January 21, 2020

International Trade

US$ 260 million reported in alcoholic beverage exports from Venezuela

Luis Enrique Cardenas, President of the Venezuelan Alcoholic Industry Chamber (CIVEA) reports that close to US$ 260 in alcoholic beverages were exported from Venezuela by the private sector during 2019, particularly to the European Union. (El Universal; https://www.eluniversal.com/economia/59929/exportan-260-millones-en-bebidas-alcoholicas)

 

Oil & Energy

U.S. extends CHEVRON Venezuela sanction waiver

The United States Treasury Department granted CHEVRON another three-month sanction waiver to continue operating in Venezuela, with the expiry date of this latest extension set for April 22. The Treasury Department has been granting Chevron three-month extensions of its sanction waiver for a while now, with the one it announced last October reportedly being a topic of heated discussion in the Trump administration in light of Washington’s attempts to stifle all oil revenues going into the coffers of the Maduro government. Some, however, notably Secretary of State Mike Pompeo, argued that the presence of a U.S. company in Venezuela would help to quicken the recovery of its oil industry when—and if—the government changes. Reuters noted that CHEVRON reported losses of US$ 104 million related to its business in Venezuela for the first nine months of the year. Yet if the Treasury Department stops granting it sanction waivers, Chevron would have to leave the country, which would cost it US$ 2.7 billion in assets. Besides CHEVRON, four oilfield services companies have been granted sanction waivers to continue doing business in Venezuela. However, SCHLUMBERGER, BAKER HUGHES, HALLIBURTON and WEATHERFORD have wound down their operations there to virtually nothing. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/US-Extends-Chevron-Venezuela-Sanction-Waiver.html; The Houston Chronicle: https://www.houstonchronicle.com/business/article/American-energy-companies-to-remain-in-Venezuela-14990649.php; Reuters, https://www.reuters.com/article/us-venezuela-chevron/u-s-grants-chevron-another-three-months-for-venezuela-operations-idUSKBN1ZH0DH)

 

Oil buyers steer clear of Venezuela over Petro payments

Buyers of Venezuelan crude oil have stopped dealing with this nation after officials started demanding payment of port fees in the country’s controversial Petro cryptocurrency. Sources told media outlet World Oil that exports of at least a million barrels of oil were put on hold after the government announced the fees must be paid in Petro tokens. Buyers were reportedly worried that paying in Petro may violate US sanctions. (Coin Rivet: https://coinrivet.com/es/oil-buyers-steer-clear-of-venezuela-over-petro-payments/)

 

Economy & Finance

Venezuela Petro dumped at a 50% discount at LocalBitcoins

Venezuelans are dumping the government-issued Petro, a crypto coin backed by a barrel of Oil, for half its value (US$ 30) at peer-to-peer exchanges like LocalBitcoins. The situation has worsened over the past few weeks as the government has scrambled to tame the USD/Bolivars rate but shutting down avenues for liquidation. At the time of writing, 50k Bolivars equals to $1 while 1 Petro (PRT) is pegged at US$ 60. The Maduro-led regime asserts that each coin is more than a medium of value but a crypto asset, like Bitcoin, in an economy stricken by economic turmoil and world’s leading hyperinflation. According to sources in Venezuela, the government airdropped 0.5 Petro to government workers and pensioners claiming that their effort reached 6 million people. As a crypto asset, the objective of the government was to probably avail a shield for its citizens. However, it soon emerged that people used the same airdropped Petro to buy ordinary stuff through Point-of-Sale and government-supported Petro Wallets. Both avenues were shut, paving the way for people to liquidate at peer-to-peer exchanges. At LocalBitcoins, the value of each Petro was consequently priced at US$ 30, 50% of what the government had set. (Coin Gape: https://coingape.com/venezuela-petro-dumped-at-a-50-discount-in-localbitcoins/)

 

Maduro opens international crypto casino

Nicolas Maduro has authorized the opening of an international casino at a luxury hotel in Caracas where bets must be placed in Petros, the country’s national oil-backed digital currency. Several cryptocurrencies and fiat currencies can be exchanged into Petros to wager in the casino. Maduro announced Friday that he has authorized the opening of a casino at the Humboldt Hotel in Caracas where bets must be placed in Petros. The hotel, located on the peak of El Avila hill, was reopened in 2018. Gamblers must acquire PTR to participate. Following Friday’s casino announcement, the media started reporting that Venezuela may be warming up to casinos again. The Humboldt Hotel’s casino is expected to begin operations in the coming months, but Maduro did not reveal whether he plans to open more casinos. (Bitcoin: https://news.bitcoin.com/maduro-opens-crypto-casino-venezuela/)

 

Politics and International Affairs

Pompeo vows US support as he meets Venezuela's Guaidó in Colombia

Venezuela's acting President Juan Guaidó has met with US Secretary of State Mike Pompeo in Colombia's capital, as he tries to shore up international support amid a power struggle with Nicolas Maduro.

