International Trade
Cargo arrived at
Puerto Cabello:
- Over 35,900 tons of yellow corn
from Louisiana to Industrias del Maíz, Agro Consorcio Orograin and
Alimentos Fontana C.A. (Alfonca).
- Over 1,580 tons of milk from
New Zealand for state agency CASA.
- Over 261 tons of disposable
diapers in 28 containers from Procter & Gamble Perú to their local
affiliate
- Over 19,000 tons of UPK granular fertilizer from Rusian
company Ojsc
Prosagro Chevepovets for BARIVEN S.A.
- Over 16,595 tons of beef,
chicken, milk and margarine
from Brazilian company JBS S/A for CASA
- 6,000 tons of rice from GuRice
Development Board for CASA
23 ships remain at bay at Puerto Cabello
awaiting dock assignment.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-22-mil-toneladas-de-alimentos-llegaron-para-Casa-2247118/2014/10/07/358590; http://www.notitarde.com/La-Costa/Mas-de-25-mil-toneladas-de-maiz-llegaron-al-puerto-2248372/2014/10/09/360950))
Private imports decrease,
Puerto Cabello is reported to be down to 60% occupancy
Movement at the Puerto Cabello maritime terminal has declined, as private
sector imports are down 45%. FEDECAMARAS Carabobo State President, Damiano Del
Vescovo says this is due to poor allocation of foreign exchange. He reports
that 19 ships arrived at dock this week, 11 of them carrying white and yellow
corn, sorghum, rice, and vegetables. More in Spanish: (Notitarde; http://www.notitarde.com/Valencia/Casi-a-la-mitad-cayeron-todas-las-importaciones-privadas-2247729/2014/10/09/359841)
Over 25,000 tons of
food seized in fight against smuggling
General Vladimir Padrino, Chief of the
Strategic Operational Command of the Armed Forces says a total 25,448 tons of
food has been seized by the government year to date in its battle against
outbound smuggling, along with 14,695 tons of strategic material and 53,454,000
liters of oil, between diesel and petrol. (AVN, http://www.avn.info.ve/contenido/seized-over-25000-tons-food-amid-fight-against-smuggling)
Oil &
Energy
CITGO's U.S. refineries sale takes another bidding
round
Investment bank Lazard Ltd has asked bidders that have
shown interest in buying CITGO Petroleum Corp's U.S. refineries to submit an
additional round of offers, as the sale process proceeds despite doubts. An
initial round of bids was tabled at the end of September with several companies
showing interest. (Reuters, http://www.reuters.com/article/2014/10/09/oil-citgo-pete-sale-idUSL2N0S41IS20141009)
SPECIAL REPORT: Venezuela, in a quiet shift, gives
foreign partners more control in oil ventures
Today, the Venezuelan economy is struggling and so is
its government-run oil monopoly, Petróleos de Venezuela, or PDVSA. The company
is mired in a cash-flow crisis and has had to tap the Central Bank for millions
of dollars in loans. It has considered selling its United States gas station
subsidiary, CITGO, and is contemplating raising gasoline prices at home, which
are the cheapest in the world. But in a quiet change that might surprise many
Venezuelans, the company has been discreetly moving to give more control to
foreign oil companies that participate with it in joint ventures. In the hopes
of jump-starting stagnant production through increased investment, the company
has signed or is negotiating financing agreements with numerous foreign oil
companies operating here. These agreements give the companies greater say over
how drilling operations are run and how they buy supplies and equipment, as
well as greater control over spending and profits, according to those familiar
with them, some of whom asked not to be identified to preserve relations with
PDVSA. One of the first agreements was signed with the American company CHEVRON
in May 2013. The deal included a US$ 2 billion loan by CHEVRON to PDVSA to
cover the state oil company’s portion of investment in an oil field across Lake
Maracaibo from Mene Grande. But it also included provisions sought by CHEVRON
to guarantee that the new loan, as well as millions of dollars in unpaid
dividends from past operations, would be paid promptly from oil revenues. The
deal also provided for tighter controls over how the loan would be spent and
allowed for greater flexibility in running the joint project, they said. Several
other oil companies have renegotiated their agreements with PDVSA along similar
lines. And while the oil companies remain minority partners with PDVSA, the new
agreements give the companies a greater say in running Venezuela’s oil fields
than they have had in years. That includes allowing for greater leeway in
buying supplies and hiring subcontractors, without going through PDVSA-controlled
subsidiaries, a frequent source of delays and corruption. The recent loan
agreements also generally include provisions that would allow disputes to be
resolved through international arbitration or in New York courts under New York
law. That is a departure from the operations contracts that govern the joint
ventures, which are subject only to Venezuelan law. (The New York Times, http://www.nytimes.com/2014/10/10/world/venezuela-in-a-quiet-shift-gives-foreign-partners-more-control-in-oil-ventures.html?smid=fb-share&_r=1)
Commodities
PDVSA Industries may increase lubricant
production at the Vassa plant in Guacara, Carabobo state. PDVSA’s Chief Eulogio Del Pino explains that
adding a third shift can increase production by around 30%, from 5 to 6.5 million
liters of oil a month. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41401&idc=4)
Half the tuna can factories in Sucre state have
stopped operations because
of tuna shortages and the other half operates at a third of its productivity,
according to industry spokesman Roger Palacios. He reports there is also
shortage of containers. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41398&idc=3)
