July 11, 2019

Oil & Energy

CHEVRON's Venezuela oil assets threatened as Trump weighs extending joint venture waiver

The Trump administration faces an important decision later this month, one that could either maintain the status quo, or one that could escalate the “maximum pressure” campaign on Caracas. In January, the U.S. government tightened sanctions on Venezuela, but issued a series of waivers to oil companies operating in joint ventures with PDVSA in Venezuela. The waivers expire later this month, and the U.S. government is considering letting them expire to force some of the companies out in order to further tighten the fiscal noose around the Venezuelan government. That could affect operations for CHEVRON, HALLIBURTON, SCHLUMBERGER, BAKER HUGHES and WEATHERFORD International, according to S&P Global Platts. If the Trump administration followed through, the companies would have 60 to 90 days to wind down their operations, S&P reported. CHEVRON plays a crucial role in keeping Venezuela’s oil sector running, such as it is. The American oil major is active in four joint ventures with PDVSA, and its share of production accounts for 42,000 b/d, although total output from the four sites exceeds 200,000 b/d. The exit of Chevron and other international companies would be especially painful for Maduro’s regime because the joint ventures have proven to be much more resilient than PDVSA’s sole operations. Foreign companies bring capital and technical expertise, and when the industry really began to deteriorate in 2017 and 2018, output from the joint ventures held up better than production from projects run only by PDVSA. The upshot is that if the U.S. lets the waivers expire in late July, Venezuela’s oil production could resume its downward slide, ending a several-month hiatus that saw output stabilize. “The service companies leaving will have some additional effect since they are involved in the operation of at least a third of the rigs in activity. However, the U.S. government is also wary of allowing oil companies from China and Russia to step into the void. The prospect of greater influence for Moscow and Beijing in Venezuela might be enough for the Trump administration to extend the waivers to CHEVRON. The tradeoff is hardly theoretical. Venezuela's government threatens to nationalize CHEVRON's oil assets if the Trump administration does not extend a sanctions waiver that expires July 27. In perhaps an attempt to clarify what is at stake, an unnamed official in the Venezuelan presidential palace told Argus Media that if the Trump administration lets the waivers expire, Maduro’s government would seize Chevron’s assets and “offer Russian, Chinese and other non-US oil companies an ‘opportunity to acquire’ them,” Argus reported. In fact, the official said that “discreet discussions” have already started with ROSNEFT and CNPC. It’s unclear how the Trump administration will approach what appear to be competing geostrategic goals, but Venezuela’s oil sector hangs in the balance. White House advisor Larry Kudlow said yesterday the administration was considering a possible waiver extension. “It is under discussion,” Kudlow said. “I don’t know about the license. That will be determined in the future. It’s under discussion right now,” he said. (Reuters, https://www.reuters.com/article/us-venezuela-politics-usa-chevron/white-house-discussing-renewing-license-for-chevron-to-operate-in-venezuela-idUSKCN1U42NG; Bloomberg, https://www.bloomberg.com/news/articles/2019-07-09/venezuela-license-for-chevron-under-discussion-kudlow-says; The Fuse: http://energyfuse.org/venezuela-faces-more-outages-as-trump-admin-mulls-escalation/; Seeking Alpha: https://seekingalpha.com/news/3476997-chevrons-venezuela-oil-assets-threatened-seizure)

 

Vessels change names or go dark to ship Venezuelan crude to Cuba

Stopping the flow of Venezuelan oil to its ally Cuba might prove harder than the U.S. expected. Tankers are being renamed and vessels are switching off their transponders to sail under the radar of the U.S. government. The vessel Ocean Elegance, an oil tanker that has been delivering Venezuelan crude to Cuba for the past three years, was renamed Oceano after being sanctioned in May. The ship S-Trotter, another one that’s on the sanctions list, is now known as Tropic Sea, according to data compiled by Bloomberg. (Bloomberg, https://www.bloomberg.com/news/articles/2019-07-08/vessels-change-names-go-dark-to-ship-venezuelan-crude-to-cuba)  

 

Economy & Finance

Venezuela creditors push back on Guaidó's debt restructuring plan

Creditors holding Venezuelan debt on Tuesday pushed back on debt restructuring plans backed by opposition leader Juan Guaidó, urging a “fair and effective” framework for talks and improved communications with investors holding defaulted bonds. The main committee of Venezuela creditors said it opposed requests for a U.S. executive order that would prevent asset seizures by investors and disagreed with a proposal to give different treatment to debts owed to Russia and China. But the statement added that restructuring would not begin until the end of a “humanitarian crisis,” in reference to the hyperinflationary collapse overseen by President Nicolas Maduro that has fueled malnutrition and disease. “A new government should work with creditor parties, such as the Committee, to agree on the design of the restructuring process and to negotiate the financial and other terms of the restructuring,” the statement said. (Reuters, Venezuela creditors push back on Guaidó's debt restructuring plan)

 

Politics and International Affairs

Maduro regime and opposition talks conclude in Barbados, no deal announced; Putin remains hopeful

Talks between Venezuela's government and the opposition about how to address the country's political crisis concluded on Wednesday (Jul 11) with no announcement of a deal. "This round of talks for dialogue and peace in Barbados has concluded," Information Minister Jorge Rodriguez, who led the government's delegation, wrote on Twitter late on Wednesday, describing it as "a successful exchange promoted by the government of Norway." Rodriguez tweeted that the discussions in Barbados had ended and served as a space for the "settlement of disputes through constitutional and peaceful channels." A Venezuelan opposition source who asked not to be identified said the two sides could meet again on Monday in Barbados. The press team for opposition leader Juan Guaidó, who has been recognized by more than 50 countries as Venezuela's legitimate leader, said the opposition would make a statement about the talks in the coming hours. Rumors have been circulating in recent days that the opposition was seeking a presidential election within nine months and that Maduro would not be in power during the vote. Socialist Party Vice President Diosdado Cabello, who is influential in Maduro's regime, on Wednesday night dismissed the idea that any presidential election was in the works. "Here there are no presidential elections; here the president is named Nicolas Maduro," Cabello said during a televised broadcast. Russian President Vladimir Putin said on Thursday he hoped Norway-brokered talks between Venezuela's government and the opposition would normalize the situation in country and bring an end to political turmoil. In referring to the talks, interim president Juan Guaidó had previously asked one and all “not to commit the mistake of seeing a single mechanism as the solution,” and for that reason insisted on maintaining both internal and foreign pressure on the party in power. (Channel News Asia: https://www.channelnewsasia.com/news/world/venezuela-talks-with-opposition-conclude-in-barbados--no-deal-announced-11712606; EFE: https://www.efe.com/efe/english/world/venezuelan-government-says-talks-with-opposition-concluded-successfully/50000262-4020424; The Jerusalem Post: https://www.jpost.com/Breaking-News/Putin-I-hope-Venezuela-talks-will-normalize-situation-595359; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2480869&CategoryId=10717)