• Venezuela is a "failed state", Pompeo said on Monday, after meeting Guaidó on the sidelines of a three-day counterterrorism ministerial meeting in Bogota. "I would fully expect there will be further action that the US would take to continue to support President Guaidó and the Venezuelan people," Pompeo told journalists. "We do not talk about particular sanctions, but everyone can fully expect that the US is not done," Pompeo warned, without specifying what action Washington will take.
• “I’ve heard this idea that we’ve underestimated Maduro. What’s been underestimated is the desire for freedom that rests in the hearts of the Venezuelan people,” he said. “We are collectively — the Europeans, the other countries in South America, the United States are determined to deliver that outcome for the people of Venezuela.”
• "The world must continue to support the Venezuelan people's effort to restore their democracy and put an end to Maduro's tyranny which harms millions of Venezuelans and has an impact on Colombia and indeed on the entire region", he added. "I want you to know that your president is a great leader who wants to take your country in the right direction — the direction of freedom, democracy, to restore economic prosperity," Pompeo said in remarks directed at the Venezuelan people.
• From Colombia, Guaidó is set to travel on to London, Brussels and Davos, Switzerland, to attend the World Economic Forum.  Guaidó would not confirm whether he will meet US President Donald Trump in Davos.
• Separately, Colombia and the US accused Maduro of harboring armed groups such as Colombia's Marxist-led National Liberation Army rebels and of having connections to everyone from drug traffickers to Lebanon's HEZBOLLAH movement. “After today’s event I think the world has it very clear that there is a dictatorship that finances terrorism,” Guaidó said.
• Pompeo blasted Maduro as an ally to terrorist groups that in contrast to other nations in Latin America is providing “a home” to Hezbollah. “This is unacceptable,” he said."[Maduro is] now running an operation that looks more like a cartel than anything else that one could describe. This isn't good for Venezuela, it's not good for the countries that are around Venezuela," Pompeo said.
• Pompeo kicked off the counter-terrorism conference at the General Santander Police Academy in Bogota – where 22 cadets were killed in a bombing last year – by decrying Maduro as an ally to terrorist groups including the National Liberation Army, the Colombian rebel group authorities say plotted the attack. “These groups must lay down their arms and the Maduro regime must be held to account for its support of them,” Pompeo said.
• The statements could open the possibility of the US including Venezuela in the list of states that support or finance terrorism.
• Maduro allies including Diosdado Cabello, head of the powerful National Constitutional Assembly, brushed off Guaidó’s international tour, dismissing the Bogota event as “a conference of terrorists.” “It doesn’t occupy any of our time, because in truth, it’s insignificant,” Cabello said.
• Guaidó told reporters the fight for democracy "finds alternatives, different pathways, and reinforced mechanisms." He said getting rid of Maduro is a "long-term strategy." "The dictators won't want to give up the power they've taken. ... We're much more like Syria than like Cuba ... in terms of migration, access to services, the inflation. There are no vaccines for our children. They are dying because of lack of food," Guaidó said.

(Al Jazeera: https://www.aljazeera.com/news/2020/01/pompeo-vows-support-meets-venezuela-Guaidó-colombia-200121061021165.html; The Wall Street Journal: https://www.wsj.com/articles/pompeo-meets-venezuelas-juan-Guaidó-vows-continued-u-s-support-11579565437; BBC News: https://www.bbc.com/news/world-latin-america-51169801; VOA News: https://www.voanews.com/americas/pompeo-promises-more-action-boost-venezuelas-Guaidó; Bloomberg: https://www.bloomberg.com/news/articles/2020-01-20/Guaidó-meets-foreign-backers-of-bid-to-oust-venezuela-s-maduro; AP: https://apnews.com/14d31109b0c60cb574a44d3ad8cd0fde; (PBS: https://www.pbs.org/newshour/world/Guaidó-meets-pompeo-condemns-venezuela-for-links-to-terrorism)

 

Colombia rolls out the red carpet for Guaidó

 “We are honored by your presence,” Colombian President Iván Duque told Guaidó during opening remarks in a stately reception. “You will always have a friend in Colombia.” Venezuela’s pro-Maduro Supreme Court has barred Guaidó from leaving the nation it’s unknown whether authorities will let him back again this time. “That risk always exists in Venezuela,” Guaidó said to a bevy of journalists as he headed into a meeting with Pompeo. Duque shot back at critics who have questioned Guaidó’s strength Monday, characterizing his efforts as “brave” in facing off against Maduro. “Maybe many speculate, ‘Why hasn’t Guaidó put an end to the dictatorship?’” Duque said. “This can’t be a discussion about individual capabilities. We know your bravery and that confronting a dictatorship with no limits is a task that goes beyond heroism.” (PBS: https://www.pbs.org/newshour/world/Guaidó-meets-pompeo-condemns-venezuela-for-links-to-terrorism

