January 22th, 2013

Economics & Finance

Key pro Government legislator forecasts FOREX rate adjustment in Venezuela

Rodrigo Cabezas, former Finance Minister and Speaker of the Latin American Parliament, says some economic adjustments are to be implemented in 2013 in Venezuela, and will be announced gradually by the relevant ministers.

Adjustments may include changes in the price of some goods and services, and the foreign exchange rate, as well as some fiscal reforms and steps to curb speculation. Cabezas says "the main thing we must do is preserve growth" and ensure competitiveness, not simply use devaluation for fiscal purposes which has always been inflationary". (El Universal, 01-21-2013; http://www.eluniversal.com/economia/130121/deputy-forecasts-forex-rate-adjustment-in-venezuela)

Central Bank seeks shelter in US dollar to protect international reserves

Despite past verbal attacks by President Hugo Chávez on the US dollar, the Central Bank of Venezuela (BCV) is relying on US bills for international reserves.  BCV's President Nelson Merentes explains that "for the purpose of minimizing the risks stemming from the widespread global economic crisis, it (the BCV) privileged safety and liquidity in its investment strategy for international reserves, and therefore it cut down non-US dollar exposure, as other foreign currencies were expected to depreciate." (El Universal, 01-19-2013; http://www.eluniversal.com/economia/130119/venezuela-seeks-shelter-in-us-dollar-to-protect-international-reserves)

Domestic debt up 62% in 2012

The Venezuelan government is now issuing debt massively in bolivars in order to meet skyrocketing public spending. As a consequence, devaluation would grant the government more bolivars for dollars and immediately reduce the  burden on public accounts. Research firm SÍNTESIS FINANCIERA has just reported that Venezuela's domestic debt, that is the debt in bolivars, closed 2012 at VEB 249.3 billion (U$D 57.97 billion) in 2012, 62% higher than in 2011, rising from 9% of GDP to 16.3% of GDP. (El Universal, 01-21-2013; http://www.eluniversal.com/economia/130121/venezuelan-domestic-debt-jumps-62-in-2012)

Venezuela's population increased by over 4.1 million between 2001 and 2011 for a total 28.946 million, according to Census data released  by the National Statistics Institute. The report reveals 88.8% live in urban areas and 11.2% in rural areas. More in Spanish: (AVN, 01-22-2013; http://www.avn.info.ve/contenido/poblaci%C3%B3n-venezolana-se-increment%C3%B3-m%C3%A1s-41-millones-personas)

Abandoned U$D 200 million government owned rice processing plant occupied by 1500 unemployed

A rice processing plant bought from China at a cost of U$D 200 million, which was abandoned on Cocuina Island in Delta Amacuro State has been taken over by over 1500 unemployed inhabitants of the region. Occupiers demand the project be reactivated and include them as workers. More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)

Commodities

Ambani said to mull U$D 2 billion Venezuela spend

Reliance Industries Ltd. (RIL) plans to spend more than U$D 2 billion on Venezuelan oil fields, betting President Hugo Chavez’s failing health won’t lead to political upheaval, said a person with direct knowledge of the decision. The operator of the world’s biggest refining complex is jointly assessing investments in four oilfields in with state-run company Petróleos de Venezuela SA, said the person, who asked not to be identified, citing confidentiality terms. Reliance is waiting for data on the blocks from PDVSA to start the due diligence process, the person said. (Bloomberg, 01-21-2013; http://www.bloomberg.com/news/2013-01-20/ambani-said-to-mull-2-billion-venezuela-spend-corporate-india.html)

FAO reports hunger virtually eliminated in Venezuela, a major regional importer of wheat, corn and soy

The FAO Regional Office for Latin America and the Caribbean's recently published "Panorama of Food and Nutrition Security for 2012" shows Venezuela has a very low hunger index within the region and "has managed to eliminate hunger, with an index under 5% as the regional average is 8.3%, due to MERCAL and other government sponsored programs. The report points out Venezuela is one of the 5 major importers of wheat, corn and soy in the region. More in Spanish: (El Nacional, 01-22-2013l; http://www.el-nacional.com/)

International Trade

Food imports from Argentina will increase in order to prevent shortages the government does not admit to. The announcement was made by Vice President Nicolás Maduro and Argentinean Planning Minister Julio De Vido during an event in Caracas. The goal is to guarantee Venezuela “has a three month intact food reserve and no one in the market can leave short of basic products,” explained Maduro. (Veneconomy, 01-20-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33401&idc=3)