 

U.S. military plans to battle Russia, China and Iran's 'most disturbing' influence in Venezuela

The head of the Pentagon's Southern Command warned that Russia, China and Iran were expanding their influence in Latin America, particularly in Venezuela, where they support a government the United States seeks to depose. In his testimony to the Senate Armed Services Committee, Southern Command chief Air Force Admiral Craig Faller identified Moscow, Beijing and Tehran as the primary international obstacles to Washington's interests as the trio backed Nicolás Maduro in the face of a challenge posed by interim leader Juan Guaidó. The National Assembly head declared him acting president in January and was almost immediately recognized by the U.S., which cut ties with Maduro and has attempted to isolate him globally. "Russia, in their own words, is protecting their 'loyal friend,' to quote, by propping up the corrupt, illegitimate Maduro regime with loans and technical and military support," Faller said. "China, as Venezuela's largest single-state creditor, saddled the Venezuelan people with more than $60 billion in debt and is exporting surveillance technology used to monitor and repress the Venezuelan people. Iran has restarted direct flights from Tehran to Caracas and reinvigorated diplomatic ties." "Along with Cuba, these actors engage in activities that are profoundly unhealthy to democracy and regional stability and counter to U.S. interests," he added, calling for the "right, focused and consistent military presence" to counter these countries' "most disturbing" growing influence in the region. "These geopolitical tensions are inimical to stability across the world and we look forward to world leaders to continue to do their best to ensure that conflicts on trade and military are avoided”, he added. (NEWSWEEK: https://www.newsweek.com/venezuela-us-battle-russia-china-iran-influence-most-disturbing-1448545)

 

Russian equipment to be part of military drills in Venezuela

Russia on Thursday said its military equipment will be part of military drills in Venezuela scheduled for July 24. "Weapons and military equipment that are currently present in Venezuela and that the National Bolivarian Armed Forces use is mostly Russia-made. So, it just cannot be otherwise. I don't know if they have purchased any kinds of equipment in other countries, but the army is equipped with our weapons to a significant extent, so it will be used as well," Sputnik quoted Russian Deputy Foreign Minister Sergei Ryabkov as saying. Ryabkov also noted that there are almost no Russian military experts in Venezuela right now. "A rotation has taken place. As I see it, the presence of our personnel there is close to zero. However, this does not mean that it will not appear there when the need may arise to maintain the equipment", he said. "We are concerned about a continuous melody from Washington, where there is a tendency to talk about all options being on the table and nothing can be excluded. That deliberately creates a sense of uncertainty, of what is possible and what is not in terms of U.S. participation," Ryabkov told Spanish newspaper El Pais on Wednesday. (Business Standard: https://www.business-standard.com/article/news-ani/russian-equipment-to-be-part-of-military-drills-in-venezuela-119071100712_1.html; NEWSWEEK: https://www.newsweek.com/venezuela-us-battle-russia-china-iran-influence-most-disturbing-1448545)

 

Against family wishes, Venezuela government buries navy captain who died in captivity

The Maduro regime on Wednesday buried the remains of a navy captain who died in military custody last month, despite the opposition of family members who say he was tortured to death and want an independent autopsy.  Rafael Acosta was detained in June 21 for alleged participation in a coup plot but died following a week in custody of military intelligence agency DGCIM. Lawyers said he showed signs of severe beatings.  “What can be interpreted is that government authorities are (saying) ‘I killed him, I bury him,’” said Alonso Medina, a lawyer representing Acosta’s family. Acosta’s wife, Waleswka Perez, had demanded that the government hand over his body and called for an U.N. investigation into his death, which was condemned by the United States as well as the Lima Group of Latin American nations. An official autopsy showed that Acosta died of “polytrauma with a blunt object,” Medina said. (Reuters: https://www.reuters.com/article/us-venezuela-politics-captain/against-family-wishes-venezuela-government-buries-navy-captain-who-died-in-captivity-idUSKCN1U52M0)

 

U.S. sanctions Venezuela's counter-intelligence agency after death of navy captain

The United States on Thursday imposed sanctions against Venezuela's military counter-intelligence agency following the death in custody of a Venezuelan navy captain amid allegations of torture. The U.S. Treasury said on its website that it had sanctioned the General Directorate of Military Counterintelligence. U.S. Treasury Secretary Steven Mnuchin said the "politically motivated arrest and tragic death" of Rafael Acosta was "unwarranted and unacceptable." The Maduro regime confirmed the death on June 29 of Acosta, who was arrested eight days earlier for alleged participation in a coup plot. Human rights organizations and political leaders have accused Maduro's government of torturing Acosta to death and refusing to clarify the circumstances. (CBC: https://www.cbc.ca/news/world/us-sanctions-venezuela-counterintelligence-navy-death-1.5208073)

 

