July 09, 2019

Oil & Energy

Squeezed by sanctions, Venezuela sells oil to tiny Turkish firm

With U.S. sanctions blocking Venezuela from selling oil to the United States, state-owned energy firm PDVSA has turned to several little-known buyers that include a tiny Turkish company with no refineries but ties to Nicolas Maduro’s regime. U.S. sanctions have driven away many customers. PDVSA’s exports have slumped by more than a fifth since sanctions were imposed. Its biggest buyers today are Chinese and Indian companies. Directors at a March 14 meeting of Maduro’s PDVSA board temporarily waived some requirements for new customers or suppliers, including that of having at least two years’ experience in the oil industry. In the wake of the changes, a Turkish company called Grupo IVEEX INSAAT started buying Venezuelan oil in April. Istanbul Chamber of Commerce records show that IVEEX INSAAT was formed less than a year ago with capital of just US$ 1,775 and listed “residential construction” as its main activity. It was one of only five firms that loaded tankers to take Venezuela’s upgraded crude - among its most valuable oil - from April through June, the documents showed. IVEEX loaded four cargoes of Venezuelan crude and products in April - equivalent to just under 8% of Venezuela’s oil exports - and nothing in May or June, according to PDVSA documents. Turkish corporate records show IVEEX INSAAT is owned by Miguel Silva, a Venezuelan businessman who heads the Caracas-based Venezuelan Exporters’ Chamber and served as a housing ministry commissioner in Maduro’s administration. Silva registered IVEEX INSAAT with a Turkish partner named Erhan Kap, an Istanbul tour guide, on Sept. 27, 2018, just a week after Maduro visited Istanbul. IVEEX reportedly has agreed to deliver refined products to Venezuela in exchange for receiving crude. With its refinery network crippled by maintenance issues, the OPEC nation has struggled with severe fuel shortages in recent months. The two other companies that only began chartering tankers to take PDVSA’s oil after sanctions hit are Panama-registered MELAJ Offshore Corp and Sahara Energy, a unit of Nigeria-based Sahara Group. The two loaded PDVSA oil cargoes shortly after the sanctions were announced. (REUTERS: https://www.reuters.com/article/us-venezuela-oil-turkey/squeezed-by-sanctions-venezuela-sells-oil-to-tiny-turkish-firm-idUSKCN1U324M)

 

OPEC wants quick resolution to tensions between US and Iran, Venezuela

OPEC has asked on Monday for a timely settlement to the tensions that have flared up between the United States and Iran and Venezuela. Iran and Venezuela, both founding members of OPEC, are both exempt once again from the production cut extensions that the cartel announced last week and will remain exempt for as long as they remain under sanction. Both Iran’s and Venezuela’s production woes have contributed significantly to the cartel’s over compliance to the group’s production cut quota, with Iran’s crude production falling from an average of 3.813 million barrels per day in 2017 to 2.370 million barrels per day in May 2019, and Venezuela’s crude production falling from 1.911 million bpd on average in 2017, to an abysmal 741,000 bpd in May 2019. But while the two countries combined seemingly did OPEC a favor by taking more than 2.6 million barrels of crude oil per day out of the market within that time frame, the tensions in the Persian Gulf and the dire situation in Venezuela are creating a market that OPEC is finding it difficult to both predict and manage. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/OPEC-Wants-Quick-Resolution-To-Tensions-Between-US-And-Iran-Venezuela.html)

 

Amuay and Cardon refineries halted by blackout

Venezuela’s Amuay and Cardon refineries are halted following a blackout in the early morning hours, two oil industry sources with knowledge of the issue said on Sunday. The twin refineries together form the 955,000 barrel-per-day (bpd) Paraguana Refining Center, which has been operating well below capacity for years because of chronic operational problems that have been aggravated by Venezuela’s economic crisis. “Blackout in both refineries,” one employee who works in the complex wrote in a text message. “It’s going to be difficult to get the system back up.” (Reuters, https://www.reuters.com/article/refinery-operations-pdvsa-amuay/update-1-venezuelas-amuay-and-cardon-refineries-halted-by-blackout-sources-idUSL2N24802S)

 

CHEVRON is playing a long game in Venezuela’s oil fields

Donald Trump may have slammed Venezuela with sanctions in an effort to change the regime of President Nicolás Maduro, but the country’s energy industry has an unlikely ally: CHEVRON Corp. Despite the U.S. administration’s push to disrupt the financial resources available to Venezuela’s leadership, the second-biggest U.S. oil company is working to bolster one of the Maduro government’s chief economic pillars—its ability to produce crude oil. CHEVRON is helping tap four fields in the country while testing new injection technologies to maximize production in one. CHEVRON is also helping pay for supplies, expenses, and even health care for workers at state-owned oil producer PDVSA to keep the crude flowing. CHEVRON’s actions are an attempt to play the long game in economically ravaged Venezuela. If Maduro retains power, CHEVRON will keep its tenuous—but still profitable—foothold in Venezuela. If he’s forced out and U.S. sanctions end, the company could be first in line to gain from the country’s vast geologic riches. The gamble puts CHEVRON in the same group as state-controlled producers from Russia and China that have been supportive of the Maduro regime—and potentially at odds with its home country. The company is working under a Department of the Treasury waiver of U.S. sanctions against Venezuela that expires on July 27. A decision by the U.S. government not to renew the waiver could cripple the production of more than 200,000 barrels a day at the four projects Chevron is keeping afloat, even though most of that production goes to PDVSA. And it could lead Maduro to hand CHEVRON’s stakes in these fields to other explorers.  Positioning itself to outlast Maduro won’t be easy. Last year two Chevron employees were arrested and held for seven weeks for reasons neither the government nor the company disclosed. Still, the oil producer continues to work with the government to keep its operation intact. That could mean braving Trump administration pressure and weathering the worsening humanitarian crisis, but the payoff might be worth the risks. “Whatever government that is coming in will be dealing with very diverse issues and doing it with very little cash in the bank, and that presents a unique opportunity,” says Schreiner Parker, vice president for Latin America at consulting firm RYSTAD Energy. “In the medium to long term with regime change, we believe Venezuela will become very investor-friendly, out of necessity more than anything.” (Bloomberg: https://www.bloomberg.com/news/articles/2019-07-09/chevron-is-playing-a-long-game-in-venezuela-s-oil-fields)