 

Guaidó to meet top EU diplomat in Brussels

Opposition leader Juan Guaidó, recognized as Venezuela's president by more than 50 countries including the United States and most European Union members, will come to Brussels on Wednesday to hold talks with the European Union's foreign policy chief Josep Borrell, Borrell told a news conference. (The New York Times: https://www.nytimes.com/reuters/2020/01/20/world/americas/20reuters-venezuela-politics-eu.html; Reuters, https://www.reuters.com/article/us-venezuela-politics-eu/venezuelas-Guaidó-to-meet-top-eu-diplomat-in-brussels-idUSKBN1ZJ1RX)

 

Guaidó to attend Davos forum

Venezuela’s opposition leader and acting president, Juan Guaidó will attend this week’s World Economic Forum in DAVOS, lawmaker Stalin Gonzalez told AFP on Monday. Guaidó is currently in Colombia, but Gonzalez, a Guaidó ally, said the National Assembly speaker will then head to Switzerland for the annual economic meeting that opens on Tuesday. Despite being banned from leaving the country by the regime of Nicolas Maduro, Guaidó surfaced in Bogota on Sunday, where Colombian President Ivan Duque welcomed him with full presidential honors. (The Japan Times: https://www.japantimes.co.jp/news/2020/01/21/business/venezuela-opposition-leader-juan-Guaidó-attend-davos-forum/#.XibkAMhKi8U)

 

European Parliament reaffirms support for Juan Guaidó, condemns Maduro coup attempt

The European Parliament has condemned the recent attempted coup to prevent Juan Guaidó from being re-elected President of the Venezuelan National Assembly. In a resolution adopted on Wednesday, the European Parliament strongly condemns the attempt by Nicolas Maduro’s regime to install pro-government candidate Luis Parra as new Chairman of the Venezuelan National Assembly on 5 January of this year. In the resolution, the European Parliament reaffirms their support for Juan Guaidó as the legitimate President of the National Assembly and interim President of Venezuela. MEPs deplore the recent grave violations, which are incompatible with legitimate election processes. The National Assembly of Venezuela is the only legitimately elected democratic body in the country, and its powers need to be respected, says the text. The European Parliament also recalls that the EU stands ready to support a genuine process towards a peaceful and democratic solution to the Venezuelan political crisis. The resolution calls on EU Foreign Policy Chief Josep Borrell to step up the European Union’s response to restore democracy in the country, including through targeted sanctions against individuals responsible for human rights violations, but also by extending these sanctions to their family members. The text was adopted by 471 votes to 101, with 103 abstentions. (European Parliament: https://www.europarl.europa.eu/news/en/press-room/20200110IPR70010/venezuelan-crisis-meps-reaffirm-their-support-for-juan-Guaidó)

 

Guatemala's new president cuts ties with Venezuela, as promised

Guatemala’s new President Alejandro Giammattei cut diplomatic ties with the regime of Nicolas Maduro on Thursday and ordered the closure of its embassy in Caracas. The conservative Giammattei, who took office on Tuesday, had already indicated he would cut ties upon assuming power. Maduro’s foreign minister Jorge Rodriguez, in a response on Twitter, accused Giammattei of bowing down to the administration of U.S. President Donald Trump. (Reuters: https://www.reuters.com/article/us-guatemala-politics-venezuela/guatemalas-new-president-cuts-ties-with-venezuela-as-promised-idUSKBN1ZF2SB)

 

Maduro says he’s still in control of Venezuela, ready for direct talks with the United States

Nicolás Maduro cast himself as the wily survivor of a dramatic, year-long struggle by the opposition at home and its allies in Washington to unseat him and said it’s now time for direct negotiations with the United States to end the political stalemate.