Ex-Venezuela spy chief says Maduro ordered illegal arrests

As Nicolás Maduro began to lean on the brawny 55-year-old General Manuel Cristopher Figuera to do his dirty work — ordering him to jail opponents and victims of torture — the Cuban and Belarusian-trained intelligence officer gradually lost faith. In a show of nerve, he betrayed the leader he met with almost daily and secretly plotted to launch a military uprising that he said came close to ousting Maduro. Now one of the most prominent defectors in two decades of socialist rule in Venezuela has come to Washington seeking revenge against his former boss. It’s unclear whether Cristopher Figuera still has influence inside the government and can collect evidence against his former comrades. But he’s talking a big game. Cristopher Figuera for the first time provided details of what he said was Maduro’s personal commissioning of abuses, including arbitrary detentions and the planting of evidence against opponents. As the deputy head of military counterintelligence and then director of the feared SEBIN intelligence police, Cristopher Figuera stood alongside Maduro as Venezuela was coming apart. During the freefall, he said, he witnessed and played a role in abuses, including not speaking out when confronted with evidence of torture by others and the arbitrary detention of a prominent journalist. But he said Maduro’s most-brazen order — and one of Cristopher Figuera’s biggest regrets — was his role trying to break opposition leader Juan Guaidó’s resolve by going after his inner circle. Initially, he said, Maduro wanted to arrest Guaidó’s mother. When Cristopher Figuera pointed out that she was undergoing cancer treatment, the focus shifted to Roberto Marrero, Guaidó’s chief of staff, who has been held since March on accusations of running a “terrorist cell” bent on carrying out assassinations. Cristopher Figuera said he then told Maduro that he did not have legal cause. “How can I jail him?” Cristopher Figuera recalled asking Maduro in a tense meeting with top officials at Fort Tiuna in Caracas less than 72 hours before a violent raid on Marrero’s house. “He told me, ‘That’s not my problem. Plant some weapons on him. Do what you have to do.'” Cristopher Figuera expects one day to be called as a witness by the International Criminal Court, which is carrying out a preliminary investigation into the Maduro government at the request of several Latin American nations, France and Canada. Still, he acknowledges that he obediently carried out orders to spy on 40 or so of Maduro’s top opponents, using wiretaps as well as electronic and on-the-streets surveillance, and reporting to his boss every two hours any noteworthy movements. He claims to have tried to persuade Maduro to change course, sending him a two-page letter in early April that urged him to appoint a new electoral council and call early elections. He thought the move would have been a strategic retrenchment to regain the upper hand amid mounting international pressure.  He said he’s in constant contact with high-level officials — generals, deputy ministers and heads of government institutions — all of whom despise Maduro and want to see him leave but are afraid to act. (AP: https://www.columbian.com/news/2019/jul/04/ex-venezuela-spy-chief-says-maduro-ordered-illegal-arrests/)

 

With tenacity and torture, Venezuela’s awful regime is hanging on

Almost six months since Juan Guaidó began his attempt to remove Venezuela’s leftist dictatorship, the strain is showing. The 35-year-old’s jet-black hair is peppered with grey. His eyes seem weary. He has dropped his snappy slogan, “vamos bien” (“we are doing well”). Now his demoralized supporters utter it sarcastically. But the need to end the rule of Nicolás Maduro is as strong as ever. His mismanagement, plus sanctions imposed in January on Venezuela’s oil industry by the United States, will cause the economy to shrink by more than 25% this year. In dollar terms, the drop in output since Maduro became president in 2013 will be around 70%. Francisco Rodríguez, an economist in New York who has advised the moderate opposition, warns of famine. On July 5th the un High Commissioner for Human Rights published evidence that security forces loyal to the government, such as the FAES, had murdered at least 6,800 people from January 2018 to May 2019. It documented cases of torture, including the use of electric shocks and waterboarding. Days before it was published, Rafael Acosta, a reserve naval captain accused of plotting to overthrow Maduro, appeared in court in Caracas, bruised and unable to say anything but “help me” to his lawyer. He died hours later. Mr. Guaidó, the head of the opposition-controlled legislature, had hoped to lead a velvet revolution. That plan has suffered one reversal after another. Although Maduro claims to “sleep like a child” he has cause for insomnia. The April uprising revealed splits in the regime.  The state-owned oil giant PDVSA, the main foreign-exchange earner, is trying to shift exports from the United States to Asia. Corruption, mismanagement by executives chosen for their loyalty to the regime and now sanctions has caused output to plunge. Although Venezuela has the world’s largest proven oil reserves, much of the country is suffering from shortages of petrol. “The regime’s entire focus now is survival,” says a Caracas-based diplomat. “The rulebook has been thrown away.” Maduro has quietly abandoned elements of the socialism brought in by his predecessor. The dollar has become accepted almost everywhere. Inflation has plummeted, to a still stratospheric 445,482%. But these moves towards saner economic policies have so far done little to ease hardship for most people. The main hope for a political transition. It is hard to imagine a resolution to Venezuela’s agony that does not include Maduro’s departure and a plan to hold elections with international monitoring. If that is to happen, the president will have to sleep less and worry more. (The Economist: https://www.economist.com/the-americas/2019/07/13/with-tenacity-and-torture-venezuelas-awful-regime-is-hanging-on)

 

John Bolton uses Twitter to try to flip Venezuela's defense minister

It looks like the White House national security adviser is trying to get Venezuela's defense secretary and military chief to flip. Four out of six John Bolton tweets since Monday evening have targeted Venezuelan defense minister Vladimir Padrino. Bolton's focus has been warning Padrino that he serves an illegitimate leader and that he will be held accountable for deaths that the Venezuelan military inflict under Nicolás Maduro's orders. In the first of what would be a three-day series of tweets addressed to the Maduro regime’s Defense Minister General Vladimir Padrino, Bolton argued that Maduro "deprived your soldiers, relied on illegal armed groups & 'colectivos' to violate the rights of Venezuela's people & has systematically executed political opponents." "Why do you support a tyrant whose inability to govern is visible for all to see?" Bolton asked. Shortly after Guaidó tried and failed to overthrow Maduro in late April, Bolton alleged that Padrino was among the socialist leader's top officials who agreed to switch sides, but ultimately failed to do so. Padrino has denied the claim and Monday was neither the first nor last time Bolton went off against Maduro and his administration on Twitter. "Do you want to be held to account for the arrest, torture and extrajudicial killings of your fellow Venezuelans, including members of the FANB? The atrocities are being documented for the world to see," Bolton tweeted Tuesday, using an acronym for Venezuela's National Bolivarian Armed Forces. "Are you proud to serve Maduro, a despot who has ordered the killing of thousands of your fellow Venezuelans in the last 18 months?" On Wednesday, Padrino responded, tweeting that Bolton "insists on an unhealthy attitude against me, like an obsessive-compulsive disorder, through recurrent, persistent and intrusive statements, characteristic of the insidious political blindness to which they resort to failing to divide the FANB." Padrino linked Bolton's "obsessive doubt" to the "clumsy and failed strategy he sold to Trump" and said that his continued position as defense minister "represents a mental torture for Bolton." Bolton hit back about 15 minutes later, arguing that the "Venezuelan Constitution does not call for the death of over 9,000 of your fellow Venezuelans because they voice disagreement with Maduro." He continued: "Remember your responsibilities to defend the constitution and the Venezuelan people."  It's not at all clear that Bolton's latest effort here will have any more success than the last time around. For one, Maduro has just reappointed Padrino as defense minister. While that might be a case of friends close and enemies closer, it's equally likely to reflect Maduro's increased confidence. (NEWSWEEK: https://www.newsweek.com/us-twitter-iran-venezuela-bolton-1448591; The Washington Examiner: https://www.washingtonexaminer.com/opinion/john-bolton-uses-twitter-to-try-to-flip-venezuelas-defense-minister)