Venezuela will spend U$D 16 million in Uruguay milk imports

Uruguayan Foreign Minister Luis Almagro says President José Mujica's recent support to the Chavez regime has opened up Uruguayan powdered milk exports to Venezuela. He announced an agreement to send Venezuela 4500 tons of powdered milk monthly for a total around U$D 16 million. More in Spanish:  (El Universal, 01-22-2013; http://www.eluniversal.com/economia/130122/venezuela-invertira-16-millones-en-comprar-leche-a-uruguay)

Logistics & Transport

Port costs fuel inflation

Cipriana Ramos, FEDECÁMARAS Vargas President and coordinator of the Customs and Port Affairs Committee says imported products have to wait about 45 days to be nationalized at an average daily cost of U$D 15,000 as well as additional payments to the Port Authority which hit both the importer and the final consumer as they become reflected in inflation. More in Spanish: (Tal Cual, 01-21-2013; http://www.talcualdigital.com/index.html)

Imports are projected at 2,500 containers, plans to expedite cargo are announced

SENIAT, Venezuela's tax authority, along with the Port Authority (BOLIPUERTOS) and the CASA food distribution system are estimating 2,500 food containers will arrive over the next few months and hope to dispatch 100 units daily by increasing the number of processing offices for food and bulk imports to 6, working 24x7 at Puerto Cabello port. They also say there will be a permanently open Non-Intrusive Inspection Circuit. More in Spanish: (Notitarde, 01-22-2013; http://www.notitarde.com/La-Costa/Aumentar%C3%A1n-taquillas-para-despacho-de-la-carga-de-alimento-y-al-granel/2013/01/21/161238)

New General Managers appointed at ports nationwide: all of them are military, according to Official Gazette 40.092 dated 17 January 2013. More in Spanish: (Bolipuertos, 01-21-2013; http://www.bolipuertos.gob.ve/noticia.aspx?id=6629)

Politics

Chavez brother says leader expected to return home from Cuba in 'coming days'

One of Hugo Chavez's brothers says the Venezuelan president is expected to return home from Cuba in the coming days as he continues to recover nearly six weeks after undergoing cancer surgery. Argenis Chavez is one of the president's five brothers and the president of the National Electric Corporation. He tells The Associated Press that the president continues to recover. He said after an event Monday at the Supreme Court that the decision about when Chavez returns is up to his medical team but that he is expected to return to Venezuela in the "coming days." (Fox News, 01-21-2013; http://www.foxnews.com/world/2013/01/21/brother-chavez-says-venezuela-leader-expected-to-return-home-from-cuba-in/#ixzz2Ie7knfkD; The Washington Post, http://www.washingtonpost.com/world/the_americas/brother-of-chavez-says-venezuela-leader-expected-to-return-home-from-cuba-in-coming-days/2013/01/21/9facfad8-6406-11e2-889b-f23c246aa446_story.html)

Maduro says Chavez to start new step in recovery

President Hugo Chavez will soon enter a new stage in his recovery from a fourth cancer operation in Cuba, Vice President Nicolas Maduro said, without providing further details. Maduro says he last saw Chavez Jan. 14 during a visit to the Venezuelan president’s bedside in Cuba. “He is stabilizing in all his medical indicators, in the function of his organs, in all his fundamental vital indicators and is fully conscious,” Maduro said today in an interview on the Televen television network. “He is gaining vital strength to begin a second stage of recovery that will be announced through official reports.” (Bloomberg, 01-20-2013; http://www.bloomberg.com/news/2013-01-20/venezuela-s-maduro-says-chavez-to-start-new-step-in-recovery-1-.html; El Universal; http://www.eluniversal.com/nacional-y-politica/130120/vp-maduro-chavez-is-to-start-a-second-phase-of-treatment; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=663599&CategoryId=10717; Fox News, http://www.foxnews.com/world/2013/01/20/venezuela-vp-says-optimistic-hugo-chavez-will-soon-return-to-homeland-following/)

Maduro will travel to Chile, along with Elías Jaua to attend the two summits to be held this week, announced Chilean Foreign Affairs Minister Alfredo Moreno on Monday. The Latin American and Caribbean States Community (CELAC) Summit with the European Union will be held on January 26 and 27 and a CELAC Summit will take place on Monday, January 28. (Veneconomy, 01-21-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33415&idc=1; El Universal; http://www.eluniversal.com/nacional-y-politica/130121/venezuelan-vp-fm-to-attend-celac-european-union-summit-in-chile)

