Oil & Energy
Venezuela oil price below US$ 40 for a 2nd week
The
price Venezuela receives for its mix of medium and heavy oil bounced off its
lowest point since the coordinated OPEC supply freezes were announced back in
November. According to figures released by the Ministry of Petroleum and
Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela
S.A. (PDVSA) during the week ending June 30 rose to US$ 39.95, up 72 cents from
the previous week's US$ 39.23. According
to Venezuelan government figures, the average price in 2017 for Venezuela's mix
of heavy and medium crude fell to US$ 43.63. (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2439267&CategoryId=10717)
Economy & Finance
Miner CRYSTALLEX wins court order against NOMURA over
Venezuela deal
Canadian
miner CRYSTALLEX, seeking to recoup financial damages from an expropriation by
Venezuela, won U.S. court approval on Friday to bar Japanese bank NOMURA from
transferring securities owned by this nation. The court decision follows a
Reuters report that Venezuela is seeking to sell some US$ 710 million in
fixed-income securities back to NOMURA, which originally issued them in 2008,
to raise cash amid an economic crisis. The United States District Court for the
Southern District of New York granted the request, according to court papers. The
company, which cited the Reuters report in its request, said Venezuela was
seeking to draw down assets in the United States to prevent it from collecting
on the award. The move is one of the most aggressive legal gambits to date by a
company seeking compensation for a wave of nationalizations under the leadership
of late Socialist leader Hugo Chavez. (Reuters, http://www.reuters.com/article/us-venezuela-crystallex-idUSKBN19L2WV)
Venezuela selling gold, Goldman selling Venezuela
bonds?
A guest
on Bloomberg Radio Friday morning suggested that Venezuela could be selling
gold to pay for chemicals to dilute its domestic "heavy" oil for fuel. Meanwhile, GOLDMAN SACHS Asset Management
reportedly sold Venezuela bonds with a face value of at least US$ 300 million
to a small group of hedge funds in recent days, according to an anonymous
source quoted by MarketWatch, which notes that the GOLDMAN bond purchase in May
drew harsh criticism from Venezuelan opposition leaders and others who think
investors should not finance the authoritarian regime of President Nicolás
Maduro. Venezuela critic Russ Dallen, a publisher, lawyer and Venezuela bond
investor through Caracas Capital, offers some background on the political
stagnation under Maduro. In short, the escalating violence and civil strife in
the country means an impending "inflection
point," Dallen says: "the
Maduro regime has been unable to raise significant foreign capital – aside from
the loan from ROSNEFT against 49.9% of Petroleos de Venezuela's U.S. refining
operation CITGO and the “morally repugnant” cash injection from GOLDMAN SACHS
last month. The Maduro regime’s refusal to co-exist and/or negotiate with an
opposition-dominated legislature has led Maduro to unleash his own weapon of
mass destruction by calling a National Constituent Assembly (ANC). The
government is using this wafer-thin veneer of constitutional legality for two
reasons ... One is to bring along the military rank-and-file. The second reason
for the legal lip-service is an attempt to give legal surety to potential
investors (namely Russia, China & others interested in investing in oil,
gold and mineral mining ventures) that were put off by the lack of National
Assembly approval. Russia and other investors felt that ground was too shaky to
invest billions of dollars, hence the regime’s National Constituent Assembly,
designed to replace the obstinate National Assembly and pave that legal path
for investment more solidly.” (Barron’s: http://www.barrons.com/articles/venezuela-goldman-selling-selling-gold-1498850055)
Maduro hikes minimum wage 50%, effectively down 17%
President
Nicolas Maduro raised the country's minimum wage by half on Sunday to just over
US$ 12.50 per month at the black-market exchange rate. But given the currency's
fall, the new minimum monthly wage of 97,532 bolivars is effectively down 17%
in dollar terms since the last increase in May. The currency's fall -- of 99.7%
since Maduro was elected president in April 2013 -- has exacerbated a brutal
economic crisis that has millions struggling to find or afford food. A thousand
dollars bought in local currency when Maduro was elected would be worth just US$
3 today. Maduro's leftist government blames speculators and the opposition for
the problems. "Following the immoral
campaign that fixes prices through a false dollar abroad ... we are going to
put the handcuffs on ... the whole campaign of speculation," said Maduro
on state television, adding that the rise would be effective retroactively from
July 1. (Reuters, http://www.reuters.com/article/us-venezuela-economy-idUSKBN19N0X5)
Politics and International Affairs
Venezuela high court, top prosecutor in political
showdown
A
