March 22th, 2013

Economics & Finance

Business decries limited access to U$D

Despite the creation of an ancillary Foreign Currency Administration System (SICAD), many companies will not be able access U$D through this device, according to FEDECÁMARAS First Vice President Jorge Roig, who points out the in order to use SICAD companies must have been previously enrolled in the Register of FOREX Users (RUSAD), which excludes most commercial operations, mid size and small business, and individuals. The new system seems a minefield due to the large number of obstacles along the process -hurdles that may lead to higher inflation. Economist Ángel García Banchs says the new system will bring few benefits to importers and corruption will undermine controls, and adds: "There is no better business in Venezuela than to get dollars at VEB 6.30 and sell them above this price".(El Universal, 03-21-2013; http://www.eluniversal.com/economia/130321/venezuelan-entrepreneurs-regret-limited-access-to-us-dollars) and http://www.eluniversal.com/economia/130321/obstacles-in-venezuelas-ancillary-forex-system-threaten-to-spur-shorta; and more in Spanish: Tal Cual; http://www.talcualdigital.com/index.html)

Maduro threatens U$D ‘speculators’ with jail time

Acting President Nicolas Maduro says the government is investigating cases of foreign exchange corruption and threatened “speculators” with jail time. “We’re investigating, and we’re going to pursue them,” Maduro said on state television. “We hope to have those responsible for dollar speculation soon. We want to see them in prison.” A shortage of dollars here has deepened since February, when 32% devaluation went into effect and the separate central bank- administered currency market was shut down. While the government sells dollars for priority imports at 6.3 bolivars, those who can’t access the system pay as much as 24 bolivars per dollar on the black market, according to Dolar Today, a website that tracks the exchange rate on the Venezuelan border with Colombia. (Bloomberg, 03-21-2013; http://www.bloomberg.com/news/2013-03-21/venezuela-threatens-dollar-speculators-with-jail-time.html)

Socialist economic model is said to be "exhausted"

The so-called 21st Century Socialism is an "experiment" with very bad results, says former Argentinean Economy Minister Ricardo López Murphy. "I have this feeling that it will be quite challenging to understand the reasons that, despite great favorable circumstances to Venezuela, led to a poor economic performance," López Murphy said. "Severe" foreign exchange restrictions despite high oil revenues; destruction of added value; erosion of net worth in key state-run industries; "collapse" in production, and rampant indebtedness are just some of the effects of the model promoted for several years by the late President Hugo Chávez, says López Murphy. (El Universal, 03-21-2013; http://www.eluniversal.com/economia/130321/socialist-economic-model-is-said-to-be-exhausted)

Commodities

Four new oil tankers arrive

Four new oil tankers for PDVSA's fleet arrived in Venezuela's eastern state of Anzoátegui on Wednesday. The tankers were received by acting president Nicolas Maduro, who inspected the vessels, along with Oil and Mining minister Rafael Ramirez , Anzoátegui governor Aristóbulo Isturiz, Chief of Staff minister Carmen Melendez. "The idea is to manage 40% of our production, of our exports with our own fleet," said Ramirez during the inspection. (AVN, 03-21-2013; http://www.avn.info.ve/contenido/four-new-oil-tankers-reinforce-sovereignty)

Pernambuco Refinery forges ahead with or without PDVSA

PETROBRAS Chief Gracia Foster said the Brazilian State oil company will conclude the Abreu e Lima Refinery in Pernambuco “with or without the promised support of Venezuela because it is vital for its management and business plan.” She says she has requested a meeting with PDVSA Chief Rafael Ramírez. (Veneconomy, 03-20-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=34090&idc=4)

RUSORO Mining files UD 3 billion claim against Venezuela

RUSORO Mining Ltd, backed by Russia's Agapov family, said on Thursday it had filed a statement of claim against the Venezuela state and is seeking U$D 3.03 billion in compensation over the nationalization of its gold assets in Venezuela. The claim was filed at the World Bank's International Center for Settlement of Investment Disputes, or ICSID, under the provisions of Canada-Venezuela bilateral investment treaty. (Reuters, 03-21-2013; http://www.reuters.com/article/2013/03/21/venezuela-canada-rusoro-idUSL1N0CDFSE20130321)