 

Economy & Finance

JP Morgan to cut Venezuela weight to zero in key indexes over five months

JP Morgan will reduce the weight of Venezuela's sovereign and PDVSA bonds to zero in its widely tracked indexes, the bank said on Tuesday, phasing them out over five months starting on July 31. Venezuela's weight was 0.5%, 0.9% and 1.2% in the EMBI Global Diversified, EMBI Global and EMBI+ indices, respectively, it added. As a result of dialing down the weighting, JP Morgan said the headline EMBIGD yield and spread were estimated to compress by about 45 basis points. JP Morgan said it could open another index watch process in "the event of any favorable official guidance around easing of trading restrictions or consistent, observable improvements in liquidity and replicability of Venezuela bonds." (NASDAQ: https://www.nasdaq.com/article/jp-morgan-to-cut-venezuela-weight-to-zero-in-key-indexes-over-five-months-20190709-00584)

 

Maduro regime says U.S. sanctions hit debt refinancing, oil sales

Nicolas Maduro’s Vice foreign minister William Castillo also Venezuela charged on Friday that U.S.-led sanctions had stopped foreign debt refinancing, blocked vital food and medicine imports, and cost billions of dollars in lost oil assets. Maduro’s government says Venezuela is the victim of a U.S. plot to topple him, eradicate socialism and hand the world’s largest oil reserves to multinationals. (Reuters, https://www.reuters.com/article/us-venezuela-un/venezuela-says-u-s-sanctions-hit-debt-refinancing-oil-sales-idUSKCN1U014B)

 

Bitcoin trading activity goes ballistic in Venezuela as rule of law erodes

The worse the political, social, and economic conditions in Venezuela get, the more that residents suffering under the Maduro regime pile into Bitcoin. According to Coin Dance, more than 47 billion Venezuela bolivars were traded against Bitcoin in the first week of July. This broke a previous record that had been set in mid-June. While the rising amounts of bolivars being spent on buying Bitcoin could be attributed to the fact that the Venezuelan currency is perpetually weakening, it also coincides with the price of the flagship cryptocurrency appreciating considerably in the last couple of weeks. As of April, the inflation rate in Venezuela was estimated to have hit 1,300,000%. Mid last month, the country announced a 50,000-bolivar bill designed to ease business transactions. Maduro will have released new banknotes for the second time in less than a year. Still, Venezuela ranks among the top 30 countries whose national currencies are the most traded for Bitcoin, according to Coinhills. While BTC/VES volumes have been on a steady increase since the beginning of 2018, Venezuela now has a national cryptocurrency, the Petro, which is competing for attention with Bitcoin. With Venezuelans already witnesses to how government-issued money can quickly lose its purchasing power in the face of hyperinflation, this move will only be beneficial to Bitcoin: The Maduro regime may be force-feeding the Petro on the people, but that will likely just serve as a gateway drug to Bitcoin. (CCN: https://www.ccn.com/crypto/bitcoin-trading-volume-venezuela/2019/07/08/)

 

Politics and International Affairs

Guaido announces fresh talks with Maduro regime

Venezuelan opposition leader Juan Guaido on Sunday announced fresh talks with the government of President Nicolas Maduro. Guaido, who became acting president earlier this year, said the Norway-brokered talks aim "to establish a negotiation on the end of the dictatorship," referring to Maduro's regime. "The Venezuelan people, our allies and the world's democracies recognize the need for a truly free and transparent electoral process that will allow us to surpass the crisis and build a productive future," he said. Guaido is hoping the negotiations eventually lead to Maduro stepping down and "free elections with international observers." In May, delegations representing both parties met in Oslo under Norwegian mediation. However, the talks have yet to provide a path forward for the political impasse here. But Venezuela's opposition is wary of talks with Maduro's regime. Previous attempts to end the country's political crisis have failed, with critics saying they have only served to further solidify his rule. Norway which hosted the preliminary talks and is mediating the protracted process says the aim of the upcoming round of discussions in Barbados, is to move further forward towards a constitutional settlement. The opposition led by Juan Guaido wants a transitional government to replace the regime of Nicolas Maduro, and then free elections monitored by international observers. Guaido insists he`s the legitimate Interim President, recognized by more than fifty nations all around the world.  While Maduro states he`s the democratically elected President. (DW: https://www.dw.com/en/venezuelas-guaido-announces-fresh-talks-with-maduro-regime/a-49507748; Vatican News: https://www.vaticannews.va/en/world/news/2019-07/venezuela-cardinal-government-opposition-dialogue.html; Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-opposition-says-it-will-meet-maduro-envoys-in-norway-mediated-talks-idUSKCN1U20TF; https://www.reuters.com/article/us-venezuela-politics-norway/venezuela-talks-to-resume-this-week-norway-idUSKCN1U30GU)

 

Barbados welcomes being the site for talks as CARICOM leverages ties with Caracas

Barbados Prime Minister Mia Amor Mottley Monday welcomed plans by both sides to hold talks in Barbados. “Since January, the government of Barbados along with other CARICOM governments has made it clear that the time for dialogue is never over. As a zone of peace, we will want to see a very peaceful resolution to the problems in Venezuela,” Mottley told reporters. Caribbean Community (CARICOM) leaders who have in the past adopted a position of non-interference and non-intervention in the affairs of this country, last week re-affirmed that position during their annual summit held in St. Lucia. Mottley made it clear that apart from hosting the meeting, Barbados will be playing no major role in the discussions. “This is a matter that requires the utmost patience, so it is not something that you should be asking me or anybody about on a daily basis, let the people talk. When you have deep divisions, it takes time and I have every confidence in the government of Norway being able to do what CARICOM has wanted done since January,” she said. Caribbean nations that used to rely on cheap Venezuelan oil are now hoping to leverage their ties with Caracas to help broker a negotiated settlement to the political crisis there. "This issue is one for the Venezuelans to work out," Trinidad´s prime minister Keith Rowley said. Norway's prime minister Erna Solberg was a guest at the CARICOM summit, and the group is playing the role of an honest broker in the Venezuelan crisis, St. Kitts-Nevis prime minister Timothy Harris said. (Caribbean Broadasting Corporation: http://www.cbc.bb/wordpress/2019/07/09/pm-pleased-with-plans-for-negotiations-to-end-venezuela-crisis/; Argus Media: https://www.argusmedia.com/en/news/1935802-caribbean-sets-stage-for-thorny-venezuela-talks)

