October 20, 2016

International Trade

Cargo that has arrived at Puerto Cabello:

• 400 tons of catalyzers consigned to state oil company PDVSA
• 20 tons of surgical material consigned to state agency Fundacion Barrio Adentro
• 2,948 tons of white beans
• 880 tons of black beans
• 418 tons of beef
• 396 tons of sanitary napkins
• 308 tons of toilet paper
• 222 tons of whole milk
• 220 tons of cooking pasta
• 110 tons of medicine

All in 251 containers consigned to state agency CASA. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34659; El Mundo: http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arribaron-a-puerto-cabello-5-502-toneladas-de-prod.aspx; El Universal, http://www.eluniversal.com/noticias/economia/llegan-mas-mil-toneladas-alimentos-productos-primera-necesidad_623307)

 

3,900 tons of food arrived at the port of Guanta, in Anzoátegui state, in 99 containers including precooked corn, rice, cooking oil, sugar, and milk. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arribaron-3-900-toneladas-de-alimentos-a-anzoategu.aspx#ixzz4NWbrnJTg)

 

Oil & Energy

Congressional probe here says US$ 11 billion missing at PDVSA

A report by a Venezuelan congressional commission accused Petroleos de Venezuela (PDVSA) of corruption on Wednesday, saying about US$ 11 billion in funds went missing from the state-run oil company while Rafael Ramirez was at the helm from 2004-14. "It is more than the (annual) budget of five Central American countries," said Freddy Guevara, comptroller commission president and a member of one of Venezuela's opposition parties, alleging widespread malfeasance at the state oil producer. "If PDVSA is unable to pay its international creditors ... it is because they robbed this money," said Guevara. As he addressed his fellow lawmakers, he flicked between slides illustrating what he described as various cases of wrongdoing at PDVSA. The congressional investigation focuses on 11 cases, ranging from known scandals in an Andorran bank and PDVSA pension funds to alleged overpricing in purchases of oil equipment.  The accusations are based in part on documents from PDVSA, auditor KPMG and foreign investigations.  Interviews with a KPMG representative showed the company had informed PDVSA's auditing committee of "frauds," the report said. "The representatives of PDVSA had full knowledge of the existence of administrative irregularities," the report reads, adding KPMG has not provided further details, citing confidentiality policies.  The U.S. Justice Department has said there is a large, ongoing investigation into bribery at PDVSA. One slide displayed by Guevara titled "Those involved," showed dozens of arrows pointing at Ramirez, who served as Venezuela's oil czar for a decade before being sent to the U.N. The commission called on the National Assembly to deem Ramirez "politically responsible" for the irregularities and recommended a "no-confidence vote" against current PDVSA President Eulogio Del Pino. The investigation may have little impact, however, as President Nicolas Maduro's government has sidelined Congress since the opposition won control in a December vote and the Supreme Tribunal has annulled all its major decisions. Ramirez himself has asked the Supreme Tribunal to block the investigation. (The Fiscal Times: http://www.thefiscaltimes.com/latestnews/2016/10/19/Venezuela-congress-probe-says-11-billion-unaccounted-PDVSA; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/rafael-ramirez-pidio-tsj-anular-investigacion-que-abrio_623321; Infolatam: http://www.infolatam.com/2016/10/19/parlamento-venezolano-denuncia-malversacion-de-us-11-000-millones-en-pdvsa/)

 

Local billionaire to invest in state-controlled oil field

Billionaire businessman Oswaldo Cisneros, one of Venezuela’s richest men, is investing US$ 1 billion in a state-controlled oil field as the government seeks to attract more private funds for the struggling energy sector. A group of Venezuelan businessmen led by Cisneros and calling themselves Delta Petroleum NV will sign a deal next week to invest US$ 800 million in the PETRODELTA joint venture with state-run Petróleos de Venezuela SA in the country’s east, said the president of the state producer, which is known as PDVSA, and a spokesman for Cisneros. Earlier this month, Cisneros completed the purchase of 32% of PETRODELTA from Houston-based Harvest Natural Resources Inc. and Argentina’s PLUSPETROL for about US$ 200 million in cash and stock. PDVSA’S president, Eulogio Del Pino, says he wants to attract more private Venezuelan investors to mature oil fields to boost sagging output. “We believe oil prices will go up in the next two to three years and that’s why we’re making this bet on the sector now,” Cisneros said through a statement provided to The Wall Street Journal. “This is a good time to invest.” PETRODELTA is the latest in a series of low-profile oil ventures for Cisneros. In the past two years, he had purchased stakes in the PETROCABIMAS joint venture in western Venezuela and in the Colombian producer CANACOL Energy Ltd. He also bought the Venezuelan branch of Denmark’s MAERSK Drilling. Keeping a low profile, Mr. Cisneros has been among a few Venezuelan captains of industry of his generation to continue thriving under the Socialist government of President Nicolás Maduro and his predecessor, Hugo Chávez; and sits on Maduro’s National Council of Productive Economy, an advisory body made up of regime-friendly businessmen. (The Wall Street Journal: http://www.wsj.com/articles/venezuelan-billionaire-to-invest-in-state-controlled-oil-field-1476901300)

