

The price Venezuela receives for its mix of medium and heavy oil continued falling to its lowest since October of 2017. According to figures released by the Ministry of Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending December 21 fell to US$ 51.45, down US$ 2.91 from the previous week's US$ 54.36. According to Venezuelan government figures, the average price in 2018 for Venezuela's mix of heavy and medium crude for 2018 which Caracas now prices in Chinese Yuan (423.91) is now US$ 61.49. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2472108&CategoryId=10717)

 

SPECIAL REPORT: Oil output goes AWOL in Venezuela as soldiers run PDVSA

President Nicolas Maduro turned heads in November 2017 when he named a National Guard general with no oil experience to lead PDVSA. Major General Manuel Quevedo’s actions since have raised even more doubts that he and the other military brass now running the company have a viable plan to rescue it from crushing debt, an exodus of workers and withering production now at its lowest in almost seven decades. Quevedo in recent months has enacted a series of controversial measures that oil industry experts, PDVSA employees and contractors, and even everyday citizens say are pushing the once-profitable and respected company towards ruin. Workers who make mistakes operating increasingly dilapidated PDVSA equipment now face the risk of arrest and charges of sabotage or corruption. Military chieftains, moonlighting in the private sector, are elbowing past other contractors for lucrative service and supply business with PDVSA. The lack of expertise among military managers is leading PDVSA to hire outsiders to keep afloat even basic operations, like drilling and pumping oil. To the dismay of many familiar with Venezuela’s oil industry, some of the contracts are going to small, little-known firms with no experience in the sector. Critics of the arrangements, and government opponents, say the transactions aren’t transparent. By keeping details from the public, they argue, the company faces little scrutiny over whom it chooses to do business with. The steps leave Venezuela’s most important company - which accounts for over 90% of export revenue - with even fewer means to rebuild the nation’s coffers, pay its many creditors and regain self-sufficiency as an oil producer. Military officials atop PDVSA have put aside any pretense of running it like a proper business, doing little to stem the fall in production or improve the company’s financial, operational and staffing problems. Operational problems under Quevedo have caused production to drop 20% to 1.46 million barrels per day, according to the latest figures Caracas reported to OPEC, the oil cartel, of which it is a member. The gross value of PDVSA’s oil exports is expected to fall to US$ 20.9 billion this year compared with US$ 24.9 billion last year. Exports a decade ago were over four times as much, reaching $89 billion, according to PDVSA’s accounts for 2008. PDVSA didn’t publish a 2017 report and hasn’t released financial results in 2018. Over the past year Quevedo has failed to reverse the slide in production. One of his first challenges was to stanch the flow of workers, many of whom deserted the company and Venezuela altogether. PDVSA hasn’t disclosed recent employment figures. But estimates by IPD Latin America, an oil and gas consultancy, indicate PDVSA has about 106,000 workers – 27% fewer than in 2016. PDVSA salaries have crumbled to the equivalent of a handful of dollars a month for most workers. With no money, and little real work to do at idle and faulty facilities, some employees only show up to eat at the few company cafeterias that remain open. Shippers told Reuters that PDVSA workers at times board vessels to ask for food. To boost manpower, Quevedo has been staffing some jobs, including posts that once required technical knowledge, with National Guard recruits. The changes are disturbing buyers here. Some tanker captains complain that young soldiers are woefully unprepared to verify technical details, like whether crude density, a crucial attribute of quality, complies with contract specifications. Crews fret a stray bullet from the soldiers’ rifles could spark fires and complain that some of the crime afflicting the country is making its way on board. Although Quevedo has tasked the soldiers to help spot graft, some of the low-paid recruits ask for bribes themselves, shippers said, for signing off on paperwork or completing inspections. Even with soldiers as substitutes, PDVSA can’t find the workers it needs to man many posts. From the processing of crude at refineries to contract negotiations with buyers, the shortage of skilled staffers is hobbling the company. (Reuters: https://www.reuters.com/article/us-venezuela-pdvsa-military-specialrepor/special-report-oil-output-goes-awol-in-venezuela-as-soldiers-run-pdvsa-idUSKCN1OP0RZ)

 