 

Maduro 'optimistic' as crisis talks resume

Nicolás Maduro said he was "optimistic" as talks between his regime and the opposition to resolve the country's political crisis resumed on Monday. Preliminary talks held in May in Oslo petered out without an agreement. Maduro said a six-point agenda was being discussed at the meeting which is being hosted by Barbados. He did not give further details. The Norwegian foreign ministry is again acting as a mediator, as it did at the previous meeting in Oslo, but has so far only commented to confirm the meeting was taking place. Maduro revealed that Monday's meeting lasted five hours. He also said he thought "a path to peace" could be found. Just a week ago Guaidó ruled out a return to negotiations, citing as a reason the death in custody of an army captain whose body showed signs of torture. Guaidó has not said why his stance has changed. Some in the opposition say the talks are a ruse by the government to buy itself more time in power. On Friday Maduro said he doesn’t think it necessary to hold presidential elections in the country right now. "What does the people of Venezuela need today? Elections? I don’t think so," he told journalists. "The people of Venezuela needs economic revival, peace and constitutional stability. And it is necessary to reelect the National Assembly for that," he said. "The opposition wants no elections," he said. "If we say elections will be held in 30 days, they will begin inventing reasons to dodge them." (BBC: https://www.bbc.com/news/world-latin-america-48904193; TASS: https://tass.com/world/1043923)

 

Venezuela's rule of law has crumbled under Maduro, international legal group reports

The rule of law has crumbled in Venezuela under the regime of Nicolas Maduro which has usurped the powers of the legislative and judicial branches, an international legal watchdog said on Monday. The International Commission of Jurists (ICJ) called on Venezuelan authorities to reinstate democratic institutions as part of a solution to the political, economic and humanitarian crisis engulfing the OPEC member. The government and a compliant Supreme Court effectively stripped the National Assembly of most powers after the opposition won a majority in 2015 elections. Lawmakers loyal to Maduro generally do not attend the sessions but go to meetings of the Constituent Assembly, a legislative body that meets in the same building. The Constituent Assembly, created in a 2017 election boycotted by the opposition, is controlled by the ruling Socialist Party and its powers supersede the National Assembly. Sam Zarifi, ICJ secretary-general, presented its latest report on Venezuela: “No Room for Debate”. “The focus of this report is on the usurpation of the authority of the legislative by the government in Venezuela. This comes after the judiciary was taken over,” he told a news briefing. The Constituent Assembly was “formed improperly and illegitimately” and has gone far beyond its stated role, Zarifi said, adding: “In fact it seemed to do everything but really discuss a new Constitution”.  “Addressing the problem of the National Constituent Assembly is a crucial step in any political solution to the crisis that has gripped Venezuela,” ICJ’s Zarifi said, urging the government to engage with the opposition-led legislature. (NBC News: https://www.nbcnews.com/storyline/venezuela-crisis/venezuela-s-rule-law-has-crumbled-under-maduro-international-legal-n1027406)

 

Poll shows 64,6% of Venezuelans would vote in any new presidential election

A recent poll by the Catholic University’s Center for Political Studies and Government, along with DELPHOS, shows that 64.6% of Venezuelans are willing to vote if new presidential elections are called; and the number goes up to 70.2% if Nocolás Maduro resigns and stays out of the process, the National Elections Council is changed and there are international observers. An opposition candidate would get 67% of all votes (12.9 million) and a regime candidate would receive 33% (6.3 million). Another 15.1% of those polled indicated they might vote. More in Spanish: (El Universal, http://www.eluniversal.com/politica/44895/646-de-los-venezolanos-votarian-en-elecciones-presidenciales)

 

Venezuelans deserve better life, free from fear, UN Human Rights Chief says

The United Nations High Commissioner for Human Rights said on Friday that Venezuelans deserve a better life that is free from fear and whereby they have access to food, water and health services during the presentation of her report on Venezuela before the Human Rights Council. “The fate of more than 30 million Venezuelans rests on the leadership’s willingness and ability to put the human rights of the people ahead of any personal, ideological or political ambitions,” Michelle Bachelet said during presentation of her report in Geneva. The report accuses the Nicolas Maduro regime of grave human rights violations and documents, among other serious incidents, more than 6,800 extra-judicial killings by the Venezuelan armed forces between January 2018 and May 2019. These killings, “should be fully investigated, with accountability of perpetrators, and guarantees of non-recurrence,” added Bachelet. The UN High Commissioner for Human Rights also denounced a pattern of torture reports during arbitrary detentions and mentioned the recent death of Rafael Acosta, a retired navy captain, who died in custody. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2480704&CategoryId=10717)

 

Maduro slams UN human rights report, says it's full of lies

Nicolás Maduro on Monday said he had demanded the rectification of what he described as lies included in the latest United Nations report on human rights in this country. He also said that the United Nations High Commissioner for Human Rights and former president of Chile, Michelle Bachelet, had "made a wrong call" with the report's outcome. (EFE: https://www.efe.com/efe/english/world/venezuela-s-maduro-slams-un-human-rights-report-says-it-full-of-lies/50000262-4018799)

 

Venezuelan bishops condemn death of naval captain while in custody, other atrocities