ALCASA and BAUXILUM fell short of 2012 production goals

State owned aluminum companies ALCASA and BAUXILUM fell short of their production goals for 2012. ALCASA processed 55,585 metric tons, which is 86% of their planned 64,653 MT. At the same time, BAUXILUM met only 49% of its plan that is 807,324 tons out of 1,650,000 tons planned. More in Spanish. (El Universal, 03-22-2012; http://www.eluniversal.com/economia/130322/alcasa-y-bauxilum-incumplieron-metas-de-produccion)

International Trade

Brazil's AMBEV says exit from Venezuela limited to plant closure

Cia de Bebidas das Americas SA, Latin America's largest brewer, plans to limit its exit from the Venezuelan market to closing a plant and will market its products here through a local partner. The company, known as AMBEV, plans to sell some of its brands through Cerveceria Regional, with which it announced a strategic alliance in 2010, according to an emailed statement on Thursday. AMBEV is part of Anheuser-Busch InBev SA, the world's biggest brewer. (Reuters, 03-21-2013; http://www.reuters.com/article/2013/03/21/ambev-venezuela-exit-idUSL1N0CDI6R20130321)

Brazilian firms root for Chavez's man in Venezuela vote

If Brazil's business leaders could vote in Venezuela's election next month, they would cast their ballots for Hugo Chavez's political heir, acting president Nicolas Maduro. They never supported the anti-capitalist bluster of Chavez, who died of cancer last month, but they hope to hold on to lucrative contracts for food exports and construction projects that he signed with Brazil's former leftist leader Luiz Inacio Lula da Silva and his successor, Dilma Rousseff. "In the near term, a Maduro win would be best," said Jose Augusto de Castro, head of Brazil's Foreign Trade Association. (Reuters, 03-21-2013; http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321)

Sino-Venezuelan company plans to export vehicles into MERCOSUR

ZGT Automotive Corporation in Aragua state, a joint venture by China's ZGT and the Venezuelan government, expects to increase production of CHERY X1 and TIGGO vehicles and export them to MERCOSUR. ZGT Operations Vice President Harold Maison says they have produced 13,980 vehicles in 18 months and plan to export their vehicles to Latin America. More in Spanish: (AVN; http://www.avn.info.ve/contenido/empresa-mixta-chino-venezolana-prev%C3%A9-exportar-veh%C3%ADculos-al-mercosur)

Logistics & Transport

Three additional airlines to service Barcelona airport in Anzoátegui state

The terminal's coordinator, José García, has announced three additional airlines will service Barcelona airport in the Eastern state of Anzoátegui, starting within the upcoming months. The airlines are RUTACA, ESTELAR and LASER. Service to the terminal is currently provided by CONVIASA, ASERCA and AVIOR. More in Spanish: (AVN, 03-22-2013; http://www.avn.info.ve/contenido/tres-nuevas-aerol%C3%ADneas-entrar%C3%A1n-operaci%C3%B3n-aeropuerto-barcelona)

Politics

Venezuela plot claims are ‘outlandish allegations,’ U.S. says

The U.S. State Department said today claims by Venezuelan officials of U.S.-based plots to destabilize the country are “unsubstantiated and outlandish.” Venezuela’s government has stepped up its anti-U.S. rhetoric after former President Hugo Chavez’s death from cancer March 5 triggered snap elections scheduled for April 14. His handpicked successor, acting President Nicolas Maduro, said he has evidence that former U.S. officials are plotting to assassinate opposition candidate Henrique Capriles Radonski as a way of inciting a coup. Foreign Minister Elias Jaua yesterday suspended talks with U.S. Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson after U.S. officials were expelled from Venezuela. Maduro accused them of seeking to destabilize Venezuela by meeting with military officials. (Reuters, 03-21-2013; http://www.bloomberg.com/news/2013-03-21/venezuela-plot-claims-are-outlandish-allegations-u-s-says.html; El Universal, 03-21-2013; http://www.eluniversal.com/nacional-y-politica/130321/washington-disappointed-at-venezuela-hopes-for-productive-relation; The Washington Post, http://www.washingtonpost.com/world/the_americas/us-denounces-outlandish-allegations-from-venezuela-after-suspension-of-communication-line/2013/03/21/2ddf5224-9251-11e2-9173-7f87cda73b49_story.html)