 

Rodríguez says PDVSA could give CITGO a stake in oil production in Venezuela

State oil company Petroleos de Venezuela (PDVSA) is considering giving CITGO –its subsidiary based in the United States- access to participate in oil production ventures in Venezuela, says Francisco Rodríguez, Chief Economist of Torino Capital, an emerging market investment bank in New York. Rodríguez says PDVSA president and Minister of Petroleum and Mining Eulogio Del Pino disclosed the plan during an interview with Bloomberg News, by saying such a decision “could significantly increase the firm’s value.” “Such a scheme would make holders of the PDVSA 2020 bond senior to other PDVSA bondholders not just in terms of their claim on CITGO’s assets, but also of their claim on a fraction of Venezuela’s oil production, making the 2020 bonds much more attractive than current market estimates suggest,” the economist argued. Rodriguez has been pushing forward his own view on how to pull the country back from the brink. (El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-would-give-citgo-stake-oil-production-venezuela_623055; Bloomberg, http://www.bloomberg.com/news/articles/2016-10-19/as-venezuelan-expats-see-end-a-harvard-wall-street-feud-emerges)

 

Maduro to visit oil producers, China

President Nicolas Maduro will visit OPEC and non-OPEC countries in coming days to push a deal to stabilize oil markets and will also travel to key financier China, as the cash-strapped nation seeks to ease a steep recession. OPEC agreed in Algiers on Sept. 28 to reduce production to a range of 32.5 million to 33.0 million barrels per day, which would be its first output cut since 2008. Another meeting on Nov. 30 is set to firm up details of the accord. "I'm going to make a lightning visit, lightning but also deep, to several oil-producing countries, OPEC and non-OPEC, to bring a proposal and finally close an agreement between OPEC and non-OPEC countries to stabilize the oil market and allow prices to bounce back in a stable way," Maduro said late on Tuesday night during his scheduled weekly televised broadcast. Maduro did not name the oil-producing countries he planned to visit, but said Russian President Vladimir Putin will support the OPEC initiative following a small rebound in prices. (Reuters, http://www.reuters.com/article/venezuela-oil-idUSL1N1CP0PF; and more in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/maduro-anuncia-gira-pa%C3%ADses-opep-y-no-opep-para-estabilizar-precios-del-petr%C3%B3leo)

 

Táchira state governor asks for gasoline price hike

Lieutenant José Gregorio Vielma Mora, the pro-regime Governor of Táchira state on the border with Colombia, calls current gasoline prices here “not fair and inadequate”, and has asked higher authorities to adjust them upwards. He said current prices are “an insult, a lack of respect toward the value of gasoline in Venezuela”. He added that it isn’t possible that 91 octane gasoline is sold for 1 bolivar here, while “in Colombia 87 octane gasoline costs 617 bolivars. This is unbearable and unimaginable”. “We can no longer give away gasoline. The cost of a liter of water is higher than that of a liter of gasoline”, he said. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/economia/2016/octubre/19/172768=vielma-mora-propone-aumentar-el-precio-de-la-gasolina)

 

Commodities

Agriculture Minister claims beef, milk and pork production rose over past five months

Agriculture Minister Lieutenant Wilmar Castro Soteldo says beef, dairy, pork and chicken production rose over five months between April and September, More in Spanish: (Ultima Hora Digital, http://ultimahoradigital.com/2016/10/castro-soteldo-produccion-carnica-lactea-y-porcina-subio-en-cinco-meses/)

 