The Venezuelan bishops' justice and peace commission have condemned the death in custody of Rafael Acosta Arévalo, a naval captain who was arrested over an alleged assassination plot against president Nicolas Maduro. Acosta's lawyer alleges the officer had been tortured while in custody. Two members of Venezuela's military counterintelligence agency have been charged in relation to Acosta's death. The bishops also protested that police had allegedly disfigured and left blind Rufo Chacón Parada, a youth, as he was demonstrating about the lack supplies in the country. “The Venezuelan state is responsible. We will not consent to the manipulation, dissimulation and downplaying of these grave incidents,” the bishops' justice and peace commission stated July 4. The bishops said that “the forced disappearance, torture, cruel, inhuman or degrading treatment, excesses committed by the police … against Venezuelans are practices that have taken hold in the military and police corps, and are occurring on an ongoing basis, like a secret that cries out in our consciences.” “Silence is not an option in face of so much outrage,” the bishops said. The bishops noted that the men charged in relation to Acosta's death, Lt Ascanio Tarascio and Sgt Esteban Zarate, are 22 and 23, and asked: “This is the generation the armed forces are passing the baton to? Who taught these young men how to do so much harm to their brothers? What are the responsibilities of their superiors in the chain of command in these institutions?” They emphasized that “these young perpetrators are also victims of a system that has allowed this moral and spiritual degradation in our country.” In addition, a Venezuelan Cardinal is accusing the Maduro regime of intimidation and has reiterated his appeal to Nicolas Maduro to engage in dialogue. In an interview with the Pontifical Foundation ‘Aid to the Church in Need’, Archbishop Baltasar Porras of Merida, apostolic administrator of Caracas and President of Caritas Venezuela, shone the light on the limitations and intimidation perpetrated by the government against Church officials and organizations. He decried the fact that those who are bringing aid to the impoverished population and even parishes are continuously under pressure to stop their work.  (Catholic News Agency: https://www.catholicnewsagency.com/news/venezuelan-bishops-condemn-death-of-naval-captain-while-in-custody-74364; Vatican News: https://www.vaticannews.va/en/world/news/2019-07/venezuela-cardinal-government-opposition-dialogue.html)

 

Venezuelan journalist Braulio Jatar conditionally released, barred from leaving country

Venezuelan online and radio journalist Braulio Jatar was formally released from house arrest today after receiving official notification from a criminal court in his home state of Nueva Esparta. As mandated by the court, Jatar - who was charged but not tried for money laundering -- is barred from leaving Nueva Esparta and is required to present himself before that court every 15 days, according to his statement. Jatar's release was first announced by U.N. High Commissioner for Human Rights Michelle Bachelet on July 5, according to press reports. According to the reports, Bachelet had requested the release of Jatar and other high-profile prisoners during her June visit to Venezuela. The news came after the U.N. Human Rights Council held a debate on Bachelet’s report of a visit to Venezuela in June. The report accused Venezuelan security forces of sending death squads to murder young men but a vice minister rejected that in a speech to the Geneva forum on Friday. “The welcome releases of 62 detainees then (in June), with a further 22 – including journalist Braulio Jatar and judge (Maria) Lourdes Afiuni – set free yesterday and the authorities’ acceptance of two human rights officers in the country, signify the beginning of positive engagement on the country’s many human rights issues,” Bachelet said. (Committee to Protect Journalists: https://cpj.org/2019/07/venezuelan-journalist-braulio-jatar-conditionally-.php; Reuters, https://www.reuters.com/article/us-venezuela-un-prisoners/venezuela-releasing-judge-journalist-20-students-u-n-idUSKCN1U016V)

 

US expresses concerns for wrongfully detained U.S. persons (CITGO 6) in Venezuela

The United States demands that the former Maduro regime release the wrongfully detained “CITGO 6” in Venezuela. These men are suffering serious health conditions and must be released immediately. Maduro loyalists continue to prevent the families and attorneys of American prisoners from assisting with basic access to food and medicine, without regard for mental health and general well-being of those detained. These affronts to basic dignity will not be ignored.  The Department of State continues to press Maduro’s representatives for their assurance of the safety and welfare of Americans wrongfully detained in Venezuela. (US Department of State: https://www.state.gov/concerns-for-wrongfully-detained-u-s-persons-citgo-6-in-venezuela/)

 

UN agencies welcome regional road map to help integrate ‘continuing exodus of Venezuelans’

A new road map adopted by Latin American and Caribbean countries, to help better integrate refugees and migrants from crisis-hit Venezuela into new host societies, drew a warm welcome from two UN agencies on Monday. UN refugee agency UNHCR, and the International Organization for Migration (IOM) lauded the joint declaration that agrees to reinforce cooperation, communication and coordination between the countries of transit and destination; strengthen measures against people-smuggling and trafficking; and protect the most vulnerable by combatting discrimination, xenophobia and sexual and gender-based violence. The road map was adopted late last week during the International Technical Meeting of the Quito Process, in the Argentine capital, Buenos Aires, with the participation of 14 Latin American and Caribbean governments, UN agencies, regional organizations, development banks and civil society The meeting highlighted the actions and efforts of the regional countries, not only in terms of reception, documentation and humanitarian assistance, but also in promoting access to health, education, employment, and housing on behalf of Venezuelan refugees and migrants. The Road Map of the Buenos Aires Chapter sets out specific actions on human trafficking, healthcare and for recognizing academic qualifications of Venezuelan professionals, as well as establishing information and reception centers. A so-called Information Card for Regional Mobility is a priority commitment, to complement and strengthen the documentation and registration processes at national levels where it exists or is being developed. According to data from national immigration authorities and other sources, the number of refugees and migrants from Venezuela around the world has now exceeded four million. (UN News: https://news.un.org/en/story/2019/07/1042041)

 

On Venezuelan Independence Day Maduro called for “dialogue” as Guaido slammed 'dictatorship'

