November 12th, 2010

Economics, Trade & Business

Venezuela bought more from the U.S. in the third quarter

Venezuela's imports from the United States increased 28% in the third quarter of this year, registering a total of $ 2,668 million, compared with the same period in 2009, when it reached $ 2,081 million. In the case of exports, the figures showed a rise of 3.85% with a total of $ 8,555 million, compared with $ 8,237 million in 2009, according to the Department of Commerce of the United States. With these figures, the trade relationship between the two countries during that period grew 8.7% to reach an amount of $ 11,223 million in 2010, compared with $ 10,318 million last year. (El Mundo, 11-11-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=19&Id_Noticia=36722)

Increase in food prices up by 33.7 percent in one year

The acceleration in food price inflation puts pressure on Venezuela's Consumer Price Index (CPI), which increased by 1.5 percent at the end of October compared with 1,1 percent increase in September, according to data provided by the Central Bank of Venezuela (BCV). After a slight change (0.2 percent) in September, the price of foodstuffs gained strength and rose by 1.6 percent in October. The government did not decree any adjustment in the price of regulated items. As a result, food products recorded an annual variation of 33.7 percent, whereas the cumulative variation reached 29.5 percent. This is the group of goods that mostly impacts general prices. (El Universal, 11-10-2010; http://english.eluniversal.com/2010/11/10/en_eco_esp_food-price-inflation_10A4712853.shtml)

Venezuelan food producer Polar to invest in yoghurt market

Venezuela's food giant Alimentos Polar will team up with Spanish dairy group Leche Pascual to invest in the yoghurt market through the joint venture Pascual Andina C.A. Pablo Baraybar, business director of Alimentos Polar, said they plan to invest VEB 450 million (USD 105 million) in a new yoghurt plant expected to be completed in the first quarter of 2012. (El Universal, 11-10-2010; http://english.eluniversal.com/2010/11/10/en_eco_esp_venezuelan-food-prod_10A4713575.shtml)

PDVSA authorized to trade bonds in state-run market

Venezuela’s Finance Ministry will allow Petróleos de Venezuela, S.A. bonds to be traded in the state- run Public Bond Market in an effort to expand access to local debt securities. PDVSA was given authorization by the Securities Superintendent to have $3 billion of bonds maturing in 2017 and sold on Oct. 25 traded on the exchange, according to a resolution published today in the Official Gazette and dated Oct. 8. It’s the first company that’s received permission to operate in the market. (Bloomberg, 11-10-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aAjbCbkut7YI)

Conindustria concerned about the reduction in firms in Venezuela

The president of Conindustria, Carlos Larrazabal said Thursday figures show there has been a marked reduction of companies in the country. Speaking to Union Radio, he said that "INE 1999 figures show that more than 11.200 industries were based in Venezuela and today the figure is less than seven thousand companies." "58% of small businesses today are not even able to invest in operational maintenance and only 20 percent of large firms are investing to increase" he said. (El Mundo, 11-11-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10519)

Sidor two-day strike affects steel production

Siderurgica del Orinoco’s two-day strike at Venezuela’s biggest steel mill is affecting the supply of steel this week to the national market. Union workers blocked the entrance to Sidor, as it is known, on Nov. 8 and 9, Oliveira said. The workers were protesting the non-payment of bonuses and demanding their contracts be renegotiated. Oliveira said Sidor is operating at 75 percent of its capacity following an electricity crisis earlier this year in which factories were forced to cut production to save energy. (Bloomberg, 11-10-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aEg_70unxnAM)

Central Bank of Venezuela introduced the "Gold Book"

The Central Bank of Venezuela will close the exhibition "Golden Millennium" with the baptism of the Golden Book "an encyclopedic text written by researchers and specialists from various disciplines which puts the reader in the context of the gold mining activity in the country and the world. This volume edited by BCV, aims to raise awareness on the sustainable exploitation and rational commercialization of this natural resource with immense potential for the harmonious development of the Venezuelan economy," the BCV said. (El Mundo, 11-11-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10508)