Foreign minister Jaua in Havana, plans foreign policy discussions with ailing Chavez

Venezuela's top diplomat says he plans to visit President Hugo Chavez in Cuba, where the ailing leader remains out of sight more than a month after a fourth cancer- recovering from cancer surgery. Foreign Minister Elias Jaua says he intends to meet with Chavez to discuss Venezuelan foreign policy. (Fox News, 01-23-2013; http://www.foxnews.com/world/2013/01/21/venezuelan-foreign-minister-in-havana-plans-foreign-policy-discussions-with/#ixzz2Ie7TOTBt)

Envoy says Venezuela open to better ties with U.S.

Venezuela's government is open to improving troubled ties with Washington and is considering a U.S. proposal for the return of anti-drug agents kicked out of the country eight years ago by President Hugo Chavez, a senior official said.

There has been no word from Chavez since he had cancer surgery in Cuba five weeks ago, so every move the government makes in his absence is being picked over for clues to what the OPEC nation might look like in a post-Chavez era. Venezuela's ambassador to the Organization of American States (OAS), Roy Chaderton, said U.S.-Venezuela relations were "not hot, not cold. Zero degrees". (Reuters, 01-20-2013; http://www.reuters.com/article/2013/01/20/venezuela-chavez-idUSL1N0AP0FZ20130120)

Colombia's Santos:  "I do not think as Chavez does, but respect differences"

Colombian President Juan Manuel Santos says his government has seriously tried to respect the balance of power, and that "there cannot be good government without total press freedom". He also say he is far from agreeing with President Chavez, but seeks to find common issues to work together despite while respecting differences. More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)

Supreme Court President Luisa Estella Morales pledges support for "Bolivarian socialism"

She made here statements in the opening ceremonies for the 2013 judicial period, and specifically mentioned the five key objectives in the plan presented by President Chavez for 2013-2019, including "the continuing construction of XXIst century Bolivarian socialism". More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)



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.

May 01st, 2012

Economics & Finance

Government priorities trump currency allocation

Even though the Ministry of Petroleum and Mining reports on a weekly basis that the Venezuelan oil basket is sold at prices in excess of USD 100 per barrel, the market is subject to changes in the allocation of currency by the official sector. Last April 20, the president of the Currency Administration Commission (Cadivi), Manuel Barroso, explained certain aspects about the new currency allocation priorities for eight academic areas.

He pointed out that, based on the Millennium Goals and the Socialist Plan for the Nation, the government set academic priorities benefiting from the exchange rate of Bs 4.3 per US dollar. He clarified that this move does not mean that anyone desiring to study other areas may not have access to currency as there are other options, like the Transaction System for Foreign Currency Denominated Securities (Sitme), which involves the purchase of bonds at an exchange rate of Bs 5.3 per US. The medicine sector was also notified of the "temporary" measure for priority allocation of currency for 121 active principles over any other of its kind, according to members of that sector. (El Universal, 04-28-2012; http://www.eluniversal.com/economia/120428/government-priorities-trump-currency-allocation)

Fitch says opaque off-budget spending weighs on Venezuela's creditworthiness

According to a special report published today by Fitch Ratings, the growth in off-budget spending has decreased the transparency of Venezuela's public and external accounts and increased their discretionary character. Information on these funds' balances, quality of investments and cash flows is limited, thus increasing the challenges to assess the sovereign's actual financial strengths and vulnerabilities. In addition, 'the policy choice of transferring an increasing share of the oil windfall to opaque and highly discretionary mechanisms has resulted in a visible deterioration in Venezuela's external and fiscal credit metrics in spite of exceptional oil prices,' said Erich Arispe, Director in Fitch's Latin America Sovereigns Group. (Reuters, 04-30-2012; http://www.reuters.com/article/2012/04/30/idUSWNA614720120430)