• He suggested a bonanza could be waiting for U.S. oil companies in this country should President Trump lift sanctions and press the reset button on U.S.-Venezuelan relations.
• Yet if anything, his words revealed the vast gulf that still exists between his authoritarian government and the opposition and U.S. officials who call him a dictator. His positions on key issues suggested no quick fix to the brutal humanitarian crisis that has led millions to flee poverty and hunger in this troubled socialist state.  Speaking in the ornate Miraflores presidential palace, Maduro did not display such willingness.
• He called any new presidential vote still years away. He also denied the assertions of U.S. and European diplomats and opposition negotiators that his government offered the opposition a deal including new presidential elections during talks brokered by Norway last year before they collapsed in the fall. He doubled down on his pledge to hold legislative elections this year — a vote his opponents insist he would use as a tool to further consolidate power. Maduro said he remained willing to sit down with Guaidó — but he seemed to dismiss the opposition’s key demand: that he exit in favor of a transitional government that would renovate the Supreme Court and national election councils to call new elections.
• Maduro seemed to dismiss his growing international isolation. “Do you want me to tell you the truth?” he asked, leaning in. “I don’t care even a little bit about what Europe does, or about what the U.S. does. We do not care at all. We only care about what we do … No matter how many thousand sanctions, they won’t stop us, or Venezuela.”
• Maduro repeatedly asserted his view that Trump had been misled by his policymakers, and he seemed baffled that Trump had courted North Korea’s Kim Jong Un but not him. “I believe Mike Pompeo has failed in Venezuela and is responsible for Donald Trump’s failure in his policy toward our country,” Maduro said. “I think Pompeo lives in a fantasy. He’s not a man with his feet on earth. I think Trump has had terrible advisers on Venezuela. John Bolton, Mike Pompeo, Elliott Abrams have caused him to have a wrong vision.”

U.S. officials have been considering more provocative steps to oust Maduro, including a naval blockade of Venezuelan oil destined for Cuba. Maduro said such a step would be “illegal,” but stopped short of calling it an act of war. Still, Maduro said significant changes could be in the offing if Washington opened a direct channel with him. (The Washington Post: https://www.washingtonpost.com/world/the_americas/maduro-says-hes-still-in-control-of-venezuela-ready-for-direct-talks-with-the-united-states/2020/01/18/7f609a6e-38a7-11ea-a1ff-c48c1d59a4a1_story.html)

 

Maduro’s foreign minister in Iran, starts 3-day visit

The Maduro regime’s foreign minister Jorge Arreaza began a three-day visit to Iran and was received by his Iranian counterpart Mohammad Javad Zarif, Venezuela's foreign ministry reported on its @CancilleriaVE Twitter account on 20 January. The Venezuelan ministry posted photos of Arreaza and Zarif shaking hands and embracing, with the words: "To start the work agenda that will be developed in Tehran, the foreign minister of the Islamic Republic of Iran, Javad Zarif @JZarif receives the [Venezuelan] foreign minister Jorge Arreaza @jaarreaza to have a bilateral meeting". (BN Americas: https://www.bnamericas.com/en/news/venezuela-foreign-minister-in-iran-starts-3-day-visit)

 

Maduro calls for Cuban ambassador to gain access to Venezuelan ministries

Nicolas Maduro said on state television that the Cuban ambassador to Caracas should have access to all the country's ministries in order to coordinate efforts. “For the Cuban ambassador, the doors of all ministries should be open for coordination,” TASS quoted Maduro as saying. He also added that Cuba could “count on Venezuela in everything.” (Teller Report: http://www.tellerreport.com/news/2020-01-21---maduro-calls-for-cuban-ambassador-to-gain-access-to-venezuelan-ministries-.ByKaINAQWI.html)

 

Colombia’s leading opposition senator to sue Guaidó

One of Colombia’s leading opposition figures said he would file criminal charges against Venezuelan opposition leader Juan Guaidó for claiming he was “financed through Venezuelan corruption money.” During a surprise visit to Colombia, Guaidó additionally called Senator Gustavo Petro an “accomplice” of Nicolas Maduro. Petro responded that “I am neither an accomplice of dictators nor an accomplice of “Los Rastrojos,” a Colombian drug trafficking organization that allegedly helped Guaidó cross the border last year. (Colombia Reports: https://colombiareports.com/venezuelas-opposition-chief-calls-colombias-leading-opposition-senator-accomplice-of-maduro/)

 

Venezuela attorney added to ICE Most Wanted list

Venezuelan attorney and businessman, Raul Antonio De La Santisima Trinidad Gorrin Belisario, has been added to the US ICE Most Wanted list for conspiracy to violate the Foreign Corrupt Practices Act and several counts of money laundering. The action follows an indictment filed August 16, 2017, in the Southern District of Florida, Gorrin’s subsequent escape from justice, and the updated FinCEN advisory of May 3, 2019, regarding widespread public corruption in Venezuela. The indictment alleges that Gorrin, 50, a Venezuelan citizen with a residence in Miami, Florida, paid millions of dollars in bribes to two high-level Venezuelan officials to secure the rights to conduct foreign currency exchange transactions at favorable rates for the Venezuelan government. Gorrin was last seen in Caracas, Venezuela, and currently remains at-large. ICE warns the public to not attempt apprehending the subject. If you have information about the whereabouts of this fugitive, immediately contact your local U.S. Immigration and Customs Enforcement (ICE) office or call the national hotline at 1-866-DHS-2-ICE as soon as possible. (News Americas Now: https://www.newsamericasnow.com/latin-america-news-venezuela-news-usice-wanted/)

 

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.