US-Venezuela diplomatic communication suspended

Communication channels established to improve relations with the United States have been temporarily suspended after "attacks" by Roberta Jacobson, Assistant Secretary of State for Western Hemisphere Affairs, on Venezuela's election system, says Foreign Affairs minister Elias Jaua. "I hope there will be a correction and US meddling ceases," added the Minister, recalling that the commissioner to keep the communication channel with Mrs. Jacobson was Venezuela's ambassador to the Organization of American States (OAS), Roy Chaderton Matos. (AVN, 03-20-2013; http://www.avn.info.ve/contenido/suspended-venezuela-us-communication-channels; El Universal, http://www.eluniversal.com/nacional-y-politica/130320/venezuela-hangs-up-contacts-with-the-us; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=717949&CategoryId=10717; Fox News, http://www.foxnews.com/us/2013/03/20/venezuela-halts-all-diplomatic-communication-with-us-after-diplomats-expelled/)

Pro government gangs attacked student march en route to Elections Council

Student demonstrations marching to the National Elections Council in order to present demands for transparency and equity in upcoming Presidential elections on April 14t, were blocked by pro government gangs who attacked the march with sticks and stones, and wounded 7 students. More in Spanish: (El Nacional, 03-22-2013; http://www.el-nacional.com/)

Southern Command: Caracas may have to restate foreign policy if Maduro wins

The US Southern Command believes Nicolás Maduro can become the new Venezuelan president and that the Chavista line will continue at least in the near future. However, the Venezuelan government might reconsider the practice of "buying friends" with oil, according to John Kelly, Chief of the US Southern Command. "Expectations are that the Vice-President (Maduro) will win the election of April 14 and things will be business as usual, at least for the time being. Who knows within five years," the military chief answered a question as to his estimate of Venezuela's future after the demise of President Hugo Chávez during a hearing held on Wednesday in Washington, says DPA. (El Universal, 03-20-2013; http://www.eluniversal.com/nacional-y-politica/130320/southern-command-caracas-may-have-to-restate-foreign-policy-if-maduro-)

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

February 8th, 2011

Economics & Finance

Economist claims Venezuela’s Central Bank official figures show red

The transfer of international reserves to the National Development Fund (FONDEN) in the past five years has used up assets from the Central Bank of Venezuela. According to economist José Guerra, the institution´s balance, published two days ago, shows a capitalization of 64.3 billion Bolivars. According to the official report, total assets of Bs.207.5 billion add up to. However, this total amount includes reserves transferred to the FONDEN, which total 73.6 billion Bolivars since 2005. These transfers are no longer in the hands of BCV but are part of the fund used to finance the Executive, so they cannot be included as assets, according to Dr. Guerra. More information in Spanish. (Reportero 24; 02-08-2011; http://www.reportero24.com/2011/02/finanzas-bcv-se-descapitaliza-y-presenta-numeros-en-rojo/)

Macroeconomic Stabilization Fund turns over USD 832 million to Venezuela's Executive

About two weeks ago, Venezuela's President Hugo Chávez asked Rafael Ramírez, the president of state-run oil company Petróleos de Venezuela (Pdvsa), to transfer USD 500 million from the Macroeconomic Stabilization Fund (FEM), from the USD 832 million that Pdvsa held in the Central Bank of Venezuela (BCV). Chávez said that the money would be spent to build houses and refurbish shelters for people made homeless by heavy rains. The latest numbers released by the BCV indicate that the state-run oil company withdrew USD 829 million from the Macroeconomic Stabilization Fund (FEM). (El Universal, 02-04-2011; http://english.eluniversal.com/2011/02/04/en_eco_art_fem-transfers-usd-83_04A5113291.shtml)

Government considers transferring exchange functions to the Bicentennial Public Securities Exchange Market (BPVB, after its initials in Spanish) in the short term, according to sources within the Venezuelan Planning and Finance Ministry. (Veneconomy, 02-04-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=24771&idc=2)