PDVSA bond rally sends yield on 2015 note to record low

The yield on Petróleos de Venezuela SA bonds due in 2015 fell to the lowest since being issued in 2009 amid a rally in Venezuelan assets. The yield on the 5% bonds due in 2015 fell 53 basis points, or 0.53 percentage point, to 10.27% at 1:22 p.m. in Caracas, according to data compiled by Bloomberg. The bond’s price rose 1.38 cents to 84.86 cents on the dollar. The bonds are attractive because there’s little risk additional supply will create a glut, Raymond Zucaro, who helps manage about U$D230 million of emerging-market corporate debt at SW Asset Management LLC, said in a phone interview. (Bloomberg, 04-27-2012; http://www.bloomberg.com/news/2012-04-27/pdvsa-2015-bond-rally-sends-yields-to-record-low-caracas-mover.html)

Government authorizes USD 1.63 billion agricultural bond issue

The National Superintendence of Securities authorized an agricultural bond issue by the National Development Fund (Fonden) amounting to VEB 7 billion (USD 1.63 billion, at the official exchange rate of VEB 4.30 per US dollar).

The financial regulation agency said that the debt instruments will be due in 2015, 2016 and 2017, whereas the coupon of the bonds will be about 70% of the interest rate set for agricultural transactions.

The bonds will be purchased by the Venezuelan banks. In turn, the banks will provide funds for the agricultural portfolio. (El Universal, 04-30-2012; http://www.eluniversal.com/economia/120430/government-authorizes-usd-163-billion-agricultural-bond-issue)

Commodities

PDVSA and Chinese SINOHYDRO signed a framework cooperation agreement for the building of an industrial complex at the Carabobo area in the Orinoco Oil Belt, says the oil State company in a press release. The investments estimated for this oil and services complex have been estimated in U$D 4.5 billion. (Veneconomy, 04-30-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=30303&idc=4)

Catalytic cracking unit at Amuay restarted, PDSVA Says

Petróleos de Venezuela, S.A., the state oil company, restarted the catalytic cracking unit at the Amuay refinery in Falcon state following maintenance work that began in February, the company said today in an e-mailed statement.

The company also restarted treatment plants connected to the unit, which processes 108,000 barrels of oil a day and 64,000 barrels a day of gasoline, according to the statement. A catalytic unit at Amuay refinery broke down after attempts to restart an air compressor following programmed maintenance, Caracas-based newspaper El Universal reported April 26, citing union leader Ivan Freites. (Bloomberg, 04-28-2012; http://www.bloomberg.com/news/2012-04-28/catalytic-cracking-unit-at-amuay-restared-pdsva-says.html)

Reduced Venezuelan aluminum production forces authorities to adjust exports

The decline in aluminum production in industries located in the Guayana region has forced authorities to "adjust" aluminum supply quotas sold to multinational companies. Aluminum smelter CVG ALCASA's failure to deliver the product is long-standing and it is due to the industry's operational decline. In the case of smelter VENALUM, exports were reduced because of production has plummeted in recent weeks, and high levels of iron have been found in aluminum cylinders.  (El Universal, 04-30-2012; http://www.eluniversal.com/economia/120430/reduced-venezuelan-aluminum-production-forces-authorities-to-adjust-ex)

New power units operate inefficiently

Igor Gavidia, head of the National Center for Electric Power Delivery (CNDC), National Electricity Corporation (CORPOELEC), has admitted that several "important units" of the National Electricity System (SEN) have been hit by power failures. As a result, there have been several power outages. Meanwhile, energy experts have said that power generation in the northern region of the country does not meet demand, because the megawatts added to the system have not worked as expected. (El Universal, 04-30-2012; http://www.eluniversal.com/economia/120430/new-power-units-operate-inefficiently; http://www.eluniversal.com/economia/120430/venezuelan-govt-confirms-failures-in-major-power-plants)

Sources report fall in fuel supply in Caracas

The supply of gasoline in the Greater Caracas has been affected by failures in the distribution of fuel by the National Transport Company (ENT), industry sources reported. Gasoline deliveries have met not even 60% of total demand in gas stations, which amount to 290 gas pumps in Caracas Metropolitan Area.