Commodities

Russian companies get green light to mine gold in Venezuela

Venezuelan authorities have offered Russian companies to take part in gold exploration and gold mining in the country, according to Russian Ambassador to Venezuela Vladimir Zaemsky. The official added that Caracas is deeply interested in cooperating with Russia in the sector of exploration of the country’s solid extractable resources, including gold, diamonds and coltan, which is used for the extraction of elements such as niobium and tantalum. According to Zaemsky, the parties are also discussing possibility of cooperating on Russia’s Global Navigation Satellite System (GLONASS), which is run by the Russian Aerospace Defense Forces and is currently the second alternative navigational system in operation. (RT: https://www.rt.com/business/447438-venezuela-russia-gold-exploration/)

 

Venezuela cocoa growers fear new pest: the government

Venezuela cocoa trader Freddy Galindo has battled highway robberies, kidnappings of family members and declining quality in his 19 years exporting the nation’s legendary beans. This year’s harvest brought a new worry: meddling by the socialist government. He said trucks filled with beans leaving his warehouse in central Venezuela were stopped by soldiers at checkpoints and held for days; drivers were forced to unload some cargos at government warehouses. Galindo claims that some 87 tons of his cocoa, worth about US$ 130,000, were missing when the trucks were finally released. Other traders here in Miranda state, Venezuela’s No. 2 producing region, have reported similar delays and confiscations in recent months. Government officials say the checkpoints are meant to nab cocoa thieves, and that some beans have been seized by the state to settle owners’ delinquent tax bills. But the confrontations have unnerved growers and traders who fear their industry is being targeted for a government takeover. The private sector still controls most of the cocoa trade. But with crude output collapsing amid an economic crisis, the government has increased its emphasis on alternative export industries such as cocoa and gold. Delays in export permits have stalled shipments, forcing buyers to go elsewhere. Quality has suffered too. Venezuela’s strict currency controls have prevented many farmers from getting imported chemicals they need to fight disease. (Reuters: https://www.reuters.com/article/us-venezuela-cocoa/venezuela-cocoa-growers-fear-new-pest-the-government-idUSKCN1OQ09G)

 

Venezuela regime seizes control of starving country's meat

Twenty-one public and private slaughterhouses are under a “temporary occupation,” announced Tareck El Aissami, Venezuela’s Vice President for the Economic Area. The seizure — which is for “180 days renewable” — will guarantee the “correct distribution of meat products,” according to El Aissami. Aissami claimed “irregular activities" by “mafias” prevented “access to meat at fair prices." The Public Prosecutor's Office will investigate the owners of the “intervened slaughterhouses,” he said. The move follows President Nicolas Maduro’s call for a complete seizure of Venezuela’s meat industry. “The government has to assume 100% of the production, distribution and marketing of meat,” Maduro declared early in November. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2472039&CategoryId=10717)

 

Economy & Finance

Venezuela bondholders are gearing up for battle after futile year

For the better part of the past year, Venezuela’s debt market has been dead. The bonds are in default and there are no restructuring talks, almost no trading and little action from creditors beyond grumbling in private. But that appears about to change. In the past few weeks, one group of investors banded together to demand immediate payment on the notes they hold, another cohort hired a law firm to review their options and a separate creditor sued in U.S. federal court. Their impetus to act seems to stem from both fleeting patience and the realization that if they don’t move now, they may fall behind other creditors in the line to lay claim to Venezuelan assets. Venezuelan debt has been hovering around 25 cents on the dollar since President Nicolas Maduro announced in November 2017 that he was suspending payments and seeking talks with creditors. Those discussions never took place, due to U.S. sanctions that make doing business with the country difficult, and for the most part not much else was happening as the arrears piled up. Now the urgency to act has increased after Houston-based CONOCO PHILLIPS and Canadian gold miner CRYSTALLEX International Corp. managed to wring payments worth a total of US$ 1 billion out of Venezuela to partially satisfy claims over appropriated assets. If those entities were able to get paid, bondholders’ thinking goes, then debt investors should be able to get a piece. The prize that creditors have their eyes on is the country’s largest U.S. asset, the refining company CITGO Holding Inc., which has been valued at US$ 11 billion. Unsecured bondholders are likely to find themselves fighting with a long line of claimants. In addition to having to compete with businesses armed with international arbitration awards, state oil company bonds due in 2020 are explicitly backed by a stake in the refiner, giving those holders a strong claim on the asset. In the meantime, bonds are barely moving. Aggressive legal actions from bondholders could also hinder PDVSA’s operations. Maduro has said that he’s holding talks with bondholders and predicted this month that a deal will be struck next year. There are zero signs of any such discussions. And analysts say there’s likely to be a lot more drama before anything is resolved. (Bloomberg: https://www.bloomberg.com/news/articles/2018-12-26/venezuela-bondholders-gearing-up-for-battle-after-futile-year)