 

Maduro regime’s war on children at a 'breaking point' over lack of medical care

The cries of millions of children still languishing inside Venezuela all too often go unanswered as the deteriorating conditions and the iron-grip of the Maduro regime has set the stage for once eradicated diseases to run rampant, trauma medicine to vanish, infant mortality to drastically spike, and for simple health skirmishes to morph into life-threatening plagues. “The current health situation is at a very delicate breaking point,” Ephraim Mattos, executive director of Stronghold Rescue & Relief, told Fox News. “We will never know the exact numbers of people who have died due to the corruption of the Maduro government, but what is happening in Venezuela – especially to the children – is nothing short of genocide.”  “One of the biggest health crises facing children fleeing Venezuela is simple dysentery caused by the contaminated food and water they are forced to eat and drink just to survive in Venezuela.  The dysentery causes the children to become even more malnourished and dehydrated which only compounds the issue further,” Mattos, who endeavors to reach some of the most famished and dangerous pockets of Venezuela with vital assistance, said. “Children who should be able to not only survive but also thrive, are needlessly dying every single day.” Paloma Escudero, the Global Director of Communication for UNICEF, concurred to Fox News that the UN children’s agency is concerned that Venezuela has reduced children’s access to essential services and increased their vulnerability. “Under-5 mortality increased by more than half between 2014 and 2017. Venezuela went from being a model for malaria eradication in the Americas, with its northern region declared malaria-free by the WHO in 1961, to becoming the largest contributor to the malaria burden in the region,” she said. “Between 2016 and 2017, reported malaria cases increased by over 70 percent. The number of people who died from malaria increased from 54 in 2010 to 456 in 2017.” In addition, UNICEF has recorded 190 suspected cases of diphtheria since the beginning of 2019, leading to 13 deaths. Escudero continued, noted that families are being forced to wake at the crack of dawn to trek their children across the border to the ravished Colombian city of Cucuta, to get them immunized or treated for common childhood illnesses. (Fox News: https://www.foxnews.com/health/venezuelas-war-children-medical-care-lacking)

 

Trinidad criticized for lack of action as Venezuelan migrants flee to the island nation

While large numbers of desperate Venezuelans have flocked to their Spanish-speaking neighbors in South America, more than 98,500 have fled to the Caribbean, according to a 2018 report from the United Nations. There are an estimated 40,000 Venezuelans residing in Trinidad and Tobago, just 10 miles off the coast of Venezuela. With unrest at their shores, Trinidad and Tobago’s government continues to avoid formal asylum legislation. The island nation remains the only country to take in large numbers of Venezuelan migrants without having an official asylum policy in place. It has also not taken political sides on the unraveling situation in Venezuela, instead choosing to remain officially neutral. As a result, the islands’ government is receiving condemnation from world leaders, the country’s own opposition, and asylum-seekers who say the country needs to do more. This leaves desperate families to choose between remaining in their divided homeland or moving to islands where they are unsure if they are safe and welcome. The side effects have led to reports of unlawful detention by the police and the deportation of 82 refugees, actions which the U.N. condemned as illegal. The uncertainty has Venezuelans there living in fear and seeking financial assistance on the black market, where reports of human trafficking are rampant. (NBC News: https://www.nbcnews.com/news/nbcblk/trinidad-criticized-lack-action-venezuelan-migrants-flee-island-nation-n1028246)

 

Spain arrests suspect sought by Venezuela for deadly arson

A Spanish National Court spokesman says that a man sought by Venezuela for allegedly burning a 22-year-old man during anti-government protests two years ago has been jailed in Madrid. Enzo Franchini Oliveros’ arrest was first announced on Wednesday by Venezuela’s top prosecutor, Tarek William Saab. Saab tweeted that Oliveros was sought for public disorder, intentional homicide and terrorism charges related to the burning of Orlando Figuera during a demonstration in May 2017. A Spanish National Police spokeswoman said Oliveros was arrested on Monday in a town near Madrid. A National Court spokesman says the man told Judge Santiago Pedraz during questioning Thursday that he didn’t want to be extradited. A hearing needs to be scheduled for magistrates to decide. (CBS: https://www.cbs42.com/news/international/spain-arrests-suspect-sought-by-venezuela-for-deadly-arson/)

 

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

June 30, 2016

Oil & Energy

PDVSA production down 30% in 6 years, oilfields decline, needs US$ 70-80 price for investments

Venezuela’s crude oil production has shrunk around 30% over the past 6 years according to official data from state oil company PDVSA and the Organization of Petroleum Exporting Countries (OPEC). Production fell from 3.12 million barrels per day to an all-time low of 2.18 MBD, some 900,000 barrels, around 30%. In May, PDVSA denied a drop in production this year but did not provide details on pumping. Last week, at a public ceremony, President Nicolas Maduro himself urged Oil Minister Eulogio Del Pino “to start raising the nation’s oil production during next semester”. Eudis Girot, Executive Director of the United Oil Workers Federation, reported the industry is producing only 2.4 MPD, one million barrels less than in 2008. He says “the company has been abandoned, our drills are in broken down deposits, our own fleet is destroyed”. Oil expert Victor Maldonado says “if there are no resources there is no investment, which is key to developing the industry”. ECOANALITICA Director Alejandro Grisanti says “Venezuela is not getting US$ 500 million every month, or US$ 6 billion per year”, due to the drop in production. At a recent meeting Oil Minister Del Pino admitted investments to meet global oil demand require prices between US$ 70-80 per barrel. He says half of the investments scheduled for 2016 were deferred due to low prices, adding “that will obviously impact production”.  He also admitted there is a 20-25% “natural decline” in oilfields which forces them to “replace 600,000 BPD, simply to maintain (current) production”. More in Spanish: (Panorama: http://www.panorama.com.ve/politicayeconomia/En-6-anos-cayo-30-de-produccion-de-crudo-en-Venezuela-20160628-0118.html; http://www.panorama.com.ve/politicayeconomia/Ministro-Eulogio-Del-Pino-Industria-petrolera-requiere-un-barril-de-al-menos-70-dolares-20160629-0074.html)