conflict between President Nicolas Maduro's government and the increasingly
defiant chief prosecutor was coming to a head today as Luisa Ortega Diaz
announced she was boycotting a Supreme Tribunal hearing on whether to lift her
immunity from being tried for unspecified irregularities. Ortega Diaz argued
the outcome of the hearing is a foregone conclusion decided by the government
that violates her legal right to defense and due process. "I am not going to validate a circus that
will stain our history with shame and pain," she said at a news
conference as the hearing was getting under way. The case against her for
alleged "serious errors"
while in office was brought by a ruling-party lawmaker and could lead to her
ouster. National Guard troops and riot police took up positions outside the
court building in Caracas, where protests against Maduro's government have been
raging almost daily for several months. On Monday, the government-stacked
Supreme Tribunal acted to strip a key power from Ortega by acting itself to
impose her deputy: a loyalist who was sanctioned by the United States in 2015
for her role prosecuting some of Maduro's most vocal opponents. The decision to
name Katherine Harrington to the post effectively made her the nation's No. 2
law enforcement official even though the constitution says the semi-autonomous
chief prosecutor has the power to name her own deputy, with confirmation by
congress. Lawmakers on Monday had re-confirmed Ortega's own choice as deputy
after he was removed by the high court last week. Almost daily assaults by the
Maduro regime have only emboldened Ortega: First, she noticed people
started following her family. Then, anonymous threats started to pour in. Her
stepdaughter was briefly kidnapped. Then the nation’s Supreme Tribunal gutted
most of her powers, froze her bank accounts and banned her from leaving the
country. Vice President Tareck El Aissami accused the Attorney General of plotting
to overthrow the administration of President Nicolas Maduro. His comments came
hours after Ortega summoned Maduro’s intelligence chief and the recently
dismissed commander of the national militarized police for questioning about
alleged human rights violations over the course of more than three months of
sometimes-violent protests accompanied by scores of deaths. On Monday, her office
was raided by officials from the Comptroller General, an unprecedented
happening even in the country’s amazing political history. The Comptroller
General’s is the office tasked with detecting and pursuing financial misdeeds
in the Venezuelan government. The raids took place as Attorney General Luisa
Ortega was delivering a support speech at the opposition-controlled National
Assembly. “We never imagined it would
reach this magnitude,” said German Ferrer, her husband, who is a lawmaker
for the ruling socialist party. As Venezuela's political crisis has deepened,
Ortega has emerged as Maduro's most-feared critic. In April, the once-loyal
leftist broke with the government over its decision to strip congress of its
last powers, and she has made common cause with pro-democracy opponents in
blasting Maduro's plans to rewrite Venezuela's 1999 constitution. The Supreme
Tribunal has thrown out her order for the former head of the National Guard to
testify about alleged human rights abuses during the crackdown on the protests,
which have left at least 80 dead. Ortega was warmly applauded Monday during an
address by opposition lawmakers who until a few months ago considered her
Maduro's jailer. The Venezuelan opposition staged a demonstration on Saturday
in Caracas against a Chavista request that the nation’s attorney general be
submitted to a hearing, which could result in her being sent to trial. Ortega
thanked the public and international organizations for standing with her. Harrington,
a career prosecutor, was sanctioned by the Obama administration in 2015 for her
role pursuing charges against members of the political opposition. That
included the jailing of Caracas Mayor Antonio Ledezma on charges of plotting to
overthrow Maduro and a case against former lawmaker Maria Corina Machado that
was based on emails later shown to be fraudulent. (ABC News: http://abcnews.go.com/International/wireStory/venezuela-names-loyalist-sanctioned-us-key-legal-post-48434379;
Bloomberg, https://www.bloomberg.com/news/articles/2017-06-30/maduro-s-most-dangerous-critic-confronts-legal-system-she-served;
TIME: http://time.com/4840764/venezuela-chief-prosecutor-national-guard/; Latin American Herald Tribune,http://www.laht.com/article.asp?ArticleId=2439265&CategoryId=10717;
http://www.laht.com/article.asp?ArticleId=2439227&CategoryId=10718; http://www.laht.com/article.asp?ArticleId=2439314&CategoryId=10717)
Attorney General’s attorneys recused 17 Supreme
Tribunal justices
Private
attorneys acting on behalf of the nation’s Attorney General, Luisa Ortega Díaz,
have recused 17 of the Supreme Tribunal’s members due to irregularities in
procedures underway against her. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/defensa-ortega-diaz-recuso-magistrados-sala-plena-del-tsj_659798)