October 08, 2019

International Trade

Passport maker De La Rue flies in turnaround specialist

De La Rue has appointed turnaround specialist Clive Vacher as chief executive as the banknote and passport maker contends with a series of setbacks. Vacher takes over immediately from Martin Sutherland, whose departure was announced after a May profit warning, but faces significant challenges alongside new chairman Kevin Loosemore. De La Rue’s share price has more than halved since the profit warning, with the company also taking a one-off hit for non-payment from Venezuela and an investigation led by Britain’s Serious Fraud Office. Vacher was previously CEO at semiconductor business Dynex Power and has held senior positions with industrials Pratt & Whitney, Rolls-Royce and General Dynamics. De La Rue is emphasizing Vacher’s credentials in business transformation and operational turnarounds, which may prick up the ears of all shareholders, said Russ Mould of investment broker AJ Bell, referring to activist investor Crystal Amber Fund. (Reuters, https://www.reuters.com/article/us-de-la-rue-ceo/passport-maker-de-la-rue-flies-in-turnaround-specialist-idUSKBN1WM0EG)

 

Oil & Energy

EXXON MOBIL bars use of oil tankers linked to Venezuela: sources

EXXON MOBIL Corp this week banned the use of vessels linked to oil flows from Venezuela in the last year, putting new pressure on the U.S. sanctioned country and on global crude freight rates. The decision by world’s largest publicly traded oil producer to ban the Venezuela-linked tankers should affect about 250 vessels. (Reuters, https://www.reuters.com/article/us-exxon-mobil-shipping-venezuela/exxon-mobil-bars-use-of-oil-tankers-linked-to-venezuela-sources-idUSKBN1WJ20E)

 

PDVSA flooding Cuba with stranded oil

At least three Venezuelan fuel tankers are heading towards Cuba, part of a flotilla meant to free up domestic storage space while defying a US campaign to cut off Venezuela's oil supply to its political ally. Up to 3mn bl of refined products and heavy crude that Venezuelan state-owned PDVSA is dispatching to Cuba in the first half of October should help partially alleviate a critical storage deficit that has forced down Venezuelan production toward 500,000 b/d. The storage shortage is a domino effect of US sanctions that are scaring away most buyers, with a few exceptions such as Russia's state controlled ROSNEFT and Spain's REPSOL that takes supply in exchange for its domestic production.  Although Venezuela has long supplied Cuba with oil under preferential terms, the wave of new shipments — equivalent to 200,000 b/d in the first half October — quadruple the volume that PDVSA had been delivering in recent months. Cuba has about 160,000 b/d of oil demand, with roughly 50,000 b/d covered by domestic production. The shipments should help the Cuban government to ease oil shortages that are crippling the island's transportation and electricity generation. But some are also likely to be resold, a PDVSA official said. (Argus: https://www.argusmedia.com/en/news/1989349-pdv-flooding-cuba-with-stranded-oil)

 

Brimming storage and no buyers: Venezuela’s oil production tanks

Venezuela’s oil production took another hit in recent days, as the country struggles with brimming storage tanks and no buyers. PDVSA slashed output in the Orinoco Belt to just 200,000 bpd, according to Bloomberg, after averaging roughly double that for much of this year. The lack of space in storage forced production cuts, including at joint venture projects, where output has been more stable. Sources told Bloomberg that the SINOVENSA blending facility would be idled for at least a week. Output had held up in recent months. While monthly totals bounce around from month to month, Venezuela’s production was stable at 750,000 bpd from April on. However, after months of relatively stable output, production began to slide again in August, falling to 712,000 bpd, according to OPEC’s secondary sources. Venezuela may now be on the verge of another decline. According to Bloomberg, the country only exported 495,000 bpd in September, and in the last week production fell to 510,000 bpd following the temporary shutdown of upstream heavy oil operations. Worse, the industry is in disrepair. Widespread pillaging, a worker exodus, lack of equipment, and a lack of capital plague oil operations. Luis Pacheco, who sits on the PDVSA board appointed by Guaidó, estimates that the industry needs US$ 120 billion in order to turn things around. There is almost no chance of even a faction of that without a change in the political context. (Oil Price: https://oilprice.com/Energy/Crude-Oil/Brimming-Storage-And-No-Buyers-Venezuelas-Oil-Production-Tanks.html)

 