Sources said that under normal circumstances, there should be about 120 oil tank trucks loading fuel at the gas stations in Caracas. However, the number of trucks is far lower. (El Universal, 04-30-2012; http://www.eluniversal.com/economia/120430/sources-report-fall-in-fuel-supply-in-caracas)

Logistics & Transport

Slow operations saturate ports

The slow processes, limited availability of machinery to mobilize cargo, limited yard capacity and the number of procedures involved in releasing loads have caused a saturation of containers in the yards of Puerto Cabello. Jorge Aroca, director of the Puerto Cabello Chamber of Commerce, explains there is an adversary criteria by some authorities in verifying cargo. More in Spanish: (Tal Cual, 04-30-2012; http://www.talcualdigital.com/index.html)

Politics

President Chavez enacted new Labor Law

President Hugo Chavez has signed a new Organic Labor Law to govern labor relations in Venezuela. (AVN, 04-30-2012; http://www.avn.info.ve/contenido/president-chavez-enact-new-labor-law-monday; El Universal, 04-30-2012 y 05-01-2012; http://www.eluniversal.com/economia/120501/retroactivity-of-severance-payment-should-be-estimated-since-1997; http://www.eluniversal.com/economia/120430/new-venezuelan-labor-law-reduces-working-hours)

Chávez weighs Venezuela's pullout of the IACHR

Venezuela's President Hugo Chávez disclosed the setup of a State Council to ascertain in the possibility of leaving the Inter-American Commission on Human Rights (IACHR).

"I will request the establishment of a State Council to analyze this subject and I have asked Dr. José Vicente Rangel and Luis Brito García to join it," the Head of State commented in an obligatory simultaneous broadcast from Miraflores presidential palace. (El Universal, 04-30-2012; http://www.eluniversal.com/nacional-y-politica/120430/chavez-weighs-venezuelas-pullout-of-the-iachr)

Chavez back in Cuba for more cancer treatment

President Hugo Chavez is on his sixth trip to Cuba this year to continue his treatment for cancer ahead of elections in October, fueling speculation his health is deteriorating. The National Assembly held an emergency session to vote on whether to grant him leave to absent himself from the country for more than five days. On previous occasions, Congress has voted unanimously in favor; this time the opposition demanded that the Vicepresident be named in the interim, and abstained as the majority voted permission. (Bloomberg, 04-30-2012; http://www.bloomberg.com/news/2012-04-30/chavez-seeks-permission-to-fly-to-cuba-for-more-cancer-treatment.html; AVN, 04-30-2012; http://www.avn.info.ve/contenido/parliament-discuss-chavez039s-permission-travel-cuba; El Universal, 05-01-2012; http://www.eluniversal.com/nacional-y-politica/120501/president-chavez-leaves-for-havana)

Guyana: Venezuela's position on Guyana is "incongruous"

The submission presented by the Guyanese government to extend the Caribbean country's continental shelf by 150 nautical miles was discussed last week by the Guyanese Parliament. Guyanese Foreign Minister Carolyn Rodrigues-Birkett referred to the objections that Venezuela has filed with Ban Ki-moon, the Secretary General of the United Nations, related to Guyana's submission to extend its continental shelf. "In September 2011, and indeed more recently, the government of the Bolivarian Republic of Venezuela, declared its incongruous position on the action taken by Guyana," the top diplomat said. (El Universal, 04-30-2012; http://www.eluniversal.com/nacional-y-politica/120430/guyana-venezuelas-position-on-guyana-is-incongruous)

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.

August 16th, 2011

Economics & Finance

Analysts: Pending price-control law could backfire, boosting inflation in Venezuela

Pending legislation aimed at curbing Venezuela’s soaring inflation could backfire by boosting consumer prices, spurring corruption, stemming investment and causing more severe shortages of basic goods, analysts warned on Saturday. Government officials and lawmakers loyal to President Hugo Chavez claim the Law for Fair Costs and Prices would help reduce Latin America’s highest rate of inflation by forcing businesses to set retail prices at rates established by government officials. Among the factors that officials would consider are production costs such as raw materials and labor. (The Washington Post, 08-13-2011; http://www.washingtonpost.com/politics/analysts-pending-price-control-law-could-backfire-boosting-inflation-in-venezuela/2011/08/13/gIQA3BCaDJ_story.html)

Chávez promotes the SUCRE as a tool to shield the region from financial crisis

Though a phone call to a partisan event by his supporters, President Chávez said that the Unified Regional Compensation System (SUCRE) has potential as a tool to shield the region from the financial crisis caused by global economic meltdown in the U.S. and Europe. He added that launching a single currency would allow them to ignore the dictates of US currency. More in Spanish: (AVN, 08-15-2011; http://www.avn.info.ve/node/72483)