 

Venezuela’s oil output decline accelerates as drillers go unpaid

Venezuela’s oil output, already the lowest since 2009, is set to slide further this year as contractors scale back drilling after the cash-strapped country fell more than US$1 billion behind in payments. This nation’s oil production, which generates 95% of export revenue, will decline by about 11% to 2.1 million barrels a day by the end of the year, BARCLAYS estimates. Output is falling largely because oil-services companies aren’t being paid, according to the International Energy Agency. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-27/venezuela-s-oil-output-decline-accelerates-as-drillers-go-unpaid)

 

PDVSA says it has made financing deals with WEATHERFORD, HALLIBURTON

State oil company PDVSA says it has signed financing agreements with services firms HALLIBURTON and WEATHERFORD, PDVSA's president said on Wednesday, following chronic payment difficulties for companies working here. PDVSA has more than US$ 20 billion in outstanding bills to providers, which has led some companies to slow work. The company's access to hard currency has tumbled along with the price of oil, and Venezuela is struggling with triple-digit inflation, a severe recession and heavy bond payments this year and next. "This morning WEATHERFORD signed a financing agreement with us, HALLIBURTON signed yesterday," Eulogio Del Pino, who is also the country's oil minister, said in a speech broadcast on state television. (Reuters, http://www.reuters.com/article/us-venezuela-pdvsa-idUSKCN0ZF2V6)

 

US Supreme Court to hear Venezuela oil rig dispute

The U.S. Supreme Court on Tuesday agreed to weigh Venezuela's bid to block a lawsuit filed by an American oil drilling company that claims this country unlawfully seized 11 drilling rigs six years ago. The high court will review a May 2015 ruling by the U.S. Court of Appeals for the District of Columbia Circuit that allowed one of the claims made by Oklahoma-based HELMERICH & PAYNE International Drilling Company to move forward. The company sued both the Venezuelan government and state-owned oil companies under a U.S. law called the Foreign Sovereign Immunities Act, saying among other things that the property seizure violated international law. (Reuters, http://www.reuters.com/article/us-usa-court-venezuela-idUSKCN0ZE1MV; El Universal, http://www.eluniversal.com/noticias/daily-news/receives-venezuelas-bid-block-helmerichs-lawsuit_317055)

 

 

Commodities

Venezuela seeks additional partnering with South Korea’s POSCO

Foreign Trade and Investment Minister Jesús Faría is in South Korea seeking to expand relations with POSCO, that nation’s largest steelmaker and attract investments to Venezuela. POSCO made an US$ 245 million investment in the Puerto La Cruz (Anzoátegui state) refinery’s deep conversion process. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-busca-ampliar-relaciones-empresa-sider%C3%BArgica-surcoreana)

 

 

Economy & Finance

Central Bank seeks US$ 1 billion from Latin American Reserve Fund

According to sources at the Latin American Reserve Fund (FLAR), Venezuela’s Central Bank (BCV) requested a US$ 1 billion loan, but received only US$ 400 million, drawn against the BCV’s own reserve with the institution. The same source reports that in order to get a billion-dollar loan the agreement would require approval by Venezuela’s National Assembly, in order to comply with FLAR rules which requires clear guarantees. This is not the first time the BCV seeks financial aid from international institutions. For over a year it has been drawing from the International Monetary Fund (IMF), as well as engaging in gold swaps through foreign banks. BCV authorities are concerned about the drop in international reserves, which are now at an all-time low of around US$ 12 billion. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/BCV-millardo-Fondo-Latinoamericana-Reservas_0_875312763.html

 

Companies have reduced operations by 80% due to lack of FOREX

FEDECAMARAS President Francisco Martinez, head of the nation’s largest business federation, reports that scarce foreign exchange has led 90% of all Venezuelan companies to reduce operations by almost 80%, since it is impossible to acquire “raw materials, intermediate goods, machinery and spare parts”. He says political confrontation is hindering economic progress and called for inclusive talks between the government and the private sector, “with measurable, tangible” results for the population. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Empresas-reducido-operaciones-falta-divisas_0_874712788.html)

 

Venezuela received only US$ 1.591 billion foreign investments out of US$ 167.5 to Latin America

According to the 2015 World Report by the United Nations Conference on Trade and Development (UNCTAD), Venezuela received only US$ 1.591 billion in direct foreign investment during 2015, out of US$ 167.5 billion that was directed to Latin America. Most of the amount reported for Venezuela are funds held back from repatriation due to currency controls. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/venezuela-capto-inversiones-por-1591-millones-dolares-2015_316966; El Nacional, http://www.el-nacional.com/economia/Venezuela-capto-inversiones-America-Latina_0_874712814.html)

 

 

Politics and International Affairs

Obama urges Venezuela to respect democratic process, pursue recall, release prisoners

U.S. President Barack Obama on Wednesday urged the Venezuelan government to respect the democratic process and the rule of law, including allowing the release of political prisoners. "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)

 

China invites opposition parliamentary leader Julio Borges to talk

Julio Borges, head of the opposition majority coalition in Venezuela’s National Assembly is in China to talk about the economic crisis and challenges of change in Venezuela. The five-day visit will allow him to brief Chinese experts on the country’s current situation. He is a guest of the Chinese Association for International Understanding (CAFIU), an organization attached to the Chinese ruling party. He arrived in China on Monday, to share his vision over the economic crisis and take part in high-level meetings over, among other things, the future in Venezuela. Members of opposition umbrella group Unified Democratic Panel (MUD) backed the visit and regarded it as an open path and a clear signal of the world’s expectations around the country’s situation. Borges is a leader within the Primero Justicia party, along with former Presidential candidate Henrique Capriles Radonski. (El Universal, http://www.eluniversal.com/noticias/daily-news/julio-borges-global-community-must-know-venezuelas-visions_317078)

 

Pro-government forces threaten to abolish Parliament, Cardinal calls idea “desperate”, and a “coup d’etat”