Economy & Finance

Venezuela bonds fall after PDVSA warns swap fail could compromise payments

Venezuela's bond prices fell this week after state oil producer PDVSA again extended a deadline for its US$ 5.3 billion debt swap offer and warned that if the operation failed the cash-strapped company might struggle to pay its debt. In a communiqué, PDVSA warned that “should exchange offers prove unsuccessful, it could be difficult for the company to make scheduled debt payment, including existing bonds.” The swap offer was designed to ease operations at the company heaving under low oil prices, slumping production and an extreme cash flow deficit that has left it unable to pay contractors on time. But low participation led PDVSA to sweeten the exchange's terms, extend deadlines and warn that it "could be difficult" to pay bondholders if the operation flops. The swap deadline was extended from Monday to Friday 22nd. The cost of a default would be steep for PDVSA and the market largely sees its comments as an attempt to push participation to the 50% threshold. "They're trying to scare the market," said one fund manager, adding he did not think the strategy would work. "They know the cost of not paying is much higher than the cost of paying." But if participation in the swap is low, bond prices will likely fall further and PDVSA will not get as big a financial breather. "We assume that these threats represent a negotiation tactic to encourage participation," said Siobhan Morden at Nomura Securities International, adding she could not rule out less commitment to paying debt down the line. "The reluctance of PDVSA to alter the terms and further improve the exchange ratio is worrisome as it does not show flexibility of respecting market forces to provide the necessary terms for a successful exchange," Morden said. (Reuters: http://www.reuters.com/article/venezuela-pdvsa-debt-idUSL1N1CO0JE; El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-views-hard-debt-payment-the-event-failed-swap-offers_623285)

 

In light of PDVSA swap, FITCH keeps CITGO on negative watch

If CITGO was taken away from Venezuela's PDVSA in a default, FITCH believes that CITGO could be investment grade. "Given CITGO's size, asset positioning, cash flow potential, and other factors, FITCH informally estimates that, on a stand-alone basis with no parental rating constraints, CITGO could be rated in the mid-to-high 'BB' range, and potentially investment-grade, depending on the company's capitalization following a change in control," FITCH theorized. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423457&CategoryId=10717)

 

National Assembly votes to carry 2016 national budget over to 2017, rejects Maduro budget

The National Assembly has voted to carry the 2016 Budget Law over into fiscal 2017, and rejected actions by the Executive branch in decreeing a new budget without parliamentary approval. Assembly Vice President Simón Calzadilla said “all public credit operations of any nature, both in local and foreign currency will be considered null and void” if transacted under the budget approved by the Supreme Tribunal. Pro government legislator Ramón Lobo admitted that the budget must be presented to the legislature, but said the Assembly is “in contempt” for not abiding by Supreme Tribunal rulings. The legislature also voted to advise “the Organization of American States (OAS) and the United Nations, along with other international organizations” that the Maduro budget is illegal. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/19/172775=asamblea-nacional-declara-que-presupuesto-2016-seguira-vigente-en-2017)

 

Politics and International Affairs

Opposition rejects Supreme Tribunal ruling on 20% voter signatures for recall referendum

Venezuela’s Democratic Unity (MUD) opposition coalition says it will disregard a ruling by the Electoral Chamber of the country’s Supreme Tribunal which holds that the collection of registered voter signatures for a recall referendum against President Nicolas Maduro should be attained in each of the 23 states of Venezuela plus the Capital District. In a decision posted on the TSJ website, the high court notes that “failure to collect such percentage in any of the states or the Capital District would make null and void the call for the recall referendum.” MUD Secretary General Jesús Torrealba said they will disregard the ruling and will only abide by what is established within the Constitution, which calls for a 20% of all voters nationwide. “It is they who are in contempt” he said in reference to the justices in the Supreme Tribunal. The ruling by the Tribunal means that even if the required 3.9 million signatures are collected the recall could not go forward if they fall short of 20% in any given state.  National Assembly President Henry Ramos Allup said the opposition would gather the requisite number of signatures, despite a ruling intended to make the process more difficult. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-high-court-signatures-for-recall-vote-state-state_623053 and more in Spanish: Infolatam: http://www.infolatam.com/2016/10/18/oposicion-venezolana-dice-que-desconocera-decision-del-supremo-sobre-el-20/; Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/18/172633=ramos-allup-desestimo-sentencia-del-tsj-sobre-la-recoleccion-por-estado-del-20

 

Elections Council announces and opposition rejects, 2017 timetable for regional elections

The National Elections Council (CNE) has announced that gubernatorial elections will be held during the first semester of 2017, and mayoralty elections are to be held during the second semester the same year. As per the Constitution these elections must be held by December this year, four years after they were elected in December 2012. Council Chairperson Tibisay Lucena did not set exact dates for either election. 23 governors – 20 of them pro-regime – will rule past their mandate. The opposition Democratic Unity (MUD) coalition immediately rejected the decision, demanded that Constitutional terms be observed, termed the timetable “tardy” and added that the move “confirms CNE irresponsibility and regime’s cowardice.” (El Universal, http://www.eluniversal.com/noticias/daily-news/opposition-rejects-timetable-for-election-governors-mayors-venezuela_623288; and more in Spanish: Infolatam: http://www.infolatam.com/2016/10/19/poder-electoral-venezolano-fija-para-2017-eleccion-de-alcaldes-y-gobernadores/; El Universal, http://www.eluniversal.com/noticias/politica/mud-rechazo-cronograma-del-cne-para-elecciones-regionales-municipales_623206)