Venezuela’s bitterly divided political factions held competing commemorations of the country’s independence day on Friday, with President Nicolas Maduro calling for dialogue and opposition leader Juan Guaido decrying alleged human rights violations by Maduro’s “dictatorship.” Speaking to a gathering of top military officials, Maduro reiterated his support for a negotiation process mediated by Norway between his socialist government and Guaido, the leader of the opposition-held National Assembly who argues Maduro’s 2018 re-election was a fraud. (Reuters, https://www.reuters.com/article/us-venezuela-politics/on-venezuelan-independence-day-maduro-calls-for-dialogue-as-guaido-slams-dictatorship-idUSKCN1U022E)

 

Maduro ratified General Padrino as Defense Minister

Nicolas Maduro on Sunday announced he will maintain Defense Minister General Vladimir Padrino in his post, following months of rumors that top military brass would be replaced after a failed uprising in April. The Trump administration identified Padrino among the top officials involved in negotiations with opposition leader Juan Guaido to create a transition government on April 30, in response to the country’s economic meltdown. Since then, General Padrino has publicly professed loyalty to Maduro along with the majority of the armed forces, which are seen as the main reason why Maduro held on to power despite a hyperinflationary collapse. (Reuters, https://www.reuters.com/article/us-venezuela-politics-military/venezuelas-maduro-ratifies-padrino-as-defense-minister-idUSKCN1U305G)

 

OP-ED: Will more talks that do not include the military resolve Venezuela’s crisis?

Representatives from Venezuelan President Nicolás Maduro’s government and the opposition are expected to meet this week in Barbados for another round of talks mediated by Norway. Previous discussions to end the country’s ongoing political crisis have ended in deadlock. The talks so far have involved two parties: Maduro’s government, which still controls state institutions largely due to military backing; and the opposition led by Juan Guaidó, who is recognized as Venezuela’s acting president by more than 50 countries. Guaidó, like many in the opposition, is skeptical of dialogue. Maduro’s critics see it as a stalling tactic. What to expect: Guaidó has demanded a solution this time, but the talks could again be limited by the two-party approach, said Moises Rendon, the associate director of the Americas program at the Center for Strategic and International Studies. “The new round of negotiations has a flaw that hasn’t been addressed in the last rounds: who is representing Maduro’s government and who is representing Guaidó’s government,” Rendon said. “I don’t think it’s going anywhere, because you don’t have the full representation of all the forces within the Maduro regime”—including the military.” Last week, the United Nations released a report alleging thousands of extrajudicial killings carried out by Venezuelan special forces over the past 18 months. “That will help on the leverage of the Guaidó side,” Rendon said. But it could have limited impact on this week’s negotiations. “The [U.N.] report did not go that far in terms of connecting the human rights violations they described to the Maduro government,” he added. “It’s not shedding light on who’s responsible.” (Foreign Affairs: https://foreignpolicy.com/2019/07/09/another-round-of-talks-for-venezuela-maduro-guaido-iran-europe-trump-uk-darroch/)

 

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.

 

November 24, 2016

International Trade

Maduro, Foreign Minister claims Venezuela remains in MERCOSUR

Foreign Minister Delcy Rodríguez says Venezuela will continue to preside pro tempore over the Common Market of the South (MERCOSUR). “Venezuela is neither leaving nor being expelled from MERCOSUR. We will never accept this kind of aggression against our Fatherland”, she tweeted in rejection of an announcement by Uruguay’s President Tabaré Vásquez and Paraguay’s Foreign Minister Eladio Loizaga, saying that Venezuela will be suspended from MERCOSUR if it has not complied with all the organization’s rules by December 1^st. President Nicolas Maduro said the group of MERCOSUR founding nations was applying “a sanction that does not exist”. Experts, however, report that the other 4 nations within MERCOSUR are applying the Vienna Convention on Treaty Rights in this case under the “pacta sunct servanda” clause that states that any treaty in force requires the parties to comply in good faith, which applies to international organizations. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/economia/2016/noviembre/22/176386=presidente-maduro-expreso-que-nadie-podra-sacar-a-venezuela-del-mercosur; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/politica/maduro--nadie-podra-sacar-a-venezuela-del-mercosur.aspx; El Mundo, http://www.elmundo.com.ve/noticias/economia/politica/aplican-convencion-de-viena-para-suspender-a-venez.aspx#ixzz4QpN3G8Ql; AVN; http://www.avn.info.ve/contenido/venezuela-ni-se-va-ni-expulsan-mercosur; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/rodriguez--venezuela-ni-se-va--ni-la-expulsan-de-m.aspx)

 

ECLAC estimates 26.1% drop in Venezuela’s exports in 2016

The UN Economic Commission for Latin America and the Caribbean (ECLAC) estimates a 5% drop in Latin American exports during 2016, and expects a slight recovery in 2017. Venezuela has experienced the worst contraction in the region: at 26.1% this year. More in Spanish: (El Carabobeño: http://www.el-carabobeno.com/cepal-exportaciones-america-latina-se-contraera-5-2016/)

 

Burnt petcoke cargo sets sail from Venezuela, exports resume

A vessel carrying Venezuelan petroleum coke whose load caught fire set sail late on Tuesday for Colombia, allowing exports from the terminal to resume after a three-week halt while authorities decided what to do with the ship. The PETROSANFELIX terminal where the vessel was stuck accounts for more than a third of the around 150,000 tons of petroleum coke that Venezuela can export per month. Utilities buy the product and mix it with coal to burn at power plants. The Top Trader, chartered by U.S. Koch Industries and carrying 22,000 metric tons of petroleum coke, sailed on Tuesday, according to Thomson Reuters vessel tracking data. The cargo was sailing for Cartagena, Colombia, a change from the original destination in Europe. Petroleum coke is a product derived from upgrading Venezuelan Orinoco belt's extra heavy oil into a crude more valuable for refiners. The coke is typically transported from production facilities to the terminals at a high temperature, but many customers do not accept loading the cargoes if they detect fire. Frequent outages and logistics problems have created an accumulation of millions of tons of petroleum coke at PDVSA's eastern terminals in recent years. Exports have also been affected in the past. After the Top Trader left the Petrosanfelix terminal, loading operations resumed at that facility, while other PDVSA ports were also loading petroleum coke this week, according to an independent report. (Reuters: http://www.cnbc.com/2016/11/23/reuters-america-burnt-petcoke-cargo-sets-sail-from-venezuela-exports-resume.html)