 

In Venezuela, Russia pockets key energy assets in exchange for cash bailouts

As allies go, Venezuela is a relatively cheap one for Russia. But the potential returns on Moscow’s investment there could be priceless. In exchange for modest loans and bailouts over the past decade, Russia now owns significant parts of at least five oil fields in Venezuela, which holds the world’s largest reserves, along with 30 years’ worth of future output from two Caribbean natural-gas fields. Venezuela also has signed over 49.9% of CITGO; it’s wholly owned company in the United States — including three Gulf Coast refineries and a countrywide web of pipelines — as collateral to Russia’s state-owned ROSNEFT oil behemoth for a reported US$ 1.5 billion in desperately needed cash. Russian advisers are inside the Venezuelan government, helping direct the course of President Nicolás Maduro’s attempts to bring his failing government back from bankruptcy. They helped orchestrate this year’s introduction of a new digital currency, the “Petro,” to keep oil payments flowing while avoiding U.S. sanctions on the country’s dollar transactions. Venezuela’s still-formidable defense force, once an exclusively U.S. client, is now equipped with Russian guns, tanks and planes, financed with prepaid oil deliveries to Russian clients. Maduro scoffed last year at President Trump’s public threat to use the U.S. military to bring him down, saying Venezuela, with Russian help, had turned itself into a defensive “fortress.” For Russia, the establishment of a political outpost in the Western Hemisphere is “a strategic win,” said Eric Farnsworth, vice president of the Council of the Americas and the Americas Society. “I don’t think Russia cares two bits about the survival of the Maduro regime,” Farnsworth said. “He is a means to an end. The end is to project power, bust out of sanctions the West has imposed and cause difficulties for the United States. If at the end of the day, they’ve got an unreliable partner, if they lose a few billion dollars, maybe that’s okay.” China has shown little interest in accumulating Venezuelan assets or strengthening political ties with Maduro’s failing regime. For the most part, it has concentrated on trying to get its loans repaid. Russia, in contrast, has repeatedly restructured, refinanced or taken in-kind payments from Venezuela. Maduro claims Russia has agreed to invest an additional US$ 5 billion to improve Venezuelan oil production — much of which goes to Russia’s export customers — and US$ 1 billion in gold mining. During his recent trip to Moscow, separate contracts were signed to supply Venezuela with 600,000 tons of Russian wheat and to modernize and maintain its Russian-made weaponry. Venezuela may well turn out to be a money-loser for Russia. Should the Maduro government fall, debt owed to Moscow, and Russian claims of Venezuelan oil and gas ownership, could end up in years of litigation as other creditors line up for repayment. Many are already in court, including claims demanding the sale of CITGO. But for now, Moscow clearly believes Venezuela is well worth the effort. (The Washington Post: https://www.washingtonpost.com/world/national-security/in-venezuela-russia-pockets-key-energy-assets-in-exchange-for-cash-bailouts/2018/12/20/da458db6-f403-11e8-80d0-f7e1948d55f4_story.html?noredirect=on&utm_term=.7a8fe4869463)

 

Politics and International Affairs

Venezuela calls U.S. comments on Guyana dispute 'interventionist'; CARICOM backs Guyana

Venezuela’s foreign ministry on Tuesday described as “interventionist and disrespectful” U.S. comments on a weekend incident in which the country’s navy stopped two ships exploring for oil for Exxon Mobil off Guyana’s coast. Each of the neighboring countries says the incident on Saturday occurred within its territorial waters. In response to the event, the U.S. State Department said Venezuela had behaved “aggressively” and called on the country to “respect international law and the rights of its neighbors.” Two vessels owned by Norway’s Petroleum Geo-Services (PGS.OL) and under contract by Exxon Mobil were conducting seismic survey work in the area. The ships stopped their work and turned east after the Venezuelan navy told them Guyana did not have jurisdiction there. When asked on Monday if there were plans for the vessels to resume their activities, Guyana Foreign Affairs Minister Carl Greenidge said the government was “in discussion” with EXXON. Neither Exxon nor PGS immediately responded to requests for comment on Tuesday, and the U.S. On Monday, the CARICOM group of 15 Caribbean nations including Guyana - many of which have historically received subsidized oil from Venezuela under Caracas’ PETROCARIBE program - said it viewed the “interception” by Venezuela’s navy “with grave concern.” “Such acts violate the sovereign rights of Guyana under international law,” the group said in a statement. (Reuters: https://www.reuters.com/article/us-guyana-venezuela-oil/venezuela-calls-us-comments-on-guyana-dispute-interventionist-idUSKCN1OO0NM)