Venezuela detains local head of oil joint venture with China: sources

Venezuelan authorities have arrested the president and two other officials in a corruption investigation at state oil company PDVSA’s SINOVENSA joint venture with China National Petroleum Corp (CNPC), oil sector and intelligence sources said on Saturday. The three detainees, in the latest round-up in the struggling and graft-plagued oil sector, are Venezuelan. The detention of SINOVENSA President Alberto Bockh in eastern Anzoátegui state on Thursday was confirmed to Reuters by five PDVSA sources, an intelligence source and another person in the local oil sector familiar with the case. It was unclear what the precise accusations were against him and the other two detained SINOVENSA employees. (Reuters, https://www.reuters.com/article/us-venezuela-oil/venezuela-detains-local-head-of-oil-joint-venture-with-china-sources-idUSKCN1WK0F5)

 

Oil-rich Venezuela and Russia come to aid of ally Cuba, but its energy woes persist

A flotilla of shipments from Venezuela gave Cuba some respite this week from crippling fuel shortages in the wake of tougher U.S. sanctions, while Russia’s prime minister pledged during a visit to the island on Friday to help develop its energy sector. But support from two of its closest allies looks unlikely to resolve Cuba’s energy problems and the government has extended many of the energy-saving measures it had introduced over the past month. Havana warned on Sept. 11 it had not secured enough shipments of refined fuels, such as gasoline and diesel, for the rest of the month due to sanctions imposed by the administration of U.S. President Donald Trump in retaliation for its support for Nicolas Maduro. In response to the shortages, Cuba swiftly deepened austerity measures it had introduced since an economic meltdown in Venezuela, its principal supplier, choked off its energy imports. (Reuters, https://www.reuters.com/article/us-cuba-economy-analysis/oil-rich-venezuela-and-russia-come-to-aid-of-ally-cuba-but-its-energy-woes-persist-idUSKBN1WJ2GS)

 

Inside Look at Venezuela’s Oil Belt

Five decades ago, Venezuela pumped 3.7 million barrels of oil a day. Now, it’s only producing a little over 700,000 barrels a day. Bloomberg’s Jessica Summers and Lucia Kassai discuss the collapse of the nation’s oil industry, the theft that goes on at Orinoco field, the lack of security and what it will take for a recovery. (Bloomberg, https://www.bloomberg.com/news/audio/2019-10-04/this-week-in-commodities-inside-look-at-venezuela-s-oil-belt)

 

Economy & Finance

ADOBE Is cutting off users in Venezuela due to US sanctions

ADOBE is shutting down service for users in Venezuela in order to comply with a US executive order issued in August that prohibits trade with the country. The company sent out an email to customers in Venezuela today to let them know their accounts would be deactivated and posted a support document further explaining the decision. In the document, Adobe explains: “The U.S. Government issued Executive Order 13884, the practical effect of which is to prohibit almost all transactions and services between U.S. companies, entities, and individuals in Venezuela. To remain compliant with this order, ADOBE is deactivating all accounts in Venezuela.” Users will have until October 28th to download any content stored in their accounts and will lose access the next day. To make matters worse, customers won’t be able to receive refunds for any purchases or outstanding subscriptions, as ADOBE says that the executive order calls for “the cessation of all activity with the entities including no sales, service, support, refunds, credits, etc.” The news is not only disastrous to designers and freelancers who rely on the company’s software like PHOTOSHOP and ILLUSTRATOR, but to NGOs and media outlets that will no longer be able to use software like INDESIGN, ACROBAT, and READER. The ban will also affect all free services like BEHANCE, ADOBE’s portfolio site, which requires a Creative Cloud account. It’s an unfortunate situation that highlights a downside of ADOBE’s subscription-based model — users lose access to the company’s products immediately as soon as the option to pay for them is removed, no matter how long they’ve been a customer. ADOBE says it’ll continue to monitor the US sanctions for more developments, but until then, accounts will remain deactivated. (Financial Times: https://www.ft.com/content/0c6ddd44-e95d-11e9-a240-3b065ef5fc55: The Verge: https://www.theverge.com/2019/10/7/20904030/adobe-venezuela-photoshop-behance-us-sanctions)

 

Maduro’s top envoy to Japan blasts freeze of bank accounts

The Maduro regime's ambassador to Japan rebuked a Japanese bank for effectively freezing his and other diplomats' accounts out of concerns that their use ran afoul of U.S. economic sanctions recently imposed on the country. The accounts, frozen since September, concern five with SMBC Trust Bank belonging to the ambassador, his wife and other diplomats. Ishikawa said that the accounts could not be used for Internet banking as well as withdrawing and transferring money via ATMs. In response to his inquiry, a bank official told Ishikawa that the accounts were frozen as a result of economic sanctions by the Trump administration against Nicolas Maduro’s regime. A senior official with the bank's Hiroo branch later visited the embassy and explained that their dollar accounts were frozen because of concerns that certain transactions ran against President Donald Trump's executive order signed Aug. 5. Ishikawa is a second-generation Japanese Venezuelan born to Japanese parents. His wife is Japanese, and they have four children with Japanese nationality. A bank official notified Ishikawa on Oct. 3 that his yen account would be reactivated, but not his U.S. dollar account. (The Asahi Shimbum: http://www.asahi.com/ajw/articles/AJ201910070027.html)