 

Customs impounds humanitarian shipment sent to CARITAS here

SENIAT customs authorities reported they have impounded 525 boxes of medicine and 92 boxes of nutrition supplement consigned to CARITAS Venezuela. They declared the cargo abandoned because it lacked permits, and consigned it to the Social Security Institute. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politica/seniat-declara-en-abandono-legal-cargamento-de-car.aspx#ixzz4Qv7xNPhP)

 

New currency bills reportedly have arrived at La Guaira port

Cipriana Ramos, President of the National Trade Association (CONSECOMERCIO) says the current currency scarcity could improve with the arrival of newly minted bills at La Guaira port. She said: “We were able to see a cargo that arrived at La Guaira on Tuesday and was strongly guarded by national security” More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Presumen-billetes-denominacion-llegado-Guaira_0_963503883.html)

 

Venezuela's iron and steel complex plans to raise US$ 54 million in exports in 2017

Venezuela's iron and steel complex expects to raise US$ 54 million next year for exports of industry and building materials, said Carlos Padilla, Planning Director of the complex. He told the government news agency that about 30,000 tons of finished products −including steel bars, beams, angles and fences, and more than 80,000 tons of base steel for billets. He said that Panama and Brazil, as well as other Caribbean nations, are the main destinations for the export of steel material. (AVN, http://www.avn.info.ve/contenido/venezuela039s-iron-and-steel-complex-plans-raise-54-million-exports-2017)

 

Oil & Energy

Maduro orders an “absolute restructuring” of PDVSA

President Nicolas Maduro has issued a decree ordering an “absolute restructuring” and “change of course” at state oil company PDVSA, to “defeat corruption and bureaucracy” within. He claimed there are “infiltrators” inside the Venezuelan oil industry, and that he will have “zero tolerance with corruption and treason”. He called on PDVSA President Eulogio Del Pino, who is also Oil and Mining Minister, work with the company workers in a group for “specific change policies” to “strengthen” the industry, and ordered an increase in production. Venezuela’s National Assembly last week voted to censure former PDVSA President Rafael Ramírez, currently Venezuela’s UN ambassador, whom they accused of being a part of a US$ 11 billion corruption case. Maduro said Ramírez was being targeted in a defamation campaign by imperialists, and Ramírez said he would sue the legislature. More in Spanish: (EFE: http://www.economiaynegocios.cl/noticias/noticias.asp?id=311421)

 

Venezuela refinery network operating at roughly a third

Venezuela's refinery network was operating at about a third of capacity, according to union sources and workers, as state oil company PDVSA struggles with equipment issues after years of underinvestment. Venezuela's biggest refinery, 645,000-barrel-per-day Amuay refinery, was operating at only 260,000 bpd with two of its five crude distillation units out of service, union leader Ivan Freites told Reuters, citing an internal report. Its flexicoker remains down, Freites added.  Adjacent Cardon, with capacity of 310,000 bpd, was at 120,000 bpd, added Freites, a fierce critic of PDVSA and the government of socialist President Nicolas Maduro.  Meanwhile, the smaller refineries of El Palito and Puerto La Cruz, with capacities of 146,000 barrels per day and 187,000 bpd respectively, were barely refining any crude, according to a separate union leader and a worker. The El Palito refinery was halted in October for scheduled maintenance, according to PDVSA. Union leader Freddy Alvarado said on Wednesday that the complex remained shut. The catalytic cracking and alkylation units at Puerto la Cruz have been inoperative since the start of November, union leader Jose Bodas said earlier this month. Over the weekend, the refinery's reformer unit for octane 95 gasoline stopped operating, Bodas added. Venezuela's refineries have been plagued with blackouts, equipment issues and stoppages for years. PDVSA often blames problems on "saboteurs" intent on bringing down socialist rule in Venezuela, and says its foes and hostile media try to exaggerate refinery issues. Critics say years of underinvestment and poor maintenance are the cause. U.S. refining firm CITGO Petroleum is sending more products to its parent company, PDVSA, to compensate for problems in the domestic network, according to sources and Reuters data. (Reuters: http://www.reuters.com/article/us-venezuela-refinery-idUSKBN13I2MA)

 

Economy & Finance

Maduro threatens legal action against JPMorgan

President Nicolas Maduro has ordered state oil company PDVSA to look into legal action against JPMorgan after the U.S. investment bank reported delays in US$ 404 million in bond interest payments. PDVSA said on Monday it was using a 30-day grace period for coupon payments on its 2035 bond but that reports of other payment delays were wrong. It suggested paying agent CITIBANK was creating a backlog that had spooked markets. "JPMorgan's attitude is of a criminal nature," Maduro said. He claimed local and foreign opponents were conspiring to give a false impression that Venezuela is on the verge of a debt default. Maduro accused JPMorgan of falsely reporting that PDVSA was in default. In fact, the report in question said payments on three bonds were not made on time and that the company had a "30-day grace period to make payments on the coupons before (the situation) becomes an event of default." Maduro said he had asked PDVSA head Eulogio Del Pino to study legal options. "The least JPMorgan can do is apologize to the Venezuelan people," Maduro said. Maduro also said the U.S. Treasury Department was behind a campaign against PDVSA. PDVSA said it had "punctually" paid this month's obligations for 2021, 2024 and 2026 paper but had activated the grace period for the 2035 bond. "I'd tell the bondholders to call CITIBANK and ask why they are delaying payment of money that is already in their accounts," Del Pino said on state television. He suggested CITIBANK was participating in "attacks" on Venezuela's socialist government and implied that it had reneged on its contract, but later said the bank confirmed it was making payments. CITIGROUP told bondholders in a letter in July that PDVSA would need to name a new paying agent for seven outstanding dollar-denominated bonds, but will stay on as paying agent until PDVSA finds a new one. (Reuters: http://www.reuters.com/article/us-pdvsa-debt-idUSKBN13H24G?il=0; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-oil-authority-blames-citibank-for-bond-payment-delay_628216; http://www.eluniversal.com/noticias/daily-news/venezuelan-govt-ponders-lawsuit-against-morgan_628283)