Economy
& Finance
IMF is projecting 3% drop in GDP and inflation
for Venezuela
The International Monetary Fund is projecting
that Venezuela will enter a depression this year which will extend through to
2015. It forecasts GDP will drop by 3% in 2014, and will contract another 1% in
2015. It is now estimating prices will rise 64.3% in 2014 and 62.9% in 2015.
More in Spanish: (Notitarde; http://www.notitarde.com/Portada/FMI-vaticina-decrecimiento-e-inflacion-en-Venezuela/2014/10/08/66049; El Universal, http://www.eluniversal.com/economia/141008/fmi-advierte-sobre-severas-distorsiones-en-el-pais; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/fmi-estima-que-economia-de-venezuela-caera-3-en-20.aspx)
Venezuela says it has serviced
Global 2014 bond, slams default fears
Venezuela said it paid around US$ 1.56 billion
to service its Global 2014 bond and interests on Wednesday, admonishing what it
called a "perverse"
international campaign to foster default fears. "This payment, which was always planned, dismantles a campaign launched
by international financial capital's spokespeople and media to harm the
Republic's image and its people's integrity with perverse political and
economic aims," said a statement from the Information Ministry.
(Reuters, http://www.reuters.com/article/2014/10/08/venezuela-bonds-idUSL2N0S31HW20141008;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41386&idc=2;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2355579&CategoryId=10717)
International reserves are down to US$ 19.814
billion, lowest since November 2003
After servicing a first tranche of debt,
Venezuela's international reserves have dropped down to US$ 19.814 billion,
according to Central Bank data. This is a descent of 8.8% year to date and the
lowest point since November 4, 2003. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141010/reservas-internacionales-se-ubican-en-19814-millones)
How Venezuela got no dollars from US$ 65 billion
bond sales
In the past decade, Venezuela
and the nation’s oil company Petroleos de Venezuela SA have sold US$ 65 billion
of dollar-denominated bonds without ever seeing a dime. Sure, they got money, but
took in no dollars. To preserve foreign reserves while injecting some
much-needed hard currency into the economy, the government, PDVSA and the
central bank sold the debt to local investors in return for bolivars. Buyers
then sold the notes abroad to obtain U.S. currency, which has become scarce as
Venezuela tries to limit capital flight. With US$ 4.5 billion of debt coming
due this month and reserves at an 11-year low, Venezuela is realizing the bond
sales didn’t actually buy it much time and are instead exacerbating a cash
crunch that’s fueling concern the country will default. The nation’s bonds have plummeted 9.5% in
the past month, the most in emerging
markets. (Bloomberg,
http://www.bloomberg.com/news/2014-10-07/how-venezuela-came-away-with-no-dollars-from-sales-andes-credit.htm)
The 61% devaluation that Venezuela told no one about
The world’s steepest currency devaluation is happening with so little
fanfare that you may have missed it. Venezuela is forcing companies to pay an
average 61% more for dollars in government auctions compared with a year ago,
according to estimates by Barclays Plc. The sales are the only way most of them
can get their hands on scarce foreign currency to purchase goods from abroad
without access to the official exchange rate of 6.3 bolivars per dollar. (Bloomberg, http://www.bloomberg.com/news/2014-10-08/the-61-devaluation-that-venezuela-told-no-one-about.html)
EXXON wins US$ 1.6
billion settlement for Venezuela seizure
EXXON MOBIL was awarded a US$ 1.6 billion
settlement by an international arbitration panel for assets seized by
Venezuela’s government in 2007, a fraction of what the crude producer had
sought. The World Bank’s International Center for Settlement of Investment
Disputes, or ICSID, awarded the sum to EXXON as compensation for investments in
the Cerro Negro project and other losses. The company had originally sought as
much as US$ 14.7 billion for assets nationalized after it refused to accept
terms of a partnership with Petroleos de Venezuela SA. In 2011, the
International Chamber of Commerce, or ICC, ordered PDVSA to pay Exxon US$ 907.6
million, minus a US$ 161 million counterclaim by PDVSA, for the seizure of a
41.67% stake in the Cerro Negro heavy-oil project in the Orinoco Belt, the same
one that triggered the ICSID claim. PDVSA said in 2012 that it had settled the
ICC ruling with a cash payment of US$ 255 million. Speaking through Foreign
Minister Rafael Ramírez, the Venezuelan government hailed the ruling as a
victory. (Business Week, http://www.businessweek.com/news/2014-10-09/exxon-wins-1-dot-6-billion-settlement-for-venezuela-seizure;