 

Maduro threatens governors and mayors over 2017 budget, Capriles calls the threat “blackmail”

President Nicolas Maduro warned all mayors and governors nationwide must abide by the Supreme Tribunal’s ruling on the 2017 budget if they want to receive their mandated regional funding from his government. He said those who do not recognize the Tribunal’s sentence will not receive a penny. Miranda state Governor and former Presidential candidate Henrique Capriles Radonski terms the move by Maduro “blackmail”, and asked his advisors for legal counsel on responsibilities that can be incurred by accepting what he termed an “illegal” budget. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/politica/gobernadores-y-alcaldes-deben-firmar-sentencia-del.aspx#ixzz4NWaMWseq; http://www.elmundo.com.ve/noticias/actualidad/politica/ejecutivo-aprueba-bs--115-mil-millones-para-gobern.aspx; Noticiero Venevisión, http://www.noticierovenevision.net/politica/2016/octubre/19/172750=capriles-califico-como-un-chantaje-que-maduro-no-envie-recursos-a-quienes-no-acepten-el-presupuesto-2017)

 

Venezuela frees US Citizen after 4 months in prison

A U.S. citizen was released in Venezuela after four months in prison and forced to go into exile Wednesday, according to the opposition to President Nicolas Maduro. Francisco Marquez, who holds dual U.S. and Venezuelan citizenships, was freed after being imprisoned for four months without a trial. Marquez, an opposition organizer, was arrested during the first stage of the ongoing recall process against Maduro, for allegedly carrying large amounts of cash -- which by itself is not a crime in Venezuela, unless the cash is tied to money laundering.
Legal analysts say forcing Marquez to abandon the country in exchange of giving him his freedom is illegal in Venezuela. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423458&CategoryId=10717)

 

Fr. Arturo Sosa new head of Jesuit order, says neither regime or opposition has plan to change oil dependency

The Jesuit order has elected Venezuela’s Fr. Arturo Sosa as their new Superior General. Former head of the Venezuelan Jesuit province, Fr. Sosa was appointed as Superior of the Jesuits in Venezuela in 1996, guiding through the stormy waters of Hugo Chavez’s dictatorship. In 2004, he was named General Counselor of the Society of Jesus, a position he held until 2011. He has until now served as president of the University in the State of Táchira, a role he has also held since 2004. Fr. Sosa’s election as the 31st General Superior of the Jesuits marks the first time a Latin American has led the Society, and he takes the helm under the Catholic Church’s first Jesuit and Latin American Pope, Francis I. During his first press conference, Fr. Sosa said “the situation in Venezuela is very hard to explain to someone who does not live there”, adding that the entire nation lives on petroleum income which is solely administered by the state and this makes forming a democratic society very uphill. He added that the “income fueled model” headed by Chavez and Maduro “cannot be sustained”, and that neither the government or the opposition “have a plan” to resolve that situation. Fr. Sosa insisted on the need to “build bridges” because “no one wants the violence that exists any more”. (Catholic News Agency: http://www.catholicnewsagency.com/news/venezuelan-fr-arturo-sosa-elected-as-new-head-of-jesuit-order-75293/; and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/18/172552=nuevo-“papa-negro”-asegura-que-ni-gobierno-ni-oposicion-tienen-un-plan-para-venezuela)

 

Brazil to evaluate situation of Venezuelans arriving at border

The Brazilian government has said it will evaluate the situation of about 1,000 Venezuelans who have crossed the shared border to take up residence in the northern state of Roraima, where authorities are asking for federal help to take care of them. Justice Minister Alexandre de Moraes met with Roraima Gov. Suely Campos, who asked for federal funds to take care of the needs of the immigrants. According to official figures from the Justice Ministry, since January some 1,800 Venezuelans have entered Roraima and requested asylum or refuge for various reasons, including alleged political persecution in their homeland. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423455&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/brazil-concerned-about-inflow-venezuelans-across-the-border_623059)

 

Venezuelan and Colombian authorities capture ELN guerrilla leader

Operating jointly, Venezuelan and Colombian authorities have captured a leader of Colombia’s ELN guerrilla on Venezuelan territory, says the Colombian navy. Operating under code name “Felipe”, he is an expert in explosives who has perpetrated attacks on Colombian forces and kidnappings in the El Amparo area along the Arauca river in Southern Venezuela. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/internacionales/2016/octubre/19/172716=autoridades-colombianas-y-venezolanas-capturan-a-jefe-de-guerrilla-eln)

 

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.