 

Colombia expels Venezuelan “non-diplomat”, and Venezuela expels Colombia official

On Thursday, Colombia expelled Venezuelan national Carlos Pino, a man who was working in Caracas’ embassy in Bogota even though he was not a diplomat. Pino was not formally charged with any offenses, but Colombia said it was acting in “protecting national sovereignty.” A blue-blazer clad Pino was forced to cross, on foot, the bridge between Colombia and Venezuela by Colombian migration authorities Thursday. Pino, who worked at the embassy but had no work permission nor diplomatic immunity, has also been barred from entering Colombia for the next 10 years and will in the future require a visa to do so. Colombian media has described Pino as a man close to FARC, a trusted advisor of President Nicolas Maduro in issues dealing with Colombia and as a man involved in spying on Venezuelan refugee camps inside Colombia.  Pino had deep roots in Colombia: he is married to Gloria Florez Schneider, a former Colombian congresswoman close to left-wing leader Gustavo Petro, and had been living in Colombia for the last 18 years, meaning shortly after Chavez first took over in 1999. Petro is a former guerrilla who favored normalizing the FARC, the oldest left-wing guerrilla group in Latin America, but one who always failed in attaining power, either by force of through elections. Hours after Pino's expulsion, Venezuela quickly sided with the man it termed "an official, member of the personnel" of Maduro's legation in Bogota, claimed the treatment given to Pino was "a kidnapping" and in turn expelled Juan Carlos Perez Villamizar. The Maduro Regime described Perez as "a consular, non-accredited official" in the Colombian consulate in Caracas. In a communique, Venezuela's foreign office gave Perez -- whom it said was carrying out consular functions without due accreditation -- 48 hours to leave Venezuelan soil. Venezuelan media identified Perez as the acting consul of Colombia in Venezuela. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2471876&CategoryId=10717)

 

Brazil's Bolsonaro says he will target Venezuela, Cuba

Brazil’s President-elect Jair Bolsonaro said on Tuesday that he would take all action “within the rule of law and democracy” to oppose the governments of Venezuela and Cuba. He frequently targets Venezuela and Cuba for verbal attacks, a drastic change from Brazil’s governments under the leftist Workers Party that ruled from 2003 to 2016 and had warm relations with those regimes. The United States is counting on Brazil under Bolsonaro to be a strategic ally. (Reuters: https://www.reuters.com/article/us-brazil-politics-bolsonaro/brazils-bolsonaro-says-he-will-target-venezuela-cuba-idUSKBN1OH2F8)

 

Countless youngsters now live on the streets of Caracas

The streets of Caracas are full of children and teenagers who run, laugh, bathe in dirty rivers, hunt for food in garbage cans and also take drugs - these abandoned youngsters are yet another aspect of the severe social and economic crisis gripping the oil-producing nation that is Venezuela. The children who, in their majority, live in public areas of eastern Caracas, where besides begging they have created an elaborate survival system. No institution, public or private, has figures or even an estimate of how many children and teens now live on the streets of Venezuela, but the situation is evident at first sight. There has been a dramatic increase in the abandonment of children in the country, above all by mothers, though many report a total absence of the father. The youngsters on the streets are happy when they are given food but their greatest joy is when they receive money, because then they run off to buy the drugs that give them a reprieve from this world. Barefoot and unprotected, many have injured hands and feet from nails and glass, while others have been hit by cars and lived to tell the tale. Children and teens are often seen sleeping so soundly on park benches or just on sidewalks that horns honking, dogs barking and passers-by talking don't wake them up. (News4Europe: http://www.news4europe.eu/6350_world/5863769_countless-youngsters-now-live-on-the-streets-of-caracas.html)

 