 

Faría says economic crisis is not over

Foreign Trade and Investment Minister Jesús Faria say Venezuela has not yet overcome its economic crisis, calling it deep and structural. He claims economic activity has improved substantially and expects slight growth in 2017. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/economia/2016/noviembre/22/176374=ministro-jesus-faria-afirmo-que-la-crisis-economica-no-ha-sido-superada)

 

Venezuelan top court rules that the extension of state of emergency is constitutional

Venezuela’s Supreme Tribunal has declared that the extension for more 60 days of the state of exception and economic emergency, decreed by President Nicolás Maduro is constitutional and said he is authorized to continue “adopting urgent, conclusive, and exceptional measures required to ensure full enjoyment of their rights by the population, to preserve domestic order, and to ensure timely access to goods, services, food, medicines and other products which are essential for everyday life.” (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-top-court-rules-constitutional-extension-state-exception_628328)

 

 

Politics and International Affairs

Opposition says Vatican-brokered talks are 'frozen'

Venezuela’s opposition said that talks with the government were “frozen” after officials failed to attend meetings, throwing cold water on Vatican-brokered attempts to bridge the country’s deep political crisis. Though the formal talks, which began last month, appeared to have led to the release of a handful of detained activists, hopes for real rapprochement were always slim. The two sides are fundamentally at loggerheads, with the opposition seeking to oust the socialist president, Nicolás Maduro, while authorities vow he will not leave office before his term ends in 2019. “The government, in an irresponsible manner, froze the dialogue process by not showing up to two technical meetings last night,” said opposition coalition leader Jesús Torrealba. Opposition activists said authorities backed away after the national assembly on Tuesday held a heated session in which they slammed Maduro over a drug scandal. Two nephews of Maduro’s wife were found guilty this month on charges in the US that they tried to carry out a multimillion-dollar drug deal to help their family stay in power. “The government is using the debate as an excuse,” said two-time presidential candidate Henrique Capriles, accusing authorities of not being committed to talks. “The government has not complied with any of its promises. They promised to free political prisoners; there are more than 100 imprisoned. They promised [to open] a humanitarian channel; not a single medicine has come in.” “They [the government] don’t want to fulfill any commitments”, he said. During the talks, the opposition and the government have agreed to hold parliamentary elections in the contested state of Amazonas, which could give Maduro’s opponents a supermajority in congress to enact sweeping new laws and fire ministers. It is unclear whether the elections will take place if the talks don’t resume. It was not clear if the talks could be revived or if the opposition would resume a more militant agenda, which before the talks included protests and putting Maduro on trial before the national assembly. Spain’s ex-prime minister José Luis Rodríguez Zapatero and US diplomat Thomas Shannon were holding or seeking meetings with both sides. Dialogue had divided the diverse opposition coalition, with some activists feeling the government was duping the opposition to buy time. Previous sit-downs also showed little progress. Chavista lawmaker Elias Jaua, the government negotiator in talks with the opposition, claimed that an early election as an attempt to remove President Nicolas Maduro from power was never on the table, never mind what the opposition says. Carlos Ocariz, an opposition representative in government-opposition talks, said the government “lies” when claiming that the removal of President Nicolás Maduro from office was never addressed in the negotiating table. In that connection, Ocariz said that “since the very first day” they proposed early elections or the activation of a recall referendum against Maduro. He pointed to in-house strife within pro-regime forces, tweeting that: “honoring agreements has become a nightmare for them and has made their in-house warfare worse. That’s why any excuse is good enough to back away”. He asked mediators to pressure the government to comply on agreements. (The Guardian: https://www.theguardian.com/world/2016/nov/23/venezuela-nicolas-maduro-opposition-vatican-talks-frozen; The Wall Street Journal: http://www.wsj.com/articles/venezuela-talks-break-down-opposition-claims-1479934607; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2425748&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/elections-recall-vote-proposed-since-the-launch-dialogue-venezuela_628320; and more in Spanish: Globovision: http://globovision.com/article/ocariz-solicitamos-a-los-mediadores-que-exijan-al-gobierno-cumplir-con-los-acuerdos)

 

…. then Maduro backs down, meets with Zapatero and says government has not withdrawn from talks

President Nicolas Maduro denied the government was withdrawing from the talks. After a meeting with Spain’s Rodríguez Zapatero, he said: “The dialogue table continues to move forward, is consolidating”, he said, expressing optimism over a process sponsored by the Union of South American Nations (UNASUR) and the Vatican. He demanded that the National Assembly exclude three legislators from Amazonas state that were incorporated in defiance of a Supreme Tribunal ruling. He claimed his regime has completely complied with all agreements. The mediators also met with representatives of the Democratic Unity (MUD) opposition alliance and said both sides were willing to continue. More in Spanish: (Infolatam: http://www.infolatam.com/2016/11/23/gobierno-venezolano-niega-haber-abandonado-la-mesa-dialogo-oposicion/; Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/23/176579=mediadores-del-dialogo-reiteran-)

 

Supreme Tribunal urges National Assembly to formally separate contested legislators

The Supreme Tribunal’s Constitutional Chamber has urged the National Assembly to take formal action to separate three contested legislators from Amazonas state, as it did on January 11^th this year, since the three legislators said they were willing to withdraw. The Tribunal again held that all acts of parliament in defiance of Tribunal orders are null and void. Hector Rodríguez, head of the pro-government minority caucus at the National Assembly said that new pro Maduro legislators and a new “revolutionary” governor would soon be elected in Amazonas state. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/23/176546=tsj-exhorto-a-la-an-a-desincorporar-formalmente-a-diputados-impugnadosM http://www.noticierovenevision.net/politica/2016/noviembre/23/176581=hector-rodriguez-afirmo-que-en-amazonas-elegiran-a-diputados-del-psuv-en-apoyo-al-presidente-maduro)