Average household income fell by 8% during 2010

Economic difficulties and rising prices in goods and services were the common denominators in a year in which household income plummeted for the first time since 2003. According to the numbers produced by the National Statistics Institute (INE), by the first half of last year, household monthly income averaged USD 743.62, versus USD 621.24 the previous year. In nominal terms, it was a 19.7-percent growth. However, inflation added, in 2009-2010 there was a real drop at 8.3 percent. (El Universal, 02-04-2011; http://english.eluniversal.com/2011/02/04/en_ing_esp_average-household-in_04A5099091.shtml)

Declining trade reported in Venezuela

Trade has not recovered in Venezuela, said Fernando Morgado, the president of the Venezuelan Council of Trade and Services (Consecomercio). "We have seen that the downward trend in trade continues," Morgado said during a meeting of the board of director of the Venezuelan Federation of Trade and Industry Chambers (Fedecámaras). With regard to the supply of food products in the domestic market, the businessman said that policies implemented by the government continue to hit manufacture, distribution, and marketing of different goods. (El Universal, 02-07-2011; http://english.eluniversal.com/2011/02/07/en_eco_art_warnings-against-dec_07A5127491.shtml)

Paraguayan congress puts price to Venezuela’s Mercosur incorporation

The Paraguayan political system is willing to consider the incorporation of Venezuela to Mercosur as a full member if there is a “significant gesture or compensation” from the government of President Hugo Chavez, according to congressional sources in Asunción. (MercoPress, 02-05-2011;  http://en.mercopress.com/2011/02/05/paraguayan-congress-puts-price-to-venezuela-s-mercosur-incorporation)

Paraguay supports Colombia’s bid to join Mercosur

Colombia’s request to formally join Mercosur will be addressed during the group’s next summit to be held in Paraguay June 24th, revealed Paraguayan Foreign Affairs minister Hector Lacognata. (Latin Daily Financial News, 02-01-2011; http://www.latindailyfinancialnews.com/index.php/en/politics/world/7710-paraguay-supports-colombias-bid-to-join-mercosur.html)

Commodities

Venezuela´s export barrel average up to $87.60/bbl. this week, up $3.65 from last week, said the Venezuelan Energy and Oil Ministry on Friday. The average for the year-to-date is $85.71/bbl., up $13.02/bbl. compared to 2010. (Veneconomy, 02-04-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=24782&idc=4)

Venezuela's oil exports to the US rise to 1.38 million bpd

Venezuela's crude oil exports to the United States bounced back in the last week of January, up 34 percent compared to average exports in January 17-21. Venezuelan oil exports to the US in the week between January 24 and 28 averaged 1.38 million barrels per day (bpd), according to figures provided by the Energy Information Administration (EIA), the statistical arm of the US Department of Energy. The previous week, Venezuela's total crude oil exports amounted to 1.03 million bpd. Preliminary figures showed that in January Venezuelan oil exports to the United States averaged 998,000 bpd. (El Universal, 02-04-2011; http://english.eluniversal.com/2011/02/04/en_eco_esp_venezuelas-oil-expo_04A5112891.shtml)

Venezuelan oil minister: $200 oil possible

Crude oil prices could more than double if the unrest in Egypt forces the closure of the Suez Canal, Venezuelan Oil Minister Rafael Ramirez said, according to a Bloomberg News report. A disruption of shipments along the waterway would prompt a meeting by the Organization of Petroleum Exporting Countries “because oil could reach $200 a barrel,” Ramirez told reporters today in Caracas. A $200-a-barrel oil price would easily eclipse the all-time high of $147 a barrel reached in July 2008 and would be roughly double today's prices. A large, sustained rise in oil prices could send retail gasoline prices well above $4 a gallon in the U.S. (Blogs Star Telegram – Barnett Shale, 02-04-2011; http://blogs.star-telegram.com/barnett_shale/2011/02/venezuelan-oil-minister-200-oil-possible-.html)