Magnitude 5.5 earthquake hits Venezuela

A magnitude 5.5 earthquake shook Venezuela on Thursday, according to the United States Geological Survey. The quake was recorded shortly before 5 a.m. about 2 miles northeast of San Diego, Venezuela, and had a depth of about 6 miles, according to the USGS. The agency first reported the magnitude of the quake as 5.6, but later adjusted the magnitude to 5.5. Another quake, of magnitude 5.0, was recorded about 25 minutes later in the same area, the USGS reported. There have so far been no reports or injuries or damages from the earthquakes. (Channel3000: https://www.channel3000.com/weather/magnitude-56-earthquake-hits-venezuela/953146175)

 

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.

 

December 13, 2018

Oil & Energy

CRYSTALLEX again threatens Venezuela’s crown jewel CITGO

Venezuela is facing the possible unraveling of a pair of billion-dollar settlements aimed at protecting the cash-strapped country’s U.S.-based CITGO Petroleum Corp from seizure by creditors. Canadian miner CRYSTALLEX has accused Venezuela of breaching a US$ 1.4-billion settlement agreement as PDVSA continued to try and overturn a court order that allowed CRYSTALLEX to take control of the stock of CITGO’s parent company. This is the latest blow to Citgo, PDVSA’s precious downstream business in the U.S. that the company—and Caracas through it—has tried to keep at all costs. What’s more, CRYSTALLEX had already hired banks to organize a forced sale of CITGO stock in order to get its US$ 1.4 billion, a lawyer for the Canadian mining company said, but the process has been suspended because Venezuela wasted no time in disputing Crystallex’ accusation. The crux of the matter is the ownership of CITGO. While it is a unit of PDVSA, PDVSA is a state-owned company, according to a court ruling from earlier this year. The ruling by Chief Judge Leonard P. Stark was unique: government assets such as CITGO’s parent, PDVSA, are as a rule protected from lawsuits targeting a state. Yet in Stark’s ruling, the judge said that Venezuela had blurred the lines between the government and the state oil firm, with a military official at the helm of PDVSA. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/Crystallex-Threatens-Venezuelas-Crown-Jewel-Citgo-Again.html; Reuters, https://www.reuters.com/article/us-venezuela-pdvsa-crystallex/venezuelas-deals-to-shield-citgo-from-creditors-now-in-doubt-idUSKBN1OA2M9)

 

Venezuela oil price rises for first time in 2 months

The price Venezuela receives for its mix of medium and heavy oil rose for the first time since October. According to figures released by the Ministry of Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending December 7 rose to US$ 54.80, up US$ 1.20 from the previous week's US$ 53.60.  According to Venezuelan government figures, the average price in 2018 for Venezuela's mix of heavy and medium crude for 2018 which Caracas now prices in Chinese Yuan (426.36) is now US$ 61.96. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471320&CategoryId=10717)

 

Jailed ex-Venezuela oil minister Nelson Martinez dies in prison

Nelson Martinez, a former Venezuelan oil minister imprisoned over corruption allegations, has died of health complications, according to the prosecutor's office. The chemist, who also served as president of state oil firm PDVSA and its United States subsidiary CITGO Petroleum, was arrested on November 30 last year as part of a sweeping fraud probe, four days after President Nicolas Maduro removed him from his position. Martinez had been transferred to a military hospital from prison because of kidney problems, two sources familiar with the matter told Reuters news agency earlier. He had a heart attack while receiving dialysis, they said. Rafael Ramirez, a former state oil firm chief and opponent of the country's president, had earlier announced Martinez's death and blamed Maduro. Prosecutors accused both Martinez and Eulogio del Pino, another former oil minister and PDVSA president, of being part of a corruption network in the country's oil sector, with Ramirez at the helm. Martinez was jailed after the country's top prosecutor said he allowed a poor refinancing deal for CITGO to go ahead without government approval. He had yet to appear before a judge at the time of his death, and the date for his preliminary hearing was pushed back several times, Reuters reported. His lawyers began asking authorities months ago for Martinez to be granted house arrest, citing his ill health, a source told the news agency. Martinez is the latest in a series of people to die in Venezuelan custody. (Al Jazeera: https://www.aljazeera.com/news/2018/12/jailed-venezuela-oil-minister-nelson-martinez-dies-181213022300514.html)

 