CAF approves resources of over USD 1500 million to Venezuela in 2010

By early 2010, the Corporación Andina de Fomento (CAF) announced its intention to grant loans to Venezuela by a higher order than U.S. $ 1 billion in order to promote projects in electricity, mass transportation and social infrastructure mainly. To comply with that plan, in May, the multilateral organization gave the nation $ 500 million for the Program for Strengthening National Electric System was growing Venezuelan authorities and whose goal is to add 16,195 megawatts of generation for 2015. (Conapri, 11-08-2010; http://www.conapri.org/ArticleDetailIV.asp?CategoryId=14561&ArticleId=376941)

Politics

Castro and Chávez strengthen ties in four-hour meeting

Former Cuban President Fidel Castro congratulated Hugo Chávez for “the warm and emotional speech” delivered by the Venezuelan President during the tenth anniversary of the signing of the Comprehensive Cuba-Venezuela Cooperation Agreement. (El Universal, 11-10-2010; http://english.eluniversal.com/2010/11/10/en_pol_esp_castro-and-chavez-st_10A4713291.shtml)

Region ignoring Venezuela coup threats

What a sham! While the Venezuelan military announces it will not accept an opposition victory in the 2012 elections, thousands of people are dying in Mexico's drug wars and Haiti is suffering from a deadly cholera epidemic, the Organization of American States -- supposedly in charge of addressing the region's biggest problems -- is nowhere to be seen. (Miami Herald, 11-11-2010; www.miamiherald.com/2010/11/11/1919823/region-ignoring-venezuela-coup.html)

The loser advances

The National Assembly has been revving up its engines in order to consolidate the Castro-communist project. Its haste is due to the fact that its absolute power expires in January 2011 thanks to the will of the people who voted against revolutionary hegemony on September 26. With this last-ditch effort, the redder-than-red parliamentarians will complete the Chavista project’s legal network with five laws relating to the People’s Power or Branch. Naturally, they will not approve them before mounting a show of taking them out on the street to “consult” with “their people.” (Veneconomy, 11-11-2010; http://www.veneconomy.com/site/index.asp?idim=2)

Pollster: Venezuelan government weighs adoption of Marxist model

In the post-election political scenario, the new balance of power has led President Hugo Chávez to set a strategy based on the display of force to strengthen the public's perception of Chávez's invincibility. This was the view expressed by Luis Vicente León, director of polling firm Datanálisis, during the forum entitled 2011 Outlook, hosted by consulting firms Ecoanalítica and Metroeconómica. "The president's role is to make clear who is in charge, regardless of key players such as Major General Rangel Silva," León said. (El Universal, 11-10-2010; http://english.eluniversal.com/2010/11/10/en_eco_art_pollster:-venezuelan_10A4713013.shtml)

Transport & Logistics

Ensure that the office of Puerto Cabello is inefficient

In the private sector say that continuing delays in the nationalization of goods at the port of Puerto Cabello. Elsa Gutierrez, president of the Bolivarian State Ports (Bolipuertos) said on Tuesday they had managed to improve the management of the office of the country's main port. This version contrasts with the importing and exporting companies operating in Puerto Cabello. "They lowered their times but not for improved operations, but it has lessened the burden," said a source close to a customs agent. (El Universal, 11-12-2010; http://www.eluniversal.com/2010/11/12/eco_art_aseguran-que-la-adua_2102892.shtml)

Petroleum & Energy

A Nuclear-Electric program law was approved by the National Assembly yesterday. The agreement signed by Venezuela and Russia includes the construction of a nuclear reactor for the peaceful use of nuclear energy. Venezuela signed the Nuclear Non-Proliferation Treaty on June 23, 1978 and signed a cooperation agreement with Russia in November 2008 to develop nuclear projects for peaceful purposes. (Veneconomy, 11-10-2010; http://www.veneconomy.com/site/index.asp?idt=23851&idc=1&ids=44&Var_Send=1&mmD=11&ddD=10&mmH=11&aaD=2010&ddH=11&aaH=2010&Send=Find)

Venezuelan oil exports fell 4.3% in October

Venezuela's oil exports fell 4.3% in October, before the decline in sales of crude oil and affected by faults in the circuit refiner, said the Ministry Energy. External sales averaged 2.3 million barrels per day (bpd), down from 2.4 million bpd in the same month last year, affected mainly by falling 27% to 324,867 bpd in the offices of products. External sales of conventional oil also showed a decline of 6.9% to 1.5 million bpd, while the improved oil Orinoco belt maintained its trend of rising year by averaging 366,474 bpd, an increase of 38%. (El Mundo, 11-11-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10516)