 

 

 

July 05, 2016

International Trade

12 food ships anchored in Bolipuertos

A total of 12 food ships are anchored at Puerto Cabello, Carabobo state. This was announced by Food Minister General Rodolfo Marco Torres, who says part this includes boats bearing yellow corn, two with soybeans, and another vessel is currently offloading 30,000 tons of white corn. More in Spanish: (Notitarde; http://www.notitarde.com/Hay-12-buques-de-alimentos-anclados-en-Bolipuertos/Economia/2016/07/02/1007351/)

 

Táchira state governor calls for reopening border

Táchira border state governor, Lieutenant José Vielma Mora, has called for reopening the border with Colombia to increase trade. He also speaks of building a refinery along the border to supply Colombia with fuel, as he conducted an inspection of a border pass jointly with the governor of Colombia’s bordering state of Norte de Santander, William Villamizar. Both governors agreed on the need to restore the important trade, social, political and cultural exchanges between both nations. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/julio/2/161414=gobernador-vielma-mora-evalua-construir-una-refineria-en-la-frontera)

 

 

Logistics & Transport

Aeronautic services are now officially priced in US dollars

The Transport and Public Works Ministry has published official dollar tariffs for aeronautic services in Venezuela, at the Maiquetía International Airport and all other airports under the state control. Service to Latin America and the Caribbean will cost US$ 3,000; to the US AND Canada, US$ 3,300 and to Europe, US$ 5,000. More in Spanish: (Notitarde; http://www.notitarde.com/Fijan-tarifas-del-servicio-aeronautico-en-dolares/Economia/2016/06/30/1007156/; El Nacional, http://www.el-nacional.com/economia/Fijan-tarifas-dolares-servicio-aeronautico_0_875912582.html; El Universal, http://www.eluniversal.com/noticias/economia/nuevas-tarifas-para-servicio-aeronautica-son-fijadas-dolares_317306)

 

 

Oil & Energy

Venezuela oil price falls below us$ 40

The price Venezuela receives for its mix of medium and heavy oil fell back below US$ 40 as markets and oil prices around the world collapsed on a surprise decision to leave the European Union by the U.K.  According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending July 1 was US$ 39.75, down 41 cents from the previous week's US$ 40.16. According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 31.15 for the year to date. Venezuela's average oil price for 2015 was US$ 44.65, down from 2014's US$ 88.42, below 2013's US$ 98.08, 2012's US$ 103.42 and 2011's US$ 101.06, 2010's US$ 72.43, and even 2009’s average price of US$ 57.01. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415590&CategoryId=10717)

 

PDVSA says 2015 revenue tumbled on oil price fall

State oil company PDVSA's 2015 revenue tumbled 41% from the previous year, the company announced, as a result of a steep drop in oil prices that has pushed this nation into economic crisis. Revenue dropped to US$ 72.2 billion from US$ 121.9 billion the year before, while net profit fell to US$ 7.3 billion compared with US$ 9.1 billion the previous year, the company said. Economists tend to focus on PDVSA's revenue because of its multibillion-dollar contributions to government campaigns make profit figures less relevant in assessing performance than they are for private firms. PDVSA's transfers to social programs in 2015 were US$ 9.2 billion, and state development fund Fonden received US$ 974 million. According to the financial results of fiscal year 2015, Pdvsa’s oil output averaged 2.7 million barrels per day (bpd). However, the company’s head Eulogio del Pino claims the “industry produced an equivalent of 3.8 million barrels of oil.” (Reuters, http://www.reuters.com/article/us-venezuela-pdvsa-idUSKCN0ZJ02T; Bloomberg, http://www.bloomberg.com/news/articles/2016-07-03/venezuela-s-pdvsa-revenue-plunges-amid-commodity-price-collapse; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-oil-revenues-plummet-407-2015_317708)

 

Maduro ends power rationing as drought eases

Venezuela is ending an electricity rationing program launched in April in response to a severe drought that crimped the operations of the nation's hydroelectric generators, President Nicolas Maduro on Friday. "As of Monday we can say that the power administration plan will stop and electrical service will function normally throughout the country," Maduro said in a televised broadcast. "Today we can say that Guri has recovered and we have the conditions under which power service can function normally." Heavily subsidized electricity has spurred one of the region's highest rates of power consumption and left the state-run utilities with limited revenue. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0ZI01B)