more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/ramirez--el-ciadi-rechazo-las-pretensiones-exagera.aspx#ixzz3Fjuacsjj; El Universal; http://www.eluniversal.com/economia/141010/ciadi-resuelve-que-venezuela-pague-16-millardos-a-exxon; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/ramirez-el-ciadi-rechazo-las-pretensiones-exagerad.aspx)
World Bank tells Venezuela hiding statistics is
a thing of the past
Augusto de la Torre,
the World Bank's chief economist for Latin America says delays in divulging
economic statistics are
reminiscent of past practices in Latin America and make it difficult for
international institutions to evaluate the country. "It is odd yet understandable that the more problems a country have, the
more cautious they are in showing information, and that is the Latin America of
the past". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/bm-a-venezuela-atrasos-en-estadisticas-es-una-prac.aspx#ixzz3FYEy7MaG)
Fraser Institute:
Venezuela is the world's least economically free country
Venezuela ranked last among 152 countries
assessed in the Economic Freedom of the World Report 2014, conducted by the
Canadian Fraser Institute. The ranking is based on information available one or
two years ahead. The study measured five areas: size of government, legal
structure and security of property rights, access to sound money, freedom to
trade internationally, and regulation of credit, labor and business. (El
Universal, http://www.eluniversal.com/economia/141009/fraser-institute-venezuela-is-the-worlds-least-economically-free-count)
Politics and
International Affairs
UN group calls for freeing López immediately
The UN's Human Rights
Council Working Group on Arbitrary Detentions has asked Venezuelan authorities
to immediately free Leopoldo López, founder of Voluntad Popular, and considers
his detention "arbitrary"
and in violation of the International Convention on Civil and Political Rights.
It says the charges of provoking disturbances in order to overthrow the
government are baseless. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/141009/en-onu-instan-a-venezuela-a-liberar-a-lopez-de-inmediato; El Nacional, http://www.el-nacional.com/politica/ONU-gobierno-liberar-Leopoldo-Lopez_0_497350396.html)
Opposition coalition
convenes crusade against violence
Jesús "Chúo" Torrealba, Executive
Secretary of opposition umbrella group Democratic Unity Conference (MUD) called
on "all Venezuelans to join the
national crusade against violence," and said he call is not intended
to dissenters only, but "to Venezuelans
against violence, and all Venezuelans and chavistas interested in joining us will be welcomed with
respect, because this struggle concerns everyone". He announced that a
huge rally would be held in Caracas on October 18, yet he would not give
further details. He added that the MUD would hold 22 citizens' assemblies on
October 11 across the country to discuss the issue of violence. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141008/opposition-coalition-convenes-crusade-against-violence)
Distancing
themselves from street vendors?
Pro government legislator Saúl Ortega says the
country’s main cities slums are “filled" with paramilitaries. He
explained, “its vox populi. A very small
portion of those working as street vendors are Venezuelans who need sources of
employment but most are these illegal people that have turned this into a
problem.” (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41396&idc=3)
Two people have been arrested for expressing
their opinions in their Twitter accounts. Abraham David Muñoz (@AbraahamDz) and Inés González
(@inesitaterrible) were remanded to the SEBIN headquarters in Caracas on
Tuesday after they were charged with alleged insults to officials and inciting
hatred. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41374&idc=1)
OAS anticorruption delegation
Inspects Venezuela
A Commission of the Anti-Corruption Mechanism
of the Organization of American States (OAS) held an “on-site” visit to Venezuela from September 30 to October 2 with the
country´s consent, as part of the analysis that the mechanism carries out in
accordance with the methodology adopted by consensus among its member
countries. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2355646&CategoryId=10717)
Venezuela meets
international protocols to prevent Ebola here
Health Minister Nancy Perez met with
representatives of the World Health Organization (WHO), workers of harbor
company Bolivariana de Puertos, as well as epidemiologists, and others, to
strengthen epidemiological surveillance and confirm that the country has
updated protocols to monitor the entrance to the country of people who come
from nations where the Ebola fever has spread. (AVN, http://www.avn.info.ve/contenido/venezuela-meets-international-protocols-prevent-ebola-country)
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.