 

Foreign Minister, Capriles, trade accusations over diplomatic passports held by convicted drug dealers

Foreign Minister Delcy Rodríguez has brought charges with the Prosecutor General against Miranda state governor and opposition leader Henrique Capriles, accusing him of “presumably” forging official documents. She denied a charge that Efrain Campo Flores and Francisco Flores de Freitas, the nephews of First Lady Cilia Flores that were recently convicted for drug trafficking in NY, were holding Diplomatic Passports when they were arrested. Capriles quickly retorted: “Now the issue is over the passports they themselves issued and not with the drugs that went through from the Presidential airport ramp. They have no shame!”. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/noviembre/23/176517=delcy-rodriguez-denuncio-a-capriles-por-falsificacion-de-documentos; El Nacional, http://www.el-nacional.com/politica/Capriles-respondio-acusaciones-Delcy-Rodriguez_0_963503797.html; El Universal, http://www.eluniversal.com/noticias/politica/canciller-desmiente-emision-pasaportes-implicados-caso-campo-flores_628147)

 

Opposition lawmaker jailed for 2 years joins legislature

The National Assembly welcomed opposition lawmaker Rosmit Mantilla, the country’s first openly gay legislator, who was released from jail last week after being imprisoned for two-and-a-half years as a new member. Mantilla was received with applause and was sworn-in before the leadership of the legislature headed by speaker Henry Ramos Allup, who invited him to take a seat and participate in the debate. “Outside (in the street) there’s hunger, there’s insecurity, I was imprisoned by the SEBIN (national intelligence service), but Venezuela is imprisoned by hunger and insecurity,” Mantilla told reporters after being sworn-in. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2425768&CategoryId=10717)

 

What it's like being a political prisoner in Venezuela under Maduro

Since Nicolas Maduro became president in 2013, the Venezuelan government has arrested and detained thousands of citizens. Most but not all are let go within a few days. One who remains incarcerated is opposition leader Leopoldo Lopez. Another is Joshua Holt, an American from Utah. Francisco Marquez wants the international community to understand something about the government of Venezuelan President Nicolas Maduro: "You are dealing with a government that currently engages in having political prisoners and systematic torture within their prison system." Marquez says he's seen it himself. He was released from a Venezuelan prison in late October after spending four months as a political prisoner.  Marquez says he witnessed the torture of political prisoners as well as common inmates. Marquez is 30 and a dual citizen of the United States and Venezuela, lawyer by training and a political activist by choice. He graduated from Harvard's Kennedy School of Government in 2012. He was arrested in June while working for the political opposition and campaigning for a referendum to remove Maduro from office. He was in jail for a month before being charged with money laundering and conspiracy to incite violence. He says the prison conditions were dungeon-like. "Almost no sunlight, very dark, very humid. Full of mosquitoes. I actually got dengue fever," he says. Marquez says the brutal treatment he witnessed is systematic. "It's not like a one-off prison guard doing this. The warden in my prison, I saw him as he beat other prisoners with what all the prison guards had: this bat with a flat surface," he recalls. Alfredo Romero, a human rights lawyer in Caracas who works on behalf of political prisoners, says since student protests rocked Venezuela in 2014, there have been hundreds of political prisoners, but the actual number in jail at any one time rarely rises above 100 to avoid international scrutiny. Romero says that's a perfect example of the Venezuelan government's revolving-door method of dealing with political prisoners. "They keep people for four months, one year, 20 days," Romero says. "Then they release them and put new people into prison. It's never the same people. It's never the same number." Romero says as of Nov. 22, there are 108 political prisoners in Venezuela. Some are incarcerated. Others have restrictions on their freedom. They can't leave the country. They must present themselves to court. They're prohibited from talking to the media or attending public meetings. "Most of them are protesters, students. Some have been persecuted for tweeting," he says. The United Socialist Party of Venezuela controls the judicial system, which intimidates the political opposition through arrests and detentions, a point echoed in a 2015 report by Human Rights Watch. Romero says since January 2014 there have been nearly 7,000 political arrests and detentions. (PRI: http://www.pri.org/stories/2016-11-23/what-its-being-political-prisoner-venezuela-under-maduro)

 

President dances salsa while Venezuela churns

Venezuelans are running short of food, medicine and patience, but fear not: President Nicolas Maduro is here to cheer them up -- by dancing salsa. Grinning under his black mustache, the burly, towering socialist swivels his hips and twirls his wife Cilia Flores in front of the cameras. With hunger and violent crime gripping the country and the opposition calling for his head, this is Maduro's new strategy for winning hearts and minds. That is an uphill battle; most Venezuelans would like him to leave power. Wednesday was a case in point as Maduro celebrated his 54th birthday with a live performance by old-school salsa greats El Gran Combo de Puerto Rico. But his continued capering amid the crisis, and his recent launch of a dedicated salsa radio show, seem like bad taste to some weary citizens. Spoof photo "memes" of Maduro online have shown him dancing in various inappropriate settings: at the scene of a crime or in a long queue for food. Maduro launched his radio show "Salsa Hour" late last month on the same day that opposition lawmakers called for a political trial against him. Now Maduro is using salsa's popular beats to reach out to ordinary Venezuelans who deserted him in that vote, says social psychologist Ricardo Sucre. "He wants to show himself to be confident and relaxed, not as though his government is about to fall." With his long broadcasts, Maduro is carrying on a tradition of his late mentor and predecessor Hugo Chavez. But Maduro lacks Chavez's charisma, Sucre says, but all the same "Chavez chose him as his successor because he could get through difficult times without looking nervous." Maduro weathered a scandal last week when a US jury convicted two of his wife's nephews of plotting to smuggle cocaine. But the following Sunday, the presidential couples were on television dancing for the nation. "Are you still dancing now?" said senior opposition leader Henrique Capriles. "The country is waiting for you to face up to things." (Agence France Presse: http://news.abs-cbn.com/overseas/11/24/16/president-dances-salsa-while-venezuela-churns)

 

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.