Didalco Bolivar, a former governor of Aragua state, announced that a coalition of all pro government parties called “Great Patriotic Pole”, is considering a motion requesting that the Supreme Tribunal “abolish this National Assembly….and call for new parliamentary elections”. He claimed the legislature is violating the Constitution, betraying the Fatherland, usurping duties, and abusing its authority in foreign policy. Previously, President Nicolas Maduro had also accused Parliament of usurping duties and treason. Bolivar also said the recall referendum could not be called this year, claiming it has been called ahead of time, and accused the opposition of fraud. Venezuela’s Cardinal Jorge Urosa called the move “desperate”, and said “I think this has no head or tail, it would be a coup d’etat against the will of the people expressed on December 6, when an overwhelming majority of the Venezuelan people voted in the direction the National Assembly is now taking. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/28/chavismo-estudia-como-abolir-el-parlamento-venezolano/; El Universal, http://www.eluniversal.com/noticias/politica/iglesia-catolica-rechaza-idea-abolir-parlamento_317185)

 

….and regime then appears to backtrack

Ombudsman Tarek William Saab, a member of the pro-government PSUV party, then said “isolated voices, such as those calling for the abolition of public powers, will not have any kind of support nationally, because they are individuals----what Venezuela now needs is cooperation between public powers”. He added that “radical and extremist voices will have no success in Venezuela at this time…success will come to consensus proposals that lead to an effective solution”. The leader of the pro-government faction within the National Assembly, Hector Rodríguez, said they are not shirking the possibility of a recall referendum since it is a part of the Constitution and said the opposition has the right to use all means possible. He added that the population is more concerned with scarcity and inflation than it is with the proposed referendum. Speaking later, President Maduro called on his supporters to make it a priority to “defeat” and “denounce” the National Assembly during the second semester this year, and called the legislature “a hindrance to development, and we must all take it on as such”. He made reference to the proposal for abolition. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/29/ombudsman-venezolano-afirma-propuesta-de-abolir-parlamento-no-tendra-apoyo/; http://www.infolatam.com/2016/06/30/maduro-pide-que-derrotar-al-parlamento-sea-la-linea-del-proximo-semestre/; Noticiero Venevision: http://www.noticierovenevision.net/nacionales/2016/junio/28/161036=hector-rodriguez-aclaro-que-no-se-estan-negando-a-la-posibilidad-de-la-realizacion-del-rr-)

 

Ramos Allup slams regime for clinging to High Command, announces review of TSJ justices

National Assembly President Henry Ramos Allup says it is “worrisome” that the Maduro regime should depend on the military High Command and the Supreme Tribunal’s Constitutional Chamber to cling on to power. He rejected military coups and repeated that the democratic system has been altered here. He said the Maduro regime had been “given notice” that he is being fired; and added: “They know they’re in their final days, and they’re going to pay, whether they’re civilians or soldiers,” he said, adding that “when this comes about, which will be soon, they are going to have to answer to the courts for their evil deeds”. He also announced that the legislature will revoke the decision – which he termed unconstitutional – through which current justices of the Supreme Tribunal were appointed. He said that if this happens they will call for a new nomination process. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415166&CategoryId=10717; and more in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/junio/28/161055=ramos-allup-critica-que-el-gobierno-se-aferre-al-alto-mando-militar-para-permanecer-en-el-poder)

 

PSUV says managers who do not fire employees who petitioned for Maduro’s recall must be fired

Lieutenant Diosdado Cabello, vice president of the pro-government PSUV party has announced that his party will demand that all those who hold management positions within government and do not fire employees who have signed a petition for a recall referendum against President Nicolas Maduro, must also be fired. He also said the opposition must be forced to collect 4 million signatures in one day and with 20% of all polling machines. “We are not going to make it easy for them. No. I swear we won’t. And we will do whatever we have to do”. More in Spanish:

 (El Nacional, http://www.el-nacional.com/politica/PSUV-destitucion-despidan-firmaron-revocatorio_0_875312804.html; http://www.el-nacional.com/politica/Solicitaran-CNE-firmas-recoja-maquinas_0_875312787.html)

 

Workers fired, students deprived of scholarships, for signing recall petition

200 employees of the SENIAT tax authority reported to the National Assembly that they were fired for having signed the petition for a recall referendum against President Nicolas Maduro. The pro-government Zulia state has suspended scholarship benefits of 200 students, according to reports confirmed by authorities at four public and private universities there. (El Nacional, http://www.el-nacional.com/politica/Despiden-trabajadores-quitan-estudiantes-firmar_0_875312785.html; El Universal, http://www.eluniversal.com/noticias/venezuela/fundalossada-niega-que-retiro-becas-sea-represalia-por-revocatorio_317162)

 

Maduro’s nationality discussed at the National Assembly

Pro government legislator Victor Clark claims the Colombian government has reported “no information was found relating to a birth certificate or identification card” that could indicate that President Nicolas Maduro is a Colombian national. Clark read out a response by Colombian Foreign Minister María Angela Holguin to a request by National Assembly President Henry Ramos Allup. Ramos Allup retorted that Clark had read an incomplete response since that first notice was followed by another document sent to the Colombian National Registry requesting information on the nationality of Maduro’s parents, which would raise the issue of dual citizenship. (El Universal, http://www.eluniversal.com/noticias/daily-news/colombian-govt-speaks-about-nationality-venezuelas-maduro_317073; http://www.eluniversal.com/noticias/daily-news/colombian-govt-support-requested-clarify-maduros-nationality_317050)

 

Foreign Minister Rodriguez and Ernesto Samper visited Surinam’s Bouterse

UNASUR’s pro tem president, Foreign Minister Delcy Rodríguez, and Ernesto Samper, Secretary General of the Union of South American Nations, have travelled to Surinam to meet with that nation’s President Dési Bouterse, and said they would call a meeting of the organization to discuss the situation there within the next few days. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/junio/28/161040=canciller-rodriguez-y-ernesto-samper-visitaron-surinam-para-reunirse-con-el-primer-mandatario-desi-bouterse)

 

Paraguay regrets MERCOSUR the union’s chair may go to Venezuela

Paraguay’s Foreign Minister Eladio Loizaga has said his nation regrets that the Foreign Ministers of Argentina and Uruguay announced that the pro tem chair of MERCOSUR would go to Venezuela, as scheduled, without consulting Paraguay or Brazil. “I deeply regret this information has been put out unilaterally by two fellow foreign ministers”, he said. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Paraguay-presidencia-Mercosur-Venezuela-consultar_0_875312757.html)

 

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

 

July 25, 2014

International Trade

Incoming cargo at Puerto Cabello:

• 25,000 tons of wheat from Canada for MOLVENCA.
• Over 1,000 tons of gutted and frozen chicken from Bunge Alimentos S.A. and BRF S.A. for CASA
• 563 tons of powdered whole milk in 25 containers from Argentina for CASA
• 474 tons of milk in 17 containers from Paraguay for PARMALAT.
• 207 tons of unsalted butter in 8 vans, from Uruguay for CASA
• 108 tons of frozen beef cuts , from Uruguay for CASA
• 44 tons of whisky from the United Kingdom, for DESTILERÍAS UNIDAS.