Drilling unit Petrosaudi Saturn arrived in Venezuelan waters

Past Monday, the drilling unit Petrosaudi Saturn arrived in Venezuelan waters. Said vessel was recently upgraded and overhauled for offshore drilling and can reach up to 7,000 meters deep. A press release from the Energy and Oil Ministry explains that said vessel will replace the semi-submersible platform Aban Pearl, which strengthens the gas revolution boosted by the Venezuelan state-run oil company PDVSA and it is aimed to satisfy domestic gas needs. (AVN, 11-11-2010; http://www.avn.info.ve/node/27740)

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

November 8th, 2010

Economics, Trade & Business

Venezuela Raises Price Caps on Corn Flour and Rice

Venezuela’s government is raising the price of corn flour and rice by as much as 24 percent for the first time since March in a bid to avoid food shortages. The government, which regulates prices of basic food goods, raised the cap on corn flour, which is used to make the breakfast staple arepa, by 24 percent to 3.37 bolivars ($0.78) per kilo from 2.72, according to a resolution published today in the Official Gazette. It also raised the cap on rice by 22 percent to 4.46 bolivars per kilo from 3.66. (Bloomberg, 11-08-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ax.eJPgsVULQ)

BCV proposes to reduce inflation thorough planning

Nelson Merentes, the president of the Central Bank of Venezuela, said that reducing the inflation rate is the government’s most important challenge; to that end, there is the need for several changes in terms of production and imports. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/08/en_eco_esp_bcv-proposes-thoroug_08A4706255.shtml)

Venezuela growth hit by state seizures

Venezuela, the only Latin American nation still in recession in the last quarter of 2010, risks fresh blows to its growth prospects in 2011 after a spate of new nationalizations hitting key resource industries. Privately run steel manufacturing plant Sidetur was taken under state control after officials accused its operators of keeping productivity low and not doing enough to meet domestic demand. Earlier in October two glass factories went under state ownership in a measure seen largely as the result of President Hugo Chavez objecting to the companies' U.S. ownership. (UPI, 11-08-2010; http://www.upi.com/Science_News/Resource-Wars/2010/11/08/Venezuela-growth-hit-by-state-seizures/UPI-45111289217060/)

IOE: Venezuelan government is "destroying" the private sector

Venezuelan government actions against the private sector feed what has been described by the International Organization of Employers (IOE) as the "Venezuelan case." In the opinion of Antonio Peñalosa, Secretary General of the organization based in Geneva, the "blindness" of Venezuelan authorities is creating a scenario that will be difficult to overcome. The international business leader considers that the economic policy implemented by President Hugo Chávez is aimed at destroying the private enterprise. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/08/en_eco_esp_ioe:-venezuelan-gove_08A4705053.shtml)

Politics

New agreements with Syria under discussion

In Damascus, Venezuelan Foreign Affairs Minister Nicolás Maduro and Syrian Prime Minister Mohamed Nayi Otri studied new ways to boost bilateral cooperation in economics, trade, oil and energy, amongst others areas. They are studying strategic alliances, a joint development and industrial projects, especially in crude refining and in the production and manufacturing of olive oil and cotton. (Veneconomy, 11-08-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23805&idc=1)

"Chávez needs silence of the media," IAPA cautions

The government of President Hugo Chávez seeks to control the ideas of the media and impose silence, warned a report presented to the Inter-American Press Association (IAPA). The report on freedom of expression in Venezuela, which was presented in the context of the 66th General Assembly of the Inter-American Press Association (IAPA), considered that the Venezuelan government has decided to use the seizure of companies as a means of social control and therefore it needs the silence of the media. (El Universal, http://english.eluniversal.com/2010/11/08/en_pol_esp_chavez-needs-silenc_08A4704811.shtml)

Julio Borges: If the President does not believe in personal initiative, it does not believe in the Venezuelan