 

Politics and International Affairs

Russia boosts military ties with Maduro

Russia’s deputy prime minister Yuri Borisov met with Venezuela’s embattled incumbent Nicolas Maduro in Caracas on Saturday as the two countries boosted their military ties in Moscow’s apparent sign of continued support for the embattled dictator who is resisting an intense Western pressure to quit. The meeting between Borisov and Maduro was held in the framework of the high-level intergovernmental commission (CIAN) between Caracas and Moscow, Russia’s official news agency reported. Maduro thanked Russia for the military cooperation between the two countries, saying his nation had a solid defense grid to resist any outside aggression. He said that the two sides also renewed their agreements on the military-technical area during the meeting between the leaders. He also indicated that the two countries have made progress in advancing agreements on the exploration of oil and gas. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2484158&CategoryId=10717; Reuters, https://www.reuters.com/article/us-russia-venezuela/russian-deputy-prime-minister-in-venezuela-to-support-maduro-idUSKCN1WK0CF; https://www.reuters.com/article/russia-venezuela/russian-deputy-pm-to-meet-venezuelas-maduro-interfax-idUSL5N26Q0D8)

 

Venezuelans Find Medical Refuge in Colombia

The Arauca pier is already busy before sunrise. Hundreds of people arrive in boats from Venezuela to get medical attention, and to be sure they do, they must be among the earliest to stand in the long lines that quickly begin to form. One of the first buildings they come across in the city, which is the capital of Arauca province and is only separated from Venezuela by the swiftly flowing Arauca River, is that of the Colombian Red Cross. From 4:00 am, when the humidity and heat of the area are not yet so fierce, dozens of people, many with babies in their arms, line up outside the medical center waiting for the doors to open at 7:00 am with hopes of being among the 120 to be assigned their turn. Some have cardiac problems, others suffer respiratory illnesses and there are also pregnant women who, despite their pain, know that this is the only way to get good medical care. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2484150&CategoryId=10717)

 

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.

September 10, 2019

International Trade

115,811 tons of bulk cargo have been offloaded at Puerto Cabello from the BOSPHORUS PRINCE and BULKTEC, including 58,677 tons of soy paste, plus 32,000 tons from MV EUROSKY, and over 30,000 tons of White corn aboard the WESTERN LUCREZIA, according to the local port authority. The port also reports receiving 4,952 tons of goods from the AS FABIANA, CFS PALAMEDES, PERITO MORENO, MAERSK WISMAR, MV VICTORIA, CONTSHIP RAY, NIKOLAS and AS ANGELINA. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=43637)

 

Oil & Energy

Iran, Venezuela supply cut tightens heavy oil market

India's NAYARA Energy Ltd, part-owned by a consortium led by Russian oil major ROSNEFT, is scouting for ultra-heavy oil amid tightening supply following U.S. sanctions against Iran and Venezuela, its vice-president said on Tuesday. "Iran and Venezuela have taken 3.5 million barrels per day (bpd) out of the market," said Ashutosh S Deshpande, referring to the impact of sanctions restricting supplies from those countries. (The Economic Times: https://economictimes.indiatimes.com/industry/energy/oil-gas/nayara-says-iran-venezuela-supply-cut-tightens-heavy-oil-market/articleshow/71062313.cms)

 

Economy & Finance

The Bank of Spain denies being used by Caracas to move money

The Bank of Spain denied being used by the Government of Venezuela as a tool to move its money, as published by the Bloomberg agency, which accused Caracas of using the Spanish central bank to avoid the sanctions that prevent it access to commercial banking services. "The account referred to in the news only allows transfers to be made with origin and destination at the Central Bank of Venezuela. It has been open for years and is one of the accounts that several central banks have opened at the Bank of Spain," Bank of Spain sources explained. According to the sources consulted, the account balance is "relatively small" and "had no significant variation in the last year" "Basically, it is being used to pay the usual operating expenses of diplomatic relations between the two countries and by supranational organizations to send funds to their offices in Venezuela, since they cannot use the commercial banking channel," they add from the Bank of Spain. On September 9, Bloomberg published that President Nicolás Maduro "had found an ally in the Bank of Spain" after "an increasing number of banks around the world refused to move their money." It added that: Venezuelan central bank officials are telling contractors that going through the Bank of Spain is an option to make and receive payments outside of the country, while warning that it may still take at least a month to clear transactions due to increased scrutiny, one of the people said.(MBS News: https://www.mbs.news/2019/09/the-bank-of-spain-denies-being-used-by-caracas-to-move-money.html; Bloomberg, https://www.bloomberg.com/news/articles/2019-09-09/maduro-regime-is-moving-its-money-through-spain-s-central-bank)