19 ships remain at bay in Puerto Cabello. 12 of them are carrying 66,000 tons of yellow and white corn; 60,000 tons of sugar. (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-mil-toneladas-de-pollo-llegaron-al-puerto-local-2202208/2014/07/22/340680 and http://www.notitarde.com/La-Costa/Mas-de-25-mil-toneladas-de-trigo-llegaron-al-puerto-2202729/2014/07/23/341023)

Brazil to ask MERCOSUR to speed up application of a no tariff policy toward Pacific Alliance countries

Brazil will ask MERCOSUR to apply no tariffs to trade with Peru, Chile y Colombia, in December 2014, as opposed to the scheduled 2019 date. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/brasil-pedira-a-mercosur-adelantar-arancel-cero-co.aspx#ixzz38ThUVKE2; El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/brasil-pide-a-mercosur-adelantar-arancel-cero-con-.aspx)

Logistics & Transport

Government meets with seven airlines

General Luis Graterol, Water and Air Transport Minister, along with General Rodolfo Marco Torres, Minister of Finance and Public Banking met again with AIR FRANCE, UNITED AIRLINES, CARIBBEAN AIRLINES, AVIANCA, LACSA-TACA, IBERIA, and VARIG GOL in order to reach agreements on the terms of repatriation of their funds. (El Universal, http://www.eluniversal.com/economia/140723/venezuelan-government-holds-meetings-with-seven-airlines; http://www.eluniversal.com/economia/140723/copa-airlines-expects-venezuelas-debt-settlement)

Oil & Energy

Weatherford is to expand operations in Venezuela

Weatherford International denies reports of the sale of their Venezuelan assets to ROSNEFT, and says it will increase investments in infrastructure, machinery and training, as well as support local communities here. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140725/weatherford-contempla-expandir-su-presencia-en-el-pais)

Commodities

Tata Motors gears up for South American drive with first car plant in Venezuela

Tata Motors is setting up a full-fledged car assembly plant in Venezuela to penetrate the 4.5-million-unit South American market. The plant, to be operated jointly with a partner, would initially assemble the MANZA sedan and INDICA eV2 models from completely knocked down (CKD) kits exported from India, and later be expanded to manufacture other products, sources in the know told FE. While an announcement is likely by September, the assembly plant is expected to have an initial capacity of 20,000 units a year. (The Financial Times, http://www.financialexpress.com/news/tata-motors-gears-up-for-south-american-drive-with-first-car-plant-in-venezuela/1273111)

Economy & Finance

Economic Vice President heads for NYC to contact international banks

Vice-President for Economic Affairs and Minister of Petroleum and Mining, Rafael Ramírez, will soon travel to New York to meet with international banks and investment funds. One and a half months ago, Ramírez visited London and told investors that an exchange convergence would take place in the short term, along with unification of parallel funds. (El Universal, http://www.eluniversal.com/economia/140724/oil-minister-heads-for-nyc-to-contact-international-banks)

FORTUNE: How to fix Venezuela’s troubled exchange rate

Most people think that the Venezuelan economy is a basket case on the verge of collapse, and that has been a widespread belief for most of the last decade. During the past two years, however, a number of problems worsened. Inflation has hit annual rates of more than 60%, and the country has faced an increasing shortage of essential consumer goods like milk and toilet paper. Venezuela currently has four different exchange rates. Most dollars are bought from the government at the official rate of 6.3 VEB per U$D and is intended for essential goods, such as food and medicine. Some other importers can buy dollars from the government at a rate of about 11 VEB per dollar on a limited exchange called SICAD 1. There is also SICAD 2, which was introduced in March and involves private sellers, at a rate of 50 VEB per dollar. Finally, there is the unregulated black market where dollars currently sell for about 79 VEB per dollar. A lot of the current problems do seem to be connected to the exchange rate system. Prior to adoption of the SICAD 2 system, the black market rate for the dollar had risen from 12 VEB in October 2012 to 88 VEB in March. Once the black market differential is big enough it increases the incentive for corruption as you can get access to official dollars at 6.3 VEB and sell them on the black market. If inflation continues at current levels, even the SICAD 2 rate of 50 VEB per dollar would eventually become an overvalued exchange rate in real terms. According to the Bank of America’s March report, Venezuela has about U$D 50 billion in foreign exchange reserves (although most of the central bank’s reserves are in gold, these can be easily sold – currently at a sizeable profit relative to their purchase price.) Imports have been shrinking over most of the past year. All of this should give the government a comfortable margin of foreign exchange with which to manage the transition. (Fortune, http://fortune.com/2014/07/22/how-to-fix-venezuelas-toubled-exchange-rate/)

Analysts warn U$D 15 billion are needed to dismantle Venezuelan FOREX control

The Venezuelan regime plans to announce its plan to unify the three types of current exchange rate into one in August. However, experts insist the process must be accompanied by an elimination of market restrictions and a series of tax and monetary corrections to prevent the mega-devaluation that would ensue pushes the country into a hyper-inflationary spiral. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40325&idc=2)

China increasingly cautious toward Venezuela

The Eurasia Group reports that the Chinese government is increasingly cautious about financing Venezuela. They demand specific projects and seek to keep the same amounts in hard currency deliveries. During Chinese President Xi Jinping's recent to Caracas they only agreed to renew one tranche of the Bi National Fund, for U$D 4 billion. "However, they did not renew the U$D 20 billion Long Term Great Volume Fund which Venezuela was interested in". More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/china-ahora-exige-proyectos-y-es-mas-cautelosa-con.aspx#ixzz38I2y8Anu)

Politics

Retired Venezuelan General Hugo Carvajal detained on U.S. Petition over drug trafficking