The National Coordinator of the Primero Justicia Party and National Assembly member Julio Borges said that "we have been insisting that most of the country disagrees with the government's radical way; recent opinion polls show that 70% of the population disapproves. But we want to talk to the 30% who think that the radical route is correct." "The President and the government do not believe in private enterprise, they do not believe in Venezuela, the simply do not trust the people that have the potential to create jobs, to grow and thrive." (Ultimas Noticias, 11-08-2010; http://www.ultimasnoticias.com.ve/capriles/cadena-global/detalle.aspx?idart=3450756&idcat=56657&tipo=2)

Venezuela, Colombia to install commission this Monday to boost bilateral trade

Venezuela and Colombia will install this Monday in Caracas a bilateral commission to study the integral cooperation agreements endorsed by the two countries, as established by the presidents Juan Manuel Santos (Colombia) and Hugo Chavez (Venezuela) during a meeting held past Tuesday. The commission will be installed in the headquarters of the Science, Technology and Intermediate Industries Ministry, and the Minister and Vice President for Productive Economy Ricardo Menendez will chair the encounter, Telesur informed. (AVN, 11-08-2010; http://www.avn.info.ve/node/27192)

Acid from Cuba

Those who thought that the unexpected suspension of last Sunday’s Aló Presidente would bring a brief respite from the anxiety generated by Chávez’s habitual Sunday announcements were mistaken. Instead, the state-owned Venezolana de Televisión broadcast an interview with Hugo Chávez from Cuba in which he dropped three bombshells whose repercussions are impossible to predict. (Veneconomy, 11-08-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23805&idc=1)

Petroleum & Energy

Revenues of Pdvsa foreign subsidiaries down 7 percent

State-run oil holding Petróleos de Venezuela (Pdvsa) recorded falling income for sales of oil and gas products, and byproducts, manufactured by its foreign subsidiaries. According to a report released by Pdvsa, in the six months ending June 30, 2010, the volume of sales of crude oil and refined products of oil and liquefied petroleum gas by Pdvsa subsidiaries abroad totaled 3.1 million bpd, 7.2 percent less than 3.34 million bpd on average in the first half of 2009. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/05/en_ing_esp_revenues-of-pdvsa-fo_05A4697171.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.



November 5th, 2010

Economics, Trade & Business

Venezuela Finance Minister: 2011 budget is prudent

Jorge Giordani, the Venezuelan Minister of Planning and Finance, said that the government's budgetary policy is prudent. For the purposes of  the 2011 government budget, the government estimated the price of the Venezuelan crude oil (which trades at a significant discount to Brent or WTI) to hover around USD 40 per barrel. Giordani's remarks were made at the Venezuelan legislature, where he commented on the draft 2011 Budget Law. He said that the budget cannot be prepared based on price variability; hence, revenues must be generated by the economy. (El Universal, 11-03-2010; http://english.eluniversal.com/2010/11/03/en_eco_esp_venezuela-finance-mi_03A4689451.shtml)

Cutting inflation rate index to one digit in three years is viable, said Venezuelan Central Bank (BCV) president Nelson Merentes. He also said he believes the Venezuelan economy will grow 2% by 2011. (Veneconomy, 11-04-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23771&idc=2)

Venezuela, Colombia Sign Accords, Vow to Revive Lost Trade

Venezuelan President Hugo Chávez and Colombian President Juan Manuel Santos signed agreements in Caracas on energy projects and vowed to revive bilateral trade hurt in part by a border dispute. Santos said the two leaders will meet every three months to improve ties and discuss joint projects. Petróleos de Venezuela, S.A. will restart gasoline shipments to Colombian border areas and work with Colombia’s Ecopetrol, S.A. to pump oil from mature wells, according to the accords. The companies may also create a venture to produce heavy crude oil from the Orinoco Belt. The two leaders agreed to study a plan to extend a gas pipeline into Central America and another to build an oil pipeline from Venezuela to Colombia’s Pacific coast. (Bloomberg, 11-03-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a3br6p.8V_nE)

No more Pdvsa bonds this year

State-run oil holding Pdvsa will not issue more bonds this year. Issuances of Pdvsa bonds are aimed at offsetting feeble cash flows, paying for nationalized companies and for funding CAPEX. In the meantime, the government has been applying  lot of pressure on the company to keep the social spending for its socialist project high. Ending October, Pdvsa issued USD 3 billion in amortizable bonds at 2017. Demand was more than twofold the supply. (El Universal, 11-03-2010; http://english.eluniversal.com/2010/11/03/en_eco_esp_no-more-pdvsa-bonds_03A4689893.shtml)