…and asks the US for a report on Maduro’s conviceted
relatives
Venezuela’s
Attorney General has also formally asked the US to provide information on the
case of Maduro’s nephews, Efraín Flores and Francisco Flores, who have been
found guilty of drug trafficking by a US jury and are awaiting sentence. More
in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/fiscalia-pide-eeuu-informe-familiares-pareja-presidencial_659797)
Venezuela opposition unites with dissident chavistas to challenge Maduro with
unofficial referendum
President
Nicolas Maduro's foes have announced plans for an unofficial referendum to let
Venezuelans have their say on his plan to rewrite the constitution and the
opposition's alternative push for an election to replace him. The opposition,
starting a fourth month of street protests against the socialist government it
decries as a dictatorship, will organize the symbolic vote for July 16, in a
joint effort with dissident chavistas,
as part of its strategy to delegitimize the unpopular Maduro. Venezuelans will
also be asked their view on the military's responsibility for "recovering constitutional order"
and the formation of a new "national
unity" government, the Democratic Unity coalition announced. "Let the people decide!" said Julio
Borges, the president of the opposition-led National Assembly. While the
referendum would lack any real enforcement mechanism, it will occur just weeks
before a July 30 vote for delegates for a constitutional convention that is opposed by
two-thirds of voters. Critics fear Maduro will use the convention to
consolidate power and take the country further toward Cuba-style
authoritarianism. With the opposition saying it won’t participate in the vote,
Venezuela is bracing for an uptick in violence that has left more than 80 dead
since March. The opposition has announced a continuing schedule of
demonstrations and blockades to continue protesting the Maduro dictatorship
this week, (Reuters, http://www.reuters.com/article/us-venezuela-politics-idUSKBN19O1M0;
Bloomberg, https://www.bloomberg.com/news/articles/2017-07-03/venezuela-opposition-said-to-plan-plebiscite-on-maduro-s-future);
and more in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/oposicion-convoca-al-trancazo-este-martes-4-de-julio;
El Universal, http://www.eluniversal.com/noticias/politica/mud-convoca-nuevo-trancazo-este-martes_659799)
Venezuela’s
poor rebel, roiling Maduro’s socialist strongholds
In
Caracas, the rich and poor are suddenly less divided. For most of Venezuela’s
two-decade socialist experiment, the city’s wealthier, whiter east has been the
hotbed of anti-government sentiment. Now, noisy protests are erupting in
poorer-but-calmer western neighborhoods that were strongholds for embattled
President Nicolas Maduro as crime explodes and medicine and food are scarce and
expensive. Residents in neighborhoods like La Candelaria, blocks from the
presidential Miraflores Palace, erect barricades and yell slogans against
Maduro’s government, banging pots and pans from inside their homes. They’re
increasingly demanding a change in government, infuriated by mismanagement and
Maduro’s proposed constituent assembly to rewrite the constitution -- and
perhaps seize total control. (Bloomberg, https://www.bloomberg.com/news/articles/2017-07-03/venezuela-s-poor-rebel-roiling-maduro-s-socialist-strongholds)
General charged with human rights abuses promoted to
command Venezuela’s Army
Hours
after Venezuela’s Attorney General charged General Gustavo Gómez López with
human rights abuses he was promoted by President Nicolás Maduro to Commander
General of the Army here. Until now, González Lopez has headed up the National
Bolivarian Intelligence Service (SEBIN), and is one of the officers sanctioned
by the United States for being responsible or complicit in serious human rights
violations. He also served briefly as Minister of the Interior under Maduro. Maduro
also decorated colonel Bladimir Lugo Armas, who attacked Julio Borges, the
president of the Parliament, and previously attacked Lilian Tintori and
Antonieta Mendoza – wife and mother of opposition leader Leopoldo López, in
addition to making several mobile phones of journalists "disappear." (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2439307&CategoryId=10717;
and more in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/conozca-al-nuev/)
Pope calls on Venezuela to find peaceful, democratic
solution to unrest
Pope
Francis used his public address on Sunday to call for a peaceful and democratic
solution to the unrest in Venezuela, which for months has been gripped by
political instability and violence. The Argentine pontiff asked worshippers
gathered at the Vatican City’s St. Peter’s Square to pray for Venezuela and
said his thoughts were with those families whose children have been killed in
the street protests. “I call for an end
to violence and for a peaceful and democratic solution to the crisis,” the
Pope told the faithful congregated for the Angelus prayer.