A former chief of Venezuela’s military intelligence agency, accused by the U.S. of having ties to drug trafficking and Colombian Marxist rebels has been detained in Aruba and handed over to the DEA on an extradition petition by the U.S government in charges cocaine trafficking. Retired General Hugo Carvajal, a confidant of the late President Chávez, was awaiting confirmation as President Nicolás Maduro’s consul general to Aruba. In 2008, along with the current state governors of Guárico (Captain Ramón Rodríguez Chacín) and Trujillo (General Henry Rangel Silva), he was put on a U.S. Treasury Department blacklist alleging they protected drug shipments for Colombia's terrorist FARC guerrilla, and also provided the rebel group with weapons and logistical help. Venezuela’s foreign ministry claims the arrest by Dutch authorities is a violation of a 1961 international convention governing diplomatic relations and demanded that Carvajal be freed, warning that commercial and energy relations with Aruba could be damaged if he isn’t. President Nicolás Maduro declared "He is kidnapped ... I put my hand in the fire for Major General Carvajal and I will defend him with all the possibilities and strength of the Venezuelan state ... We will not allow Venezuela's honor to be stained.... this ambush strengthens our civilian-military union". Carvajal was arrested upon landing in a private aircraft and at first providing a fake passport. The Dutch government had rejected his appointment as consul due to charges against him. Aruba's Prosecutor says "He had no function here in Aruba, he is not Consul General, and he therefore has no immunity". The U.S. plans to formally request extradition and Carvajal will be taken before a local judge to determine whether his detention complies with international treaties. According to El Nuevo Herald of Miami, he has seven cases pending against him in U.S. courts. In a May 2013 indictment Carvajal is accused of assisting Colombia's North Valley Cartel, including the late Wilber Varela, alias "Jabon", to ship cocaine from Venezuela between 2004 and 2008, while bribing high-ranking military and law enforcement officials. (Reuters, http://www.reuters.com/article/2014/07/24/us-venezuela-arrest-idUSKBN0FT2ET20140724; El Universal, http://www.eluniversal.com/nacional-y-politica/140724/general-hugo-carvajal-detained-in-aruba; http://www.eluniversal.com/nacional-y-politica/140724/venezuelan-govt-terms-unlawful-carvajals-detention-in-aruba; Fox News, http://www.foxnews.com/world/2014/07/24/aruba-prosecutors-say-venezuelan-intelligence-official-detained-on-request-from/; The New York Times: http://www.nytimes.com/reuters/2014/07/24/world/europe/24reuters-venezuela-arrest.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief7.25.14&_r=0; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/140725/gobierno-califico-de-ilegal-arresto-de-carvajal-en-aruba; and AVN; http://www.avn.info.ve/contenido/presidente-maduro-manifest%C3%B3-respaldo-diplom%C3%A1tico-detenido-ilegalmente-aruba; El Nacional; http://www.el-nacional.com/)

Former Venezuelan judge arrested in Miami for drug trafficking

Another former Venezuela official was hauled into federal court in Miami, accused of taking bribes from South American drug cartels in exchange for help moving large shipments of cocaine to the United States. Benny Palmeri-Bacchi, 46, an attorney and former Venezuelan judge, pleaded not guilty to charges of distributing cocaine to the United States, conspiracy to obstruct justice, money laundering, and extortion in a Miami federal court. He was arrested after he flew into Miami on a family vacation to Disney World. He is charged with Rodolfo McTurk, ex-director of Interpol in Venezuela. The pair allegedly helped Jaime Alberto Marin Zamora, a drug kingpin with Colombia's North Valley Cartel, ship "thousands of kilograms of cocaine" from Venezuela to the United States, according to a federal grand jury indictment in the Southern District of Florida unsealed in December 2013. Prosecutors are seeking to seize U$D 2.5 million from Wells Fargo and Espirito Santo Bank accounts owned by the men. (The New York Times, http://www.nytimes.com/reuters/2014/07/24/world/europe/24reuters-venezuela-arrest.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief7.25.14&_r=0)

Opposition leader Leopoldo Lopez on trial

The trial of one of Venezuela's main opposition leaders, Leopoldo Lopez, has begun in Caracas. He is accused of inciting violence during anti-government demonstrations and has been in custody since 18 February, when he handed himself in to the authorities. Lopez has accused the government of President Nicolas Maduro of jailing Venezuelans for seeking democratic change. There was heavy police presence and road blocks near the Justice Palace, but hundreds of supporters, including Lopez's wife, Lilian Tintori, and parents, gathered outside the court to call for his release. Lopez faces a maximum sentence of 10 years in jail if convicted. During the first session of his trial, López professed that they are "rendering the bill" for his political stance. "This trial will measure the quality of democracy," said the ex-mayor of Chacao municipality. (BBC News, http://www.bbc.com/news/world-latin-america-28457043?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%207.24.14; El Universal, http://www.eluniversal.com/nacional-y-politica/140724/lopez-feels-that-democracy-is-prosecuted-in-his-case; Reuters, http://www.reuters.com/article/2014/07/24/us-venezuela-opposition-idUSKBN0FT0AE20140724; Fox News, http://www.foxnews.com/world/2014/07/23/jailed-venezuela-opposition-leader-goes-on-trial-for-inciting-violence-during/)

Denunciations of purported coup plots escalate

Announcements of foiled coups and plots against the government have long been a part of the Chavista discourse. A study by the Caracas-based newspaper Ultimas Noticias counted 63 alleged assassination plots between when Chavez took office in 1999 and his death in 2013. Since then, such claims have come even more frequently. President Nicolas Maduro's government has denounced more than a dozen purported plots since coming to power 15 months ago, according to a tally by The Associated Press. (Fox News, http://www.foxnews.com/world/2014/07/23/escalating-denunciations-purported-coup-plots-instill-fear-in-venezuela/)

Venezuela maintains claim on the Essequibo

Foreign Minister Elías Jaua says Venezuela's claims against Guyana over the Essequibo territory remain legal and current under UN rules. More in Spanish: (AVN; http://www.avn.info.ve/contenido/venezuela-ratifica-que-reclamo-sobre-esequibo-es-legal-y-est%C3%A1-vigente)

German press reports illegal weapons sales to Venezuela

Germany's "Süddeutsche Zeitung" journal reports that Sig Sauer exported weapons to Venezuela through a Rumanian intermediary, despite a ban by Angela Merkel's government. The arsenal was sent to Rumania for final processing to avoid requesting the German government's permission. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140725/prensa-alemana-denuncia-venta-ilegal-de-armas-a-venezuela)

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.