Industrialists say the economy will have negative growth of -1.8% in

Industrial sector entrepreneurs say that in 2011 the economy will shrink by 1.8%, according to results from a survey Conindustria at the "Outlook 2011" to over 300 participants. "It reveals the pessimism with which they are watching the situation in the country," press release. Inflation will be 31.5% in 2010 and 32.5% for 2011. (El Mundo, 11-04-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=17&Id_Noticia=35874)

Venezuela is one of the countries with the worst business climate, according to the eight edition of the World Bank’s report along with the International Finance Corporation (IFC): “Doing business 2011: Making a Difference for Entrepreneurs“. The report classifies 183 global economies. Venezuela ranked 172th, down two positions from 2010. Colombia, Mexico and Peru are ranked among the best in the region. (Veneconomy, 11-04-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23779&idc=3)

Fitch places Sidetur's ratings on Rating Watch Negative

Global rating agency Fitch Ratings has placed the ratings of the Venezuelan steel maker Siderúrgica del Turbio (Sidetur) on Rating Watch Negative, following the announcement made by the Venezuelan government last week to nationalize the steel producer. The decision reflects "the uncertainty regarding the exact time by which the nationalization will be completed and its impact on the company's operations during this process," Fitch said in a statement. (El Universal, 11-03-2010; http://english.eluniversal.com/2010/11/03/en_eco_esp_fitch-places-sidetur_03A4689577.shtml)

Politics

Venezuelan Foreign Affairs Minister Nicolás Maduro began a tour that will take him to Turkey, Ukraine and Syria to go over the agreements signed by President Chávez during his recent trip. (Veneconomy, 11-04-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23777&idc=1)

Venezuela, Turkey Foreign Ministers meet to agree political consultation mechanisms

The Venezuelan Minister of Foreign Affairs, Nicolas Maduro, is holding a meeting on Thursday with his Turkish counterpart, Ahmet Davutoglu, with the aim of reinforcing the mechanisms of political consultation between the two nations. According to a press release from the Venezuelan Foreign Ministry, the Turkish diplomat emphasized the need of strengthening bilateral relations sixty years after Turkey and Venezuela built relationships for the first time. (AVN, 11-04-2010; http://www.avn.info.ve/node/26687)

Chavez allies back Basque separatist in Venezuela

A Basque separatist fighting extradition to Spain testified before Venezuelan prosecutors on Wednesday, a Venezuelan activist said. Spanish authorities want to try Arturo Cubillas, who holds a government job in Venezuela, on accusations he helped the Basque militant group ETA arrange explosives training with Colombian rebels in Venezuela. Cubillas insists he is innocent. Susana Gonzalez, who leads a Venezuelan group that supports Basque independence, said she spoke with Cubillas and he testified for two hours. Prosecutors did not immediately comment on the hearing, and Cubillas did not appear in public. (Miami Herald, 11-03-2010; http://www.miamiherald.com/2010/11/03/1907315/chavez-allies-back-basque-separatist.html)

Petroleum & Energy

Storm stops Venezuela oil upgrader again

Venezuela's troubled 130,000 barrels-per-day (bpd) Petroanzoategui heavy crude upgrader has stopped again after a storm caused a fault in its compressor unit, a source at state oil company PDVSA said on Wednesday. The large facility had been out of action since late September due to boiler problems, but this week PDVSA said it had been restarted and was operating normally. (Reuters, 11-03-2010; http://www.reuters.com/article/idUSN0310819020101103)

Venezuela to supply fuel to Turkey

Venezuela says it has agreed to sell fuel to Turkey and that the two countries have pledged to invest jointly in oil projects. The agreements are part of an energy accord signed by Foreign Minister Nicolas Maduro during a visit to Ankara. The foreign ministry said in a statement Thursday that Turkey will receive fuel and that the countries will cooperate in oil projects, including planned Turkish investment in Venezuela's crude-rich Orinoco River basin. (Boston.com, 11-04-2010; http://www.boston.com/news/world/europe/articles/2010/11/04/venezuela_to_supply_fuel_to_turkey/)