PDVSA relies on nine special funds for parallel expenditures

Live the Venezuelan Government, the state-run oil holding Petróleos de Venezuela (PDVSA) also runs on a parallel budget through nine funds that support social welfare programs known as missions, as well as projects in agriculture, housing, infrastructure, industry and electric power. According to data supplied by the oil company, these special funds contributed over U$D 10 billion to social plans and production projects. (El Universal, 08-13-2011; http://www.eluniversal.com/2011/08/13/pdvsa-structures-parallel-expenditure-through-nine-special-funds.shtml)

National Assembly has authorized added expenditures jointly funded by China

The National Assembly has authorized an additional credit for projects jointly financed with China, which also draw upon the existing Long Range High Volume U$D 20 billion fund. It approved a special U$D 2 billion operation to be used for acquiring products for the “My Well Equipped Home” program, installing a household appliance factory, purchasing transport aircraft, expanding the port at Puerto Cabello and seven agricultural plans. More in Spanish: (El Universal; 08-16-2011; http://www.eluniversal.com/2011/08/16/autorizan-credito-a-planes-del-convenio-con-china.shtml)

Polling firm DATANÁLISIS says 62.7% perceive food supply negatively

According to a perception study conducted by DATANÁLISIS, 62.7% of Venezuelans have a negative view about the availability of foodstuffs in their usual shopping areas. 37% have a positive view 0.3% did not know or had no answer. During June, the reports shows consumers consider it more difficult to find products vegetable oils, corn and soy, milk powder, and wheat flour. More in Spanish: (El Universal, 08-15-2011; http://www.eluniversal.com/2011/08/15/627-de-la-poblacion-cree-que-el-nivel-de-abastecimiento-es-negativo.shtml)

CADIVI cut foreign exchange allocations to commerce in half

According to CADIVI, the agency responsible for distributing dollars at the official exchange rate of 4.30 bolivars allocations to the commercial sector have dropped off  50% as compared to the first semester 2010, falling from U$D 1,51 billion to 772 million. Foreign currency authorizations to import machinery and equipment fell by 44%. More in Spanish: (El Universal, 08-15-2011; http://www.eluniversal.com/2011/08/15/cadivi-recorta-a-la-mitad-la-asignacion-de-divisas-al-comercio.shtml)

Commodities

Venezuela Oil Falls to U$D 103.45

Venezuela's Ministry of Energy and Petroleum reports that the average price of Venezuelan crude sold by Petróleos de Venezuela S.A. (PDVSA) during the week ending August 5 fell to U$D 103.45 from the previous week's U$D 107.84, but still raising the average for the year to U$D 99.43. (Latin American Herald Tribune, 08-15-2011; http://www.laht.com/article.asp?ArticleId=413558&CategoryId=10717)

Venezuelan oil production and exports decreased in June to 2.77 million bpd from 2.79 million bpd a month earlier, according to the Ministry of Energy. This is the second lowest monthly average so far this year. Of the total amount, Venezuela exported 2.41 million bpd, down from 2.48 million bpd in May due to fewer sales of byproducts. (Veneconomy, 08-11-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=27161&idc=4)

PETROPIAR increases daily oil output to 160,000 Barrels

Petróleos de Venezuela SA, the state oil company, says it has increased daily production of heavy crude oil at its Petropiar unit to 160,000 barrels. PETROPIAR, a joint venture with CHEVRON Corp., had daily production of 155,000 barrels during the second quarter and the unit expects to end the year producing 169,000 barrels a day. PDVSA, as the company is known, said it plans to increase daily output to 175,000 barrels in 2012. (Bloomberg, 08-14-2011; http://www.bloomberg.com/news/2011-08-14/pdvsa-s-petropiar-boosts-daily-heavy-crude-oil-output-to-160-000-barrels.html)

PDVSA shows mixed environmental record

Venezuela's state oil company PDVSA is reporting over 2,000 oil leaks in its 2010 management report, down from more than 8,100 the prior year. At the same time, Petróleos de Venezuela recorded 2,393 leaks of hydrocarbons and chemical products during 2010. From January to October 2009, the company recorded 8,124 such incidents. The company called the spills "undesirable events with an environmental impact" in its management report. The volume leaked was down from 182,000 barrels in 2009 to 121,000 barrels in 2010, a decline of more than 30%. (UPI, 08-12-2011; http://www.upi.com/Business_News/Energy-Resources/2011/08/12/PDVSA-shows-mixed-environmental-record/UPI-39691313142298/)