“May Our Lady of Coromoto intercede in Venezuela,” Francis added, referring to Catholic Patroness of the South American nation. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2439277&CategoryId=10717)
“May Our Lady of Coromoto intercede in Venezuela,” Francis added, referring to Catholic Patroness of the South American nation. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2439277&CategoryId=10717)
CARICOM's division on Venezuela could cloud leaders'
summit
Prime
Minister Andrew Holness left Jamaica yesterday for the annual meeting of the
Heads of Government of the Caribbean Community (CARICOM) in Grenada with
ambiguity still clouding its position on Venezuela's political and economic
crises. Holness said on Sunday that the issue would be on the meeting's agenda.
However, CARICOM Secretary General Irwin LaRocque was reported yesterday as
saying that the matter is “not on the
agenda”. LaRocque added that, while the Venezuelan issue is not on the
agenda, “there are some basic principles
that the community has elaborated and this principle still holds.” CARICOM
still appeared divided on the issue, with three of its 15 member states — St
Vincent and the Grenadines, Antigua and Barbuda, and Dominica — urging the
others not to interfere in the internal affairs of Venezuela. There is also speculation that some of
CARICOM states fear the effect of supporting the resolution on their
concessionary facility with oil-rich Venezuela, known as PETROCARIBE. (Jamaica
Observer: http://www.jamaicaobserver.com/news/caricom-8217-s-division-on-venezuela-could-cloud-leaders-8217-summit_103897)
Adiós to Venezuelan democracy
Constitutions,
like diamonds, are supposed to last. But that is not the view of Nicolás
Maduro, a former bus driver chosen by a dying Chávez to replace him as
president in 2013. He has ordered a new constituent assembly, to be chosen on
July 30th. Everything about the process is different from 1999. In violation of
Chávez’s constitution, it has been called by presidential decree rather than by
referendum. Maduro says its purpose is to defeat the opposition’s “fascism”. Yet it will be chosen under a
system that might have been devised by Mussolini. Each of the 340
municipalities will elect one assembly member, regardless of size (only state
capitals will get two), meaning the opposition-supporting cities are
under-represented. A further 181 members will be chosen from communal and occupational
groups controlled by the regime. Maduro wants the assembly because he can no
longer stay in power democratically. Low oil prices and mismanagement have
exacted a heavy toll. Food and medicines are scarce; diseases long curbed, such
as diphtheria and malaria, are killing once more. The opposition won a big
majority in a legislative election in 2015. Since then Maduro has ruled by
decree and through the puppet supreme court. In almost daily opposition
protests since April, 75 people have been killed, many shot by the National
Guard or pro-regime armed gangs. Maduro’s lurch to dictatorship has opened
cracks in his political base. Luisa Ortega, the attorney-general and long a
chavista, has become an outspoken critic. The constituent assembly will “complete the definitive dismantling of
democracy”, she told a Peruvian newspaper this week. Its apparent purpose
is to turn Venezuela into a dictatorship along Cuban lines. The only potential
obstacles to Maduro’s gambit are on his own side. Many chavistas oppose the
constituent assembly. The armed forces, which sustain Maduro in power, have
wavered but not bent—so far, at least. Tension is rising. On June 27th,
a police officer in a helicopter buzzed the supreme court and interior
ministry. A pro-government mob attacked the parliament, and large-scale looting
took place in Maracay, west of Caracas. Maduro and his circle lack the aura of
heroism that originally surrounded Fidel Castro. “If chavista Venezuela was a caricature of the Cuban revolution, Maduro
is a caricature of the caricature,” says the Latin American diplomat. There
is no revolution in Venezuela, just squalid abuse of power. More blood may be
spilled before this tragedy ends. (The Economist: https://www.economist.com/news/americas/21724388-nicol-s-maduro-prepares-caricature-caricature-cuba-adi-s-venezuelan-democracy)
The number of Venezuela’s who want to migrate has
tripled in 3 years, according to a study conducted by the Catholic
University in association with Vanderbilt University and DATANALISIS. The desire to leave is seven times more than
it was in 2012, and has tripled since 2014. According to the Venezuela chapter
of the Americas Barometer, carried out in January 2017, one out of every three
Venezuelans would like to live or work in another country. More in Spanish:
(Notiminuto: http://www.notiminuto.com/noticia/se-triplico-la-intencion-de-emigrar-del-venezolano-desde-2012/)
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.