Pdvsa ships 240,000 barrels of jet fuel to China

State-run oil company Petróleos de Venezuela (Pdvsa) said it shipped of 240,000 barrels of aviation turbine fuel (Jet A-1) to different Chinese regions, as part of the energy and financial agreements signed with the Asian country. The first shipment (257,000 barrels) was delivered in early October. So far, Venezuela has exported 497,000 barrels to China. The fuel departed from Venezuela's El Palito refinery. (El Universal, 11-02-2010; http://english.eluniversal.com/2010/11/02/en_eco_art_pdvsa-ships-240,000_02A4684211.shtml)

Venezuela sees oil arbitration rulings 2011-12

Venezuela expects rulings in compensation claims against it by Exxon Mobil Corp and ConocoPhillips to be decided next year or in 2012, the South American OPEC member's energy minister said on Tuesday. The U.S. majors want payment for assets nationalized by Venezuela three years ago when it pushed foreign firms into minority partnerships with the state at multibillion dollar projects in the Orinoco Belt crude region. Both Exxon and ConocoPhillips rejected the terms and began international legal proceedings against Venezuela via the World Bank's arbitration panel. "We expect (a decision) in 2011 or 2012," Rafael Ramirez told reporters when asked about the cases. (Reuters, 11-02-2010; http://www.reuters.com/article/idUSN0225824020101103)

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

November 1st, 2010

Economics, Trade & Business

Chavez nationalizes Venezuelan steel company

Venezuela's President Hugo Chavez ordered the nationalization of local steel company Sidetur on Sunday in the latest of several recent government takeovers in South America's top oil producer. Sidetur, a subsidiary of local steel company Sivensa SVS.CR, produces mainly rebar, bar, beam, angle and flat products. According to its website (www.sidetur.com.ve), it has six plants in Venezuela, an annual production capacity of more than 835,000 tonnes and exports products to 25 countries. Chavez said Sidetur was producing 40 percent of the steel rods used in construction in Venezuela. "You will see at what price we buy them, since they belong to the people, and at what price we sell the rods," he said. (Reuters, 10-31-2010; http://www.reuters.com/article/idUSN3110242520101101)

Venezuela steel company protests at state takeover

Venezuelan steel products company Sidetur on Monday protested being nationalized by President Hugo Chavez and denied it had ever broken the South American country's price controls. In the latest of several government takeovers in recent weeks, Chavez said the company was charging too much and ordered its expropriation during his regular television broadcast on Sunday. Six local construction firms also were nationalized. "We are concerned there is a plan to mislead public opinion and justify the expropriation with the argument that Sidetur sells rebar at high prices," the company said in a statement. (Reuters, 11-01-2010; http://www.reuters.com/article/idUSN0114284320101101)

Canadian sought a partner to stay in the mine

Marc Oppenheimer, Crystallex's president in 2002, welcomed the choice of the company by the Corporación Venezolana de Guayana (CVG) as an operator in Las Cristinas. (El Mundo, 11-01-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=18&Id_Noticia=35348)

Venezuela undertakes path to become leader in cocoa production

The Bolivarian Republic of Venezuela undertakes from now on the path to become a leading power in cocoa production and exportation, with the aim to strengthen the commercial and economic exchange of the nation with countries of Central Europe, Asia and Africa. The information was stated by Venezuela’s President Hugo Chavez during his Sunday program Alo Presidente, number 366, carried out in a chocolate factory in the central state of Miranda. The traditional Sunday program was devoted to Venezuelan cocoa, branded by the Venezuelan President as both one of the best in the world and a as a strategic product, which in a future will be exported to countries such as Portugal, Libya, Saudi Arabia, Ukraine, Belarus and Russia. President Chavez explained that national cocoa production per hectare for the last 11 years has increased at least 30% in virtue of the funding and the scientific-technological development granted by the National Government to the sector. (AVN, 11-01-2010; http://www.avn.info.ve/node/26033)