PDVSA procurement official guilty in Venezuela bribery scheme in Texas

A former procurement officer of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), pleaded guilty Monday for his role in a scheme to obstruct an investigation relating to bribes paid by the owner of U.S.-based companies to Venezuelan government officials in exchange for securing additional business with PDVSA and payment priority on outstanding invoices. Alfonso Eliezer Gravina Munoz (Gravina), 56, of Katy, Texas, who previously worked for PDVSA in Houston, Texas, pleaded guilty before U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas in Houston to one count of conspiracy to obstruct an official proceeding. Gravina is scheduled to be sentenced on Feb. 19, 2019 before Judge Gary H. Miller. He was charged by indictment on Nov. 15. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471236&CategoryId=10717)

 

Commodities

Maduro regime says it will reopen GOODYEAR plant, probe bosses

Venezuela’s government said on Tuesday it would investigate GOODYEAR Tire & Rubber Co’s local management and re-start operations at its factory, which the U.S. company closed because of deteriorating economic conditions.

On Monday, Goodyear said its Venezuelan tire plant had become “impossible” to maintain because of plummeting demand for consumer goods, the difficulty of importing raw materials, and U.S. sanctions restricting financial transactions. In a statement released by state television, President Nicolas Maduro’s administration said it would guarantee the jobs of the factory’s 1,160 workers and had started proceedings to re-start operations. (Reuters, https://www.reuters.com/article/goodyear-tire-venezuela/venezuelan-government-says-it-will-reopen-goodyear-plant-probe-bosses-idUSL8N1YG60I)

 

Economy & Finance

Maduro regime is forcibly converting pension balances to the Petro

Venezuela has reportedly begun converting pensioners’ monthly payments into its controversial cryptocurrency, the Petro. The government has recently been taking the bolivars (the country’s current fiat currency) paid to its elderly residents and automatically swapping them for Petros. Normally, a pensioner would receive their monthly sum in bolivars, shift the funds to a bank account, and withdraw the fiat from a local branch, the blog explained. However, the government apparently converted residents’ bolivars to Petros after sending the funds. Notably, this conversion happened after the government first sent the payments in fiat to residents’ web wallets, meaning the Venezuelan government sent pensioners their funds, withdrew them and replaced with an equivalent value of Petros. How pensioners would be able to use their unrequested Petros is unclear, as they are not generally accepted. However, it seems to be possible to convert them back to bolivars via a complex process, according to the post. To make matters worse, the value of the Petro relative to the bolivar is unstable, rising from 9,000 to more than 15,000 over the course of a few weeks. While the nation claims to have successfully raised hundreds of millions of dollars – potentially as much as US$ 5 billion –selling the token, it is unclear who has invested in it or how much has actually been raised. Residents are already required to purchase passports using the cryptocurrency, and the nation’s salary systems are also expected to begin using the Petro. More recently, Maduro said Venezuela will sell its oil for the Petro, rather than the U.S. dollar, to decrease the dollar’s importance in the oil market. (Coindesk; https://www.coindesk.com/report-venezuela-is-forcibly-converting-pension-balances-to-the-petro)

 

Politics and International Affairs

Russia to withdraw jets from Venezuela after diplomatic spat with U.S.

Two Russian bombers that flew to Venezuela on Monday as a gesture of support for socialist President Nicolás Maduro will leave on Friday and return to Russia, the White House said, following a diplomatic spat over the visit. White House spokeswoman Sarah Sanders said in a statement Wednesday the planned departure came after the Trump administration spoke with Russian officials. “We have spoken with representatives of Russia and have been informed that their military aircraft, which landed in Venezuela, will be leaving on [December 14] and going back to Russia,” White House press secretary Sarah Sanders told Reuters. (The Wall Street Journal: https://www.wsj.com/articles/russia-to-withdraw-jets-from-venezuela-after-diplomat-spat-with-u-s-11544646013; Reuters, https://www.reuters.com/article/us-venezuela-russia-airforce/russian-nuclear-capable-bomber-aircraft-fly-to-venezuela-angering-u-s-idUSKBN1OA23L; https://www.reuters.com/article/us-venezuela-russia-airforce-kremlin/kremlin-calls-u-s-criticism-of-russian-military-flights-to-venezuela-wrong-idUSKBN1OA0QK; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471270&CategoryId=10717)

 