Venezuela Terminates Crystallex - Canada Miner Mulls Legal Action

Canadian gold miner Crystallex International Corp said that a state-owned Venezuelan company unilaterally decided to end their contract on Las Cristinas project, their largest asset. The Venezuelan company, Corporación Venezolana de Guayana, claimed that Crystallex had not done enough to advance the project, according to a Crystallex statement on Sunday. Crystallex disputed that assertion, saying it had met all of its obligations under the contract and had worked to ensure the project was "shovel ready" while awaiting a permit from Venezuela's Ministry for the Environment and Natural Resources. (Reuters, 02-06-2011; http://www.reuters.com/article/2011/02/06/crystallex-idUSN0617093420110206)

Rusoro eyes Venezuela mine after Crystallex exit

Russian-Canadian miner Rusoro is eyeing Venezuela's Las Cristinas gold project after President Hugo Chavez's government canceled Crystallex International's permit, sending its shares down 35 percent. The mine, south of the Orinoco river and near a town bearing the name of the mythical golden city of El Dorado, may hold Latin America's biggest gold deposits, studies have shown. But a decades-old saga over its development underlines the risks of doing business in Venezuela, where the lure of vast natural resources has been dulled by rule changes, economic difficulties and Chavez's "21st century socialism" project. (Reuters, 02-07-2011; http://www.reuters.com/article/2011/02/07/venezuela-gold-idUSN0722524820110207)

Gold´s share in Venezuela’s total reserve rises to 12%, while foreign currency share drops by 37%

Venezuela’s central bank increased its share of gold reserves 12 percent during the second half of 2010 while its reserves in foreign banks fell 37 percent in the period, according to the bank’s year-end financial report. The bank’s gold reserves increased to 42.4 billion bolivars ($9.86 billion) at the end of 2010 from 37.3 billion bolivars at the end of June, the bank report said. The central bank’s reserves held in foreign banks fell to 7.32 billion bolivars by year-end from 10 billion bolivars in June. (Bloomberg, 02-05-2011; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=auvgUpD6iV_U)

PDVSA announces it will launch six agro-industrial complexes during 2012

Two sugar plants and four agro-industrial complexes to process ethanol and other sugar cane products will be inaugurated by PDVSA Agricola next year, informed Egly Ramirez, president of the Venezuelan state-run oil company subsidiary. “We are working intensively to inaugurate them in 2012. The budget has been approved, the works show great progress and we are currently in the construction stage,” he stated. The six complexes, built simultaneously in different zones of the country, will allow the Venezuelan Government to strengthen the domestic production of sugar, increase the production of balanced food for animals and make incursion into the processing of ethanol and sugar cane derivatives. The two sugar plants would have the capacity to process 7,000 tons of cane per day each. (AVN, 02-06-2011; http://www.avn.info.ve/node/41867)

Politics

Chavez seeking third six-year term

Venezuelan President Hugo Chavez, beset by an economic slowdown for the second consecutive year, announced he would fight on and seek re-election next year for a third six-year term. Chavez suffered setbacks in last year's National Assembly elections that depleted his comfortable majority but, as widely anticipated, he reacted by saying he wouldn't hesitate to issue a presidential decree if and when he faced opposition on a particular issue. (UPI, 02-03-2011; http://www.upi.com/Top_News/Special/2011/02/03/Chavez-to-fight-on-for-a-third-six-year-term/UPI-73841296765848/#ixzz1DHYuvgCy)

Strict timetable is set for National Assembly to grill three ministers on annual report

Three government ministers will appear before Parliament next week to face questions. National Assembly president, Fernando Soto Rojas has made it clear that questions to the ministers should be to the point. Each deputy will be given five minutes to put a question and get an answer. (VHeadline, 02-04-2011; http://www.vheadline.com/readnews.asp?id=100811)

Land redistribution is a clear priority in Venezuela after 12 years of Revolution

One of the most significant achievements in these 12 years of Bolivarian Government is the clear intention regarding lands redistribution and the planning for the agricultural development, said the Agriculture and Lands Minister Juan Carlos Loyo. “The Bolivarian Revolution brought with it the awakening, a spirit of freedom, the knowledge of what the values are and represent on the vision people had up to midst 90s, when nobody dared to express an own opinion, debate and only allowed minorities to make decisions for the majorities,” he said. (AVN, 02-06-2011; http://www.avn.info.ve/node/41907)