Venezuela's business chamber expects the government to protect economic rights

The Venezuelan Federation of Trade and Industry Chambers (Fedecámaras) will go the Supreme Tribunal of Justice (TSJ) to file a suit requesting "constitutional protection" of economic rights. Although the legal action is ready, the business association is holding internal consultations to set the date when the business group will go to the TSJ. (El Universal, 11-01-2010; http://english.eluniversal.com/2010/11/01/en_eco_esp_venezuelas-business_01A4679695.shtml)

"In the event of seizing Polar, the State will be consolidated in the sector"

The Venezuelan government has put special emphasis on displacing the private sector from the foodstuffs market. Such a longing for becoming the main producer continues effective; in that struggle it has disclosed its ultimate target: the giant food manufacturer and supplier Empresas Polar. Ángel Alayon, an economist and professor at the Institute of Management Higher Studies (IESA) warned that any seizure of Polar would result in terrible consequences. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_in-the-event-of-sei_28A4664413.shtml)

Politics

Santos and Chavez morning reviewed the progress of the bilateral commissions

The presidents of Colombia, Juan Manuel Santos, and Venezuela's Hugo Chavez in Caracas on Tuesday reviewed the progress of the five bilateral commissions created during the process of the restoration of relations between the two countries, diplomatic sources said. Tomorrow is the second meeting between the leaders after they announced, on the 10^th August in the Colombian city of Santa Marta, reconciliation between their two countries and the opening of a new stage in bilateral relations. (El Mundo, 11-01-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10212)

Chavez Says Golf Courses Should Be Seized, Put to Other Uses

President Hugo Chavez said some of Venezuela’s golf courses should be expropriated and used for other purposes. “That’s an injustice -- that someone should have the luxury of having I don’t know how many hectares to play golf and drink whiskey and, next door, there’s misery and children dying when there are landslides,” Chavez said during his weekly television show, “Alo, Presidente.” (Bloomberg, 10-31-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_zQ474E50qk)

Congressmen expect to revise international agreements

In the first four countries -Russia, Ukraine, Iran and Syria- visited by Venezuela's President Hugo Chávez in his latest tour, more than 40 agreements were executed. The current National Assembly (AN) barely knows about their contents. Independent Deputy-elect María Corina Machado highlighted that pursuant to article 187 of the Constitution, the AN has the authority to vet the agreements, if they are deemed to run contrary to national interests. The agreement with Russia on development of the nuclear program, including the building of a nuclear reactor and a nuclear station, as well as the sale of a refinery property of state-run holding Petróleos de Venezuela (Pdvsa) in Germany -among others- seem not to be in the national interest. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_congressmen-expect-t_29A4665171.shtml)

Venezuela looks for better income redistribution based on socialist model

The measures adopted by the Venezuelan Government such as the nationalization of companies, creation of joint ventures with friend countries, promotion of local values, and the creation of social production companies, among others, are just some of the tools used to try to redistribute incomes. The statements were made on Sunday by the Science, Technology and Intermediate Industries Minister Ricardo Menendez in a TV interview. He assured that most of the problems affecting society are caused by capitalism, which has created huge differences among the diverse social classes. (AVN, 11-01-2010; http://www.avn.info.ve/node/26053)

Petroleum & Energy

Only 148 lake equipment of the 1,137 PDVSA seized

from contractors in May 2009 (motorboats, barges and tug boats) are operational while the rest remain as scrap in the wharfs, said Venezuelan Oil Engineers Society (SVIP) regional president Hernán Ugalde. He blamed PDVSA for not buying the spare parts the vessels, choosing instead to stow them. (Veneconomy, 11-01-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23721&idc=4)

Pdvsa acknowledges that social welfare programs jeopardize it

The number of obligations and commitments of a social nature imposed on state-run oil holding Petróleos de Venezuela (Pdvsa) by the administration of President Hugo Chávez causes the oil industry to regard the State interests as a potential risk for its operations. A Pdvsa paper submitted to US financial authorities in the context of issuance of bonds explains that "the Bolivarian Republic of Venezuela, as the single owner of the company, by attempting to use PDVSA as a vehicle to reach certain macroeconomic and social objectives, could adversely affect the results of our operations and financial status." "We might make investments, expenses and sales in conditions that affect our operational and financial results," the state-owned holding added. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_pdvsa-acknowledges-t_29A4664691.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.