Blackout in northwestern Venezuela due to failure in power plant

After disruptions in the Isiro-Planta Centro power lines, a major blackout took place in the state of Falcón (northwestern Venezuela) after a power generation failure. The outage also hit the Paraguaná peninsula, despite the fact that this region is supplied by the Josefa Camejo power plant. The blackout, due to a failure in Planta Centro power plant, hit the 25 municipalities of the Venezuelan state. (El Universal, 08-15-2011; http://www.eluniversal.com/2011/08/15/blackout-in-northwestern-venezuela-due-to-failure-in-power-plant.shtml)

Logistics & Transport

Shipping freight costs to local ports

The shipping lines increased the cost of sea freight to Venezuela by 5%, according to a source close to the port activity, which reports carriers made the adjustment as a result of increased taxes and port charges that Bolivariana de Puertos (BOLIPUERTOS) began implementing in June. "It was to be expected with increased rates Bolipuertos," said the source consulted, adding that even before the adjustment freight shipping costs were more expensive than in other countries in the region. "Before the implementation of new port tariffs we had the most expensive costs in the region." More in Spanish: (El Universal, 08-15-2011; http://www.eluniversal.com/2011/08/15/navieras-elevaron-costos-de-fletes-hacia-puertos-locales.shtml)

Politics

Chavez returns from chemo recharged but cautious, seeks reelection with more votes than in 2004

President Hugo Chavez returned to Venezuela in the early hours of Sunday after undergoing a second round of chemotherapy in Cuba, sounding recharged and combative in a telephone conversation with state television. Chavez said he felt fewer side effects this time from the treatment and that his doctors will decide soon whether he needs a third session and also possibly radiation therapy. Seeking reelection, on Twitter he says; “Hey comrades, if we beat the opposition by 60% 7 years ago, in 2012 we must surpass this” (Reuters, 08-14-2011; http://www.reuters.com/article/2011/08/14/venezuela-chavez-idUSN1E77D05G20110814; More in Spanish: El Universal; 08-16-2011; http://www.eluniversal.com/2011/08/16/chavez-aspira-a-ser-reelecto-con-el-doble-de-votos-de-2004.shtml)

Reuters: Chavez seeks to contain voter angst over economy

Venezuela's economy is plagued by shortages, high inflation and crippling currency controls, but a massive spending spree by President Hugo Chavez will likely keep an incipient recovery alive, at least until a 2012 vote. Polls show support for the charismatic leftist leader has edged up since he announced in June he had cancer. But unless he can generate as much sympathy for his economic stewardship, his re-election bid could be at risk. In the short term, Chavez can paper over underlying problems with subsidies, price controls and ramped-up spending on his flagship health and housing programs for the poor. (Reuters, 08-15-2011; http://uk.reuters.com/article/2011/08/15/uk-venezuela-economy-idUKTRE77E3BU20110815)

National Assembly will investigate opposition funding

The National Assembly will investigate alleged foreign financing of the opposition Democratic Unity Board (MUD). The move was proposed by the head of the pro-Government United Socialist Party, Cilia Flores; and supported by opposition Assembly members. The Executive Secretary of MUD, Ramón Guillermo Aveledo, says they can investigate the organization “as many times as they want” and that all their actions are public. He added: “They will not distract MUD from its true objective which is to continue building a solid unity and a proposal for all Venezuelans in 2012”. Chavez, upon returning from Cuba, requested the investigation “politically and legally”, and accused the opposition of “creating an atmosphere aimed at questioning” their possible defeat in 2012. More in Spanish: (El Universal; 08-16-2011; http://www.eluniversal.com/2011/08/16/an-aprobo-por-unanimidad-investigar-a-la-mesa-unitaria.shtml  and  El Universal, 08-16-2011; http://www.eluniversal.com/2011/08/16/mesa-investigacion-no-desviara-la-unidad-ni-propuesta-para-2012.shtml)

Over 500,000 people migrated from Venezuela in 2010

A total of 521,000 Venezuelans sold their belongings, rented their houses, left the country with their scarce properties or migrated without any money in 2010. At the same time, over one million people migrated to the South American country, according to a report called "Migration and Remittances Factbook 2011" by the World Bank. The number of people emigrating accounts for 1.8% in a nation of h 29,322,327 inhabitants, according to demographic by the National Statistics Institute (INE). (El Universal, 08-15-2011; http://www.eluniversal.com/2011/08/15/more-than-500000-people-emigrated-from-venezuela-in-2010.shtml)

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.