An American seems to have the President’s ear in Venezuela

Slip into Librerías del Sur, a chain of state bookstores. Read a state newspaper. Turn on state television. Listen to state radio. Eva Golinger, a New Yorker who speaks Spanish with a thick American accent, seems to be expounding everywhere these days on the threats to this country’s so-called “Bolivarian revolution.” Welcomed into President Hugo Chávez’s fold to such an extent that she accompanied him on a recent trip to Iran, Libya and Syria, Ms. Golinger, a lawyer who first came to Venezuela in the 1990s to research her family’s history, has created a unique niche for herself here: an American with the president’s ear. (The New York Times; 02-04-2011; http://www.nytimes.com/2011/02/05/world/americas/05venezuela.html?_r=1&scp=2&sq=venezuela&st=cse)

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 22th, 2010

Economics, Trade & Business

Public sector imports up 47 percent; private sector's down 22 percent

In a report on Venezuela's economic activity at the end of the third quarter, the Central Bank of Venezuela (BCV) stressed there was an increased flow of foreign exchange throughout the different economic sectors during the period. However, there was only a partial recovery. According to accumulated figures, private imports declined while government procurement abroad rose. Venezuelan public sector imports amounted to USD 5.4 billion in the first nine months of the year, an increase of 47 percent compared to the same period last year, when they reached USD 3.9 billion, according to data released by the BCV. By contrast, Venezuela’s private sector imports amounted to USD 17.9 billion, a 22 percent fall compared to 2009, when they amounted to USD 22.9 billion. (El Universal, 11-22-2010; http://english.eluniversal.com/2010/11/22/en_eco_esp_public-sectors-impo_22A4760091.shtml)

40% private sector imports fell in 2010

The private sector imports so far in 2010 dropped 40% compared with the previous year, while in the public sector have increased since the National Government continues to bring food and other products, said Avendaño Franco, executive director of the Chamber of Commerce of Puerto Cabello. Customs specialist stressed that the disparity of the dollar and other actions to determine the trade flow is not equal to three years ago. Avendaño stressed that the difficult access to foreign exchange has resulted in an imbalance in the purchasing power to the supply and demand. Regarding exports, the business leader said that not happening, because the country is not encouraged private sector production permanently. (Notitarde, 11-22-2010; http://www.notitarde.com/notitarde/plantillas/nota.aspx?idart=1185225&idcat=9849&tipo=2)

Food imports will reach $ 6,500 million in 2011

The bill for food imports around the world could surpass one trillion dollars in 2010, according to the latest Food Outlook report of the Food and Agriculture Organization (FAO, for its acronym in English). Venezuela is no exception to this upward trend that could grow in 2011. The expert in food and agriculture, Carlos Machado Allison, estimated that by the end of this year, the value of foreign food purchases could come close to $5,500 million dollars, after 2009 closed at about $5,000 million, according to his calculations. (El Mundo, 11-22-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=17&Id_Noticia=37866)

Rusoro plans to increase gold production in Venezuela

Rusoro Mining, a Russian-Canadian gold producer and explorer, expects gold production in two Venezuelan mines to amount to 20,000 ounces in October and November, it said on Monday. Rusoro Mining operates several rich gold deposits in the southeastern state of Bolívar, particularly the Isidora mine and Chocó 10 mine, which is one of the most productive deposits. (El Universal, 11-22-2010; http://english.eluniversal.com/2010/11/22/en_eco_esp_rusoro-plans-to-incr_22A4761651.shtml)

Venezuela steelmaker sees improved output for 2011

Venezuelan state steelmaker Sidor hopes to double production to nearly 4.5 million tonnes in 2011 thanks to a recovery in the South American nation's power sector, the company's president said on Saturday. Carlos D'Oliveira was quoted saying Sidor should produce 98 percent of its annual capacity of 4.5 million tonnes next year due to the recovery of the hydro-electric sector and new thermoelectric generators. (Reuters, 11-20-2010; www.reuters.com/article/idUSN2019960220101120)

Venezuela facing currency devaluation

Venezuela's recession-hit economy is on the mend but the ravages of drought, nationalizations and slow growth have combined to make a further devaluation of the bolívar inevitable in 2011, industry analysts said. Figures cited by the International Monetary Fund and industry experts suggested a formal revision of the bolívar-U.S. dollar parity would make official what is already in effect in Venezuela's burgeoning informal economy. Venezuela last devalued its currency in January 2010. (UPI, 11-19-2010; www.upi.com/Top_News/Special/2010/11/19/Venezuela-facing-currency-devaluation/UPI-23911290194483/)