 

Amuay refinery ups output, restarts distillation unit

Venezuela's 645,000 barrel-per-day (bpd) Amuay refinery has restarted a distillation unit and is now processing 350,000 bpd compared with 160,000 bpd before, according to a union leader and a refinery worker who asked not to be identified and said Amuay's 180,000 bpd distillation unit No. 5 was producing at 140,000 bpd. The refinery's cat cracker is operating at around 70,000 bpd, said union leader and government critic Ivan Freites. The refinery's flexicoker unit remains shuttered but is expected to be operational again within 20 days, he said. (Reuters, http://www.reuters.com/article/us-refinery-operations-pdvsa-amuay-idUSKCN0ZH62B)

 

Harvest Natural Resources dumps Venezuela operations

Harvest Natural Resources, Inc. (HNR) has announced that it and its wholly-owned subsidiary, HNR Energia B.V. (HNR Energia), have entered into a share purchase agreement with CT Energy Holding SRL, a private investment firm (CT Energy), to sell all of the company’s interest in Venezuela. Under the terms of the Share Purchase Agreement, CT Energy will acquire HNR Energia’s 51% interest in Harvest-Vinccler Dutch Holding B.V., a Netherlands company, through which all of Harvest’s Venezuelan interests are owned, and CT Energy or an affiliate will deliver to Harvest US$ 80 million in cash, subject to certain adjustments, and a $12 million six-month 11% note payable by CT Energy or such affiliate. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415544&CategoryId=10717)

 

PDVSA to export gas to Colombia

Petroleum and Mining Minister Eulogio del Pino announced that state-run oil company Petróleos de Venezuela (PDVSA) would soon begin to export gas to Colombia, as part of the Mariscal Sucre oil project. Del Pino, who is also Pdvsa’s head, stressed the importance of gas export, which will be conducted from Cardón gas field in north-western Falcón state. This is one of the world’s largest gas fields, whose operations began last year with private investment. (El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-export-gas-colombia_317684)

 

Maduro meets with US energy company representatives

President Nicolás Maduro on Friday met with Joseph Kennedy, the founder of US non-lucrative Citizens Energy Corporation, at the Miraflores Presidential Palace downtown Caracas, for a meeting that was also attended by Foreign Minister Delcy Rodríguez and corporation’s representatives. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-meets-with-energy-company-representatives_317716)

 

 

Economy & Finance

Central Bank reportedly provides full statistics to the IMF for the first time in 12 years

A source within Venezuela’s Central Bank (BCV) says the institution has provided the International Monetary Fund with full statistics for the first time in 12 years. The same source says the government ordered the BCV to provide statistics for the first time since 2004, when the late Hugo Chavez ordered IMF offices in Venezuela closed. Analysts believe the government may be seeking some type of loan or financial aid from the IMF, or that it could be getting ready to draw upon a larger portion of drawing rights from the institution, since Venezuela has used up all those it could freely cash in. Both options would require providing economic data for the IMF to evaluate. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Banco-Central-Venezuela-estadisticas-FMI_0_877712316.html)

 

Bernal admits expropriations have failed

Freddy Bernal, who heads the Control and Command Center for the government’s Local Supply and Production Local Committee (CLAPs), has admitted that past expropriations have failed. He says “in the past we took some steps, such as expropriating some companies and, unfortunately, we did not make them productive, or they failed in our hands”. He says they are now “sitting down with business to establish joint ventures, 60% government, and 40% private, in several areas: fishing, industry, manufacture”. More in Spanish: (Noticieron Venevision: http://www.noticierovenevision.net/economia/2016/julio/3/161460=freddy-bernal-reconocio-que-las-expropiaciones-fracasaron; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/bernal-admitio-que-las-expropiaciones-fracasaron.aspx#ixzz4DR1hOrkR)

 

Only 10% of all companies have received FOREX through the DICOM system, according to a poll taken at CONINDUSTRIA’s 2016 meeting; and only 2% received FOREX through the officially controlled preferential rate. The poll also shows that 47.5% of industries have raw materials inventories lower than 3 months. 81% have lowered production, and another 56% expect to lower production within the next 6 months. More in Spanish: (Notitarde: (Notitarde; http://www.notitarde.com/Solo-10-de-las-empresas-han-recibido-dolares-Dicom/Economia/2016/06/30/1007155/)

 