OAS expresses 'greatest concern' over arrival of Russian military planes in Venezuela

The Organization of American States (OAS) has expressed the “greatest concern” about the arrival of nuclear-capable Russian aircraft in Venezuela. In a statement released on December 12, the OAS General Secretariat said it “takes note with the greatest concern of the news coming from Venezuela about the possibility that aircraft capable of using nuclear weapons from Russia are in its territory.” It said the presence of the foreign military mission violates the Venezuelan Constitution “because it has not been authorized by the National Assembly, as required [by the constitution].” “Therefore, we consider such an act harmful to Venezuelan sovereignty,” added the OAS, which consists of all 35 independent nations of the Americas, including the United States. (Radio Free Europe: https://www.rferl.org/a/russia-bombers-venezuela-oas-united-states-pompeo/29653402.html)

 

Russia eyes Venezuela base for aircraft - Nezavisimaya Gazeta

Russia wants to deploy strategic aircraft at a Venezuelan airbase in the Caribbean Sea south-east of the United States, the Nezavisimaya daily newspaper cited unnamed sources as saying on Wednesday. The same sources allegedly said wanted to deploy strategic aircraft to a military airfield on the island of La Orchila off the coast of Venezuela. Venezuela’s laws do not allow it to host foreign military bases, but it can temporarily host foreign military planes, the newspaper wrote. (Reuters, https://www.reuters.com/article/media-russia-eyes-venezuela-base-for-air/media-russia-eyes-venezuela-base-for-aircraft-nezavisimaya-gazeta-idUSL8N1YH1KC)

 

Maduro regime calls US Criticism of military cooperation with Russia “cynical”

Venezuelan Foreign Minister Jorge Arreaza said US criticism of his country’s military cooperation with Moscow was cynical. Arreaza was responding to a post on Twitter by US Secretary of State Mike Pompeo in which he called the Russian-Venezuelan cooperation that of “two corrupt governments.” In response, Arreaza said that it was unusual for the US to question Venezuela’s right to cooperate on defense and security with other countries, above all after US President Donald Trump publicly threatened to intervene militarily in Venezuela. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471307&CategoryId=10717; AVN, http://www.avn.info.ve/contenido/venezuela-qualifies-cynical-pompeo039s-declarations-about-combined-military-exercises)

 

Senators urge Trump to recognize National Assembly as the only legitimate institution here

U.S. Senators Marco Rubio (R-FL) and Bob Menendez (D-NJ) today urged President Trump to once again denounce Nicolás Maduro as the illegitimate President of Venezuela and to recognize the National Assembly as the country’s only remaining democratic institution. Under Article 231 of the Venezuelan constitution, "The candidate elected will take possession of the role of President of the Republic on the 10th of January of the first year of its constitutional period, by oath to the National Assembly." Given the undemocratic and fraudulent elections of May 20, 2018, organized by the illegitimate National Constituent Assembly, starting on January 10, 2019 Venezuela’s democratically elected Congress will assume the leadership of the nation. “The regime of Nicolás Maduro, however, has turned Venezuela away from the path of democracy and down the path of dictatorship.  We therefore request that you condemn the Maduro regime’s rule as illegitimate, and formally recognize the Venezuelan National Assembly as the only legitimate democratic institution remaining in the country’s national government.” (US Senate: https://www.rubio.senate.gov/public/index.cfm?p=Press-Releases&id=DA9DE421-1B74-4AF1-9A54-9C5D4DB28ED7)

 

Maduro claims: “John Bolton was ordered to kill me”; slams incoming Brazilian government

President Nicolas Maduro has claimed the U.S. is scheming to kill him and depose his populist left-wing government, accusing National Security Advisor John Bolton of being the plot’s point man. Speaking to journalists at the presidential palace in the capital Caracas, the 56-year-old claimed the U.S. intends to send American troops into Venezuela as part of its plan to install a more amenable government, the BBC reported. Maduro provided no evidence for his assertion. “John Bolton has been assigned with the job organizing my assassination, deploying foreign troops and imposing a transitional government in Venezuela,” Maduro declared. He warned that Venezuelans were loyal to their leaders and said they are prepared to fight back with the help of “friendly countries.” Maduro also lashed out at Brazil’s incoming president, Jair Bolsonaro, and his vice-president, Hamilton Mourão, who he claimed was obsessed with the idea of invading Venezuela. “[This guy] has the face of a madman,” Maduro said of Mourão. “Saying a Brazilian military force is going to enter Venezuela is crazy talk.” (NEWSWEEK: https://www.newsweek.com/john-bolton-kill-nicolas-maduro-venezuela-assassination-donald-trump-russia-1257180; The Guardian: https://www.theguardian.com/world/2018/dec/12/venezuela-nicolas-maduro-assassination-attempt-white-house-ultra-right-locos; Reuters: https://www.reuters.com/article/us-venezuela-politics/venezuelas-maduro-accuses-u-s-of-plotting-to-assassinate-him-idUSKBN1OB29Y)