Politics

Chavez demands action against owner of TV channel

President Hugo Chavez stepped up his threats against Venezuela's only remaining opposition-aligned television channel on Saturday, calling its owner a fugitive criminal and accusing him of conspiring against his government. Chavez demanded that authorities including the attorney general and the Supreme Court take action in a pending criminal case against Globovision owner Guillermo Zuloaga, who fled the country earlier this year after a court issued an arrest warrant. (Washington Post, 11-20-2010; www.washingtonpost.com/wp-dyn/content/article/2010/11/20/AR2010112002459.html)

Transport & Logistics

Yellow alert for Venezuelan coasts

The National Institute of Aquatic Spaces (INEA)’s General Manager Cristóbal Figueroa decreed a yellow alert for the Venezuelan coasts due to the atmospheric instability over the Caribbean Sea. Navigation for ships of less than 150 gross tonnage units in Nueva Esparta, Falcón and Anzoátegui has also been restricted. (Veneconomy, 11-22-2010; www.veneconomy.com/site/index.asp?ids=44&idt=23997&idc=3)

Port activity decreases in the port of La Guaira

Movement in the terminal port of La Guaira, Venezuela has continued to decline. According to data released by the Central Coast Ports Company (PLC), until last October, the terminal had received some 583 ships, while in the same period last year, La Guaira received 641 motorboats (container, general cargo, passenger ships and bulk carriers). In percentages, the numbers represent a decline of 9% with respect to 2009. However, on the tenth month of the year, the port handled 67 ships (more than eight ships in September and three more than the same month in 2009). In terms of TEUs, 35,763 were mobilized. The cumulative year to date shows 265,553 TEUs have been moved. Likewise, the numbers indicate that in the similar period of 2009, the port had mobilized 320,845. (Mundo Marítimo, 11-19-2010; www.mundomaritimo.cl/noticias/baja-actividad-portuaria-en-el-puerto-de-la-guaira)

Petroleum & Energy

Eni and PDVSA agreed investment of $ 17,000 million and operating refinery

Italian oil company Eni and Petróleos de Venezuela agreed on terms for the exploitation of the Junín 5 Block of the Orinoco Belt and the construction of a refinery through a $ 17,000 million investment. In the joint venture, called PetroBicentenario, PDVSA will have 60% and Eni 40%, the minister of Energy and Petroleum Rafael Ramírez said during the signing of the agreemnt at PDVSA headquarters. Eni CEO Paolo Scaroni said the agreement makes "Venezuela a strategic partner” while Ramirez, said it is the largest investment between Italy and Venezuela. (El Mundo, 11-22-2010; www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10776)

State public utility study all oil operations

The government intends to further accentuate the control over oil and gas activity by declaring all oil operations in the country of "public interest and public or social utility", as envisaged in the draft Law for the Protection of the National Hydrocarbons Sector. This draft, which is under study by the National Assembly and that could be discussed before the end of this year, states the "principles and mechanisms that ensure the protection and safeguarding of assets and activities of the national oil and gas sector." (El Universal, 11-22-2010; http://www.eluniversal.com/2010/11/22/eco_art_estudian-declarar-de_2113744.shtml)

PDVSA sys there are 220 operational drills

Venezuela has about 220 active oil drills, slightly above the official figures reported last year, reported Saturday the vice president of exploration and production of state-owned PDVSA. In its financial and operational report of 2009, Petróleos de Venezuela (PDVSA) had reported 208 active rigs. "Currently there are 220 active rigs in our country, and fifteen ready to enter service soon," said Eulogio Del Pino in a statement. The numbers of oil production and drilling assets reported by Venezuela may differ from agencies like the International Energy Agency and OPEC itself, of which Venezuela is a member. (Ultimas Noticias, 11-20-2010; www.ultimasnoticias.com.ve/Noticias/Pdvsa-dice-que-hay-220-taladros-operativos.aspx)

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.