“Venezuela’s economic indicators at this time are, by far, the worst in history”, says Luis Vicente León, of DATANALISIS. He says 65% of the population prefers the black market to buy goods that are price-controlled, leading to a surcharge of an average 300 percentage points about official prices. “The gap between official and black market prices is some 80-100 times”. A 10% drop in overall consumption is expected this year. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Indicadores-economicos-Venezuela-momento-historia_0_875912744.html)

 

 

Politics and International Affairs

Obama urges Venezuela to respect democratic process, recall referendum

US President Barack Obama has weighed in on Venezuela’s political turmoil, calling on the government to release what he called “political prisoners” and to respect the country’s National Assembly.  The head of state made the comments in a press conference from the North American Leaders Summit in Ottawa, Canada, where he also urged both political factions in Venezuela to participate in dialogue. He was accompanied by his Mexican and Canadian counterparts, Enrique Peña Nieto and Justin Trudeau. "Given the very serious situation in Venezuela and the worsening plight of the Venezuelan people, together we're calling on the government and opposition to engage in meaningful dialogue and urge the Venezuelan government to respect the rule of law and the authority of the national assembly," Obama said at a news conference with the leaders of Canada and Mexico. "Political prisoners should be released, the democratic process should be respected and that includes legitimate efforts to pursue a recall referendum consistent with Venezuelan law."  (Reuters: http://www.reuters.com/article/us-venezuela-usa-obama-idUSKCN0ZF2KV; MSNBC: http://nsnbc.me/2016/07/02/obama-urges-dialogue-in-deadlocked-venezuela-sides-with-opposition/)

 

Argentina’s Macri accuses Venezuela of violating “every human right”

Argentina’s President Mauricio Macri has accused the Venezuelan regime of “violating every human right”, and hopes for a recall referendum as soon as possible. He says the Maduro regime “has brought famine and neglect to the Venezuelan people, which is why they need a referendum, they need to have elections as soon as possible”. Asked whether this position clashes with Argentina’s stance at the Organization of American States on whether to apply the Democratic Charter, he said: “We have done what we have been doing. We are seeking different routes to bring about this result, elections as soon as possible and always upholding our commitment to defend human rights in Venezuela”. More in Spanish: (Clarin: http://www.clarin.com/mundo/Macri-Venezuela-violar-derechos-humanos_0_1607239347.html

 

Paraguay seeks to exclude Venezuela from MERCOSUR

Paraguay has formally asked for a special meeting of MERCOSUR foreign minister to examine Venezuela’s domestic political situation in the light of the 1998 Ushuaia Protocol, which establishes a “democracy clause” calling for excluding any country that violates democratic order from the regional bloc. Paraguay’s ambassador to MERCOSUR, Hugo Saguier, who delivered the request to Uruguay’s Foreign Minister Rodolfo Nin, says “we are calling for using the Democratic Charter and the Urshuaia Protocol because we believe Venezuela is doing through a democratic crisis”. He also said Paraguay is upset because Uruguay and Argentina unilaterally called off a meeting of heads of state to transfer the pro tem Presidency of MERCOSUR from Uruguay to Venezuela, and instead called on the group’s foreign ministers to do so. Nin has replied that transferring the pro tem presidency is a matter of rules and does not bear upon political matters. More in Spanish: (El Observador: http://www.elobservador.com.uy/paraguay-pide-discutir-la-exclusion-venezuela-del-mercosur-n935501; Noticiero Venevision: http://www.noticierovenevision.net/internacionales/2016/julio/4/161618=uruguay-asegura-que-la-entrega-de-la-presidencia-pro-tempore-a-venezuela-esta-apegada-al-caracter-juridico)

 

OAS Legal Counsel says “the Democratic Charter is already being applied” to Venezuela

Jean Michel Arrighi, Chief Legal Counsel to the Organization of American States, says the Hemispheric Democratic Charter is being applied to Venezuela from the very moment Secretary General Luis Almagro rendered his report on June 23^rd. Arrighi also says Article 20 of the Charter empowers the Secretary General to act “when the constitutional order is altered so as to seriously upset the democratic order”, and he would be remiss in offering assistance if he didn’t. The Maduro regime argues that when there is a legitimate government in a nation, the Secretary General has no right to act, but Arrighi says that Article 20 is intended for the case in which there is in fact a legitimate government and that is why it involves diplomatic efforts. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/30/responsable-juridico-de-la-oea-la-carta-democratica-ya-se-esta-aplicando/)

 

International Socialist organization advocates recall referendum in Venezuela this year