 

Venezuela ratified commitment to deepen cooperation with Unicef

President Nicolás Maduro has confirmed Venezuela's commitment to deepen cooperation ties with the United Nations International Children's Emergency Fund (UNICEF), “to guarantee our children and adolescents a prosperous future," he said in a social network. (AVN, http://www.avn.info.ve/contenido/venezuela-ratified-commitment-deepen-cooperation-unicef)

 

Arreaza claims Colombia magnifies Venezuelan migration to obtain resources

The Maduro regime has claimed that the government of Colombia uses and magnifies the migration of Venezuelans to that country, to continue obtaining financial resources. Through his Twitter account, Foreign Minister Jorge Arreaza criticized that the foreign policy of the Colombian government is to obtain resources from international organizations to address a supposed Venezuelan migration crisis.  (AVN, http://www.avn.info.ve/contenido/venezuela-condemns-colombia-magnifies-venezuelan-migration-obtain-resources)

 

German journalist Billy Six 'charged with espionage' in Venezuela

German reporter Billy Six, 32, is being held in Venezuela, the German foreign ministry has confirmed. Venezuelan rights group Espacio Público says Mr. Six, who writes for right-wing newspaper Junge Freiheit, has been charged with espionage and rebellion. Relatives say he was arrested more than three weeks ago while reporting on Venezuela's economic crisis and the mass migration it has triggered. Diplomatic officials have reportedly not been allowed to see him. Rights groups say he is being held in the infamous Helicoide prison in the capital, Caracas, which has seen a number of prison riots this year. Mr. Six was in Venezuela "investigating drug trafficking activities, smuggling of fuel and strategic goods, human trafficking and even the exodus of Venezuelans" Gerardo Morón of Venezuelan rights group Espacio Público said. His father, Edward Six, said he had been arrested in his hotel room on 17 November. According to Edward Six, the Venezuelan authorities are using a photo his son took of President Nicolás Maduro at a rally in Caracas as evidence that he "violated a security zone". The journalist's father says the photo was taken from behind a security perimeter. (BBC News: https://www.bbc.com/news/world-latin-america-46553284)

 

PODEMOS chief grilled in Spain’s Senate over Venezuela financing links

The leader of the anti-austerity party PODEMOS, Pablo Iglesias, appeared on Thursday before a Senate committee investigating party financing. The session, which was convened by the conservative Popular Party (PP), was aimed at shedding light on alleged financial links between the leftist political group and Venezuela. “If the question is whether financing for PODEMOS came from the Venezuelan government, then the answer is no,” Iglesias stated during a testy question-and-answer session, which was being directed by Luis Aznar, a PP senator and spokesperson in Spain’s upper house of parliament. The PP senator tried to bolster his accusations against Podemos by showing videos from a Venezuelan TV channel during which the founder members of the Spanish party are mentioned, as well as in which Iglesias is seen praising former Venezuelan President Hugo Chávez. “These are personal opinions,” he said of the recordings. “I don’t agree with some of the things I said in the past. The current political and economic situation of Venezuela right now is dire. To rectify in politics is a good thing.” The tensest exchange came when Aznar alluded to “evidence that is in the hands of INTERPOL”, in relation to Venezuelan financing that PODEMOS is alleged to have received via the CEPS foundation (Center of Political and Social Studies). The senator was referring to funds of more than €7 million received by the foundation – at which PODEMOS leaders, including Iglesias, worked – between 2003 and 2011. While CEPS was indeed engaged in consultancy work for the Venezuelan government, Iglesias has always denied that any funds it received were used to set up PODEMOS. (El País: https://elpais.com/elpais/2018/12/13/inenglish/1544711332_269112.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.