Member parties of the International Socialist organization have issued a communiqué voicing their concern over Venezuela’s state of affairs and made an appeal for “a real and effective dialogue between the Venezuelan government and opposition.” They also recommend holding the recall referendum this very year, and express support for an OAS statement in support of the initiative of former presidents José Luis Rodríguez Zapatero of Spain, Leonel Fernández of the Dominican Republic, and Martín Torrijos of Panama. (El Universal, http://www.eluniversal.com/noticias/daily-news/socialist-international-advocates-recall-referendum-venezuela-this-year_317711)

 

Zapatero discusses dialogue efforts in Venezuela with the European Union

Federica Mogherini, the European Union’s High Commissioner for Foreign Affairs, met with Spain’s former President José Luis Rodríguez Zapatero, to discuss the Union’s support of efforts for a “dialogue in Venezuela”. Zapatero says the dialogue he is trying to promote is “a long, hard and difficult process”, and that their efforts are in an exploratory phase. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/internacionales/2016/junio/30/161232=zapatero-aborda-con-la-union-europea-apoyo-al-dialogo-en-venezuela)

 

Ramos cautions that Supreme Tribunal plots sentence nullifying recall referendum

Henry Ramos Allup, President of the National Assembly, is expecting a Supreme Tribunal (TSJ) sentence which would nullify recall referendum proceedings to date, and order a new collection of 1% signatures for a petition to begin the process. He says the decision was planned by pro regime legislators and members of the TSJ’s Constitutional Chamber, and would be in the hands of Justice Luis Damiani Bustillos; he adds that the National Elections Council would then call for regional elections, to vote for governors. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/julio/1/161373=ramos-allup-advierte-sobre-sentencia-del-tsj-que-anule-el-proceso-de-rr; El Nacional, http://www.el-nacional.com/politica/PSUV-asoma-TSJ-ordenara-revocatorio_0_875912729.html)

 

Borges says recall referendum is not negotiable

Julio Borges, leader of the majority opposition bloc in the National Assembly says the proposed recall referendum is a Constitutional right of the Venezuelan people and not a subject for discussion in any possible talks with the government. “That is non-negotiable, that does not exist, that is a right that is moving forward and no one can stop it, if the government wants to talk about how to reform the economy, about respect toward the National Assembly, about how to free political prisoners, about how to reenergize productivity, those matters are welcome because they are national problems; but there are matters that are not subject to talks, and among them the recall referendum is not been subject for talks or any sort of negotiation”, he says. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/julio/4/161575=borges-aseguro-que-el-rr-no-es-un-tema-de-discuta-en-una-eventual-mesa-de-dialogo-con-el-gobierno)

 

Ramos says military high command backs President, not Constitution.

President Nicolas Maduro has demanded absolute loyalty from Venezuela’s military in order to carry forth Bolivarian ideals and the Chavez legacy. At the same time, National Assembly President Henry Ramos Allup says “the high command of the Armed Forces has chosen to support President Nicolás Maduro over supporting the Constitution”; and adds that dialogue is impossible under such conditions: “Take note: It is impossible to dialogue with a military gun pointing at your head”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/03/nicolas-maduro-exige-la-maxima-lealtad-de-su-fuerza-armada/; Noticieron Venevision: http://www.noticierovenevision.net/politica/2016/julio/3/161469=ramos-allup-destaco-que-la-fanb-apoya-a-maduro-antes-que-respaldar-la-constitucion)

 

US accuses Venezuela of complicity in human trafficking

The United States has again included Venezuela, along with Haiti and Belize, on the list of countries that are not making enough efforts to combat people trafficking. US President Barack Obama now has 90 days to decide if sanctions will be imposed on the nations on the “black list”. Those sanctions could include freezing non-humanitarian and non-commercial aid or denying the countries loans from multilateral institutions. Venezuela was included on the blacklist in 2014 and remains there after appearing for several previous editions in “special observation,” the next-lowest category where Cuba is. “The Venezuelan government does not fully comply with minimum standards for the elimination of (human) trafficking and is not making significant efforts to do it so,” the report reads. (Today Venezuela: http://todayvenezuela.com/2016/07/04/us-accuses-venezuela-of-complicity-in-human-trafficking/); and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/eeuu-acusa-venezuela-complicidad-con-trafico-personas_317309)

 

Curfew imposed on Delta Amacuro state due to food riots

Delta Amacuro state governor Lizeta Hernández issued a 24-hour curfew after food riots led to 146 arrests in the state’s capital, Tucupita, in far Eastern Venezuela, bordering Guyana. (Noticieron Venevision: http://www.noticierovenevision.net/nacionales/2016/julio/1/161308=decretan-toque-de-queda-en-delta-amacuro-debido-a-hechos-irregulares-en-tucupita)

 

 

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.