 

Maduro regime tries to reinstate price controls

Nicolás Maduro has issued orders to his economic affairs authorities to return to price controls in “concert” with agribusiness and agriculture. Ricardo Cusanno, who heads FEDECAMARAS, the nation’s largest business organization, warned the move would only bring about increased scarcity. More in Spanish: (El Universal, http://www.eluniversal.com/economia/50214/gobierno-anuncia-regreso-al-control-de-precios-en-el-pais)

 

Venezuela’s Central Bank withdrew the PETRO as an accounting unit from its portal

The Central Bank of Venezuela (BCV) decided to withdraw the Petro’s contribution as an accounting unit from its portal. In this regard, the economist and academic of the Metropolitan University Luis Oliveros told CRIPTONOTICIAS: “PETRO as an accounting unit does not exist. It was something that never existed. It was an attempt at something from the government and, as usual, it didn’t work.” He added that “without an attack on the fiscal disaster, there is no way out of hyperinflation.” The exclusion of the contribution of this asset issued by the government of Venezuela on the BCV portal has generated expectations regarding a possible wage increase, which currently stands at Bs. 40,000, which implies that this buys less than 0.00025 BTC. (Our Bit Coin News: https://ourbitcoinnews.com/venezuelas-central-bank-withdrew-petro-as-an-accounting-unit-from-its-portal/); and more in Spanish: El Nacional, https://www.elnacional.com/economia/bcv-retiro-de-su-portal-al-petro-como-unidad-contable/)

 

Politics and International Affairs

Colombia to tell UN that Venezuela harbors terrorists

A reportedly leaked Venezuelan intelligence report indicates that Nicolás Maduro's socialist regime is harboring Colombian rebels inside Venezuela, allegations that dovetail with evidence Colombian officials say they will present this month to the United Nations. Bogota-based SEMANA magazine on Sunday published a report that it said was based on Venezuelan documents showing how a top military official under instructions from Maduro ordered generals to provide support to a so-called "Red Group" at "training zones" inside Venezuela. The allegations come against the backdrop of rising tensions between the two countries after Colombian President Ivan Duque accused Maduro of providing safe haven to the former chief negotiator of the Revolutionary Armed Forces of Colombia, or FARC, who announced he was rearming. One of the alleged documents, dated Aug. 9, is signed by Adm. Remigio Ceballos, the second highest-ranking Venezuelan military officer, and directed to regional military commanders. In that document, relaying what he said are direct instructions from Maduro, Ceballos orders his subordinates to avoid entering into conflict with a so-called "Red Group at training zones" inside Venezuela. He also instructs members of the national guard in four states to provide training and logistical support to the rebels. According to the report, "Red Group" is a code word used by Venezuelan security forces to describe guerrillas from the National Liberation Army and FARC, both of which are classified as a terrorist organization by the U.S. and European Union. Ceballos posted a message on Twitter saying the documents presented by SEMANA were a falsification. Maduro's minister of communications, Jorge Rodriguez, appeared on Venezuelan state TV alleging the supposedly leaked documents were fakes. But Foreign Minister Carlos Trujillo said the news report coincides with information his government has collected showing that Maduro has repeatedly violated a U.N. Security Council resolution from 2001 banning support for terror groups. He said Duque will present the evidence when he addresses U.N. General Assembly this month. "The Maduro regime now favors and protects terrorist organizations from its territory so they can commit crimes against Colombia," Trujillo said in an interview Monday. The allegations triggered Maduro to deploy anti-aircraft missiles and order military exercises along Venezuela's western border with Colombia that are set to begin on Tuesday. Overall, Colombian authorities estimate as many as 1,000 ELN rebels — or around 40% of the group's fighting force — operate from Venezuela, where they plan attacks like the January car bombing at a Bogota police academy that killed more than 20 mostly young cadets. (AP: https://news.yahoo.com/colombia-tell-un-venezuela-harbors-135944485.html)

 

Maduro convenes Defense Council to address Colombia’s ‘war-mongering’ behavior

Nicolas Maduro has convened a National Defense Council to discuss Colombia’s alleged attempts to send terrorists and turncoat officers to Venezuela to disrupt its military infrastructure. In a televised address on Monday, Maduro pulled no punches as he went on yet another verbal offensive against Colombia and its president, Ivan Duque, accusing his government of plotting attacks on public infrastructure, as well as on civilian and military sites. Maduro further insisted that he has evidence to support his claims about Colombia’s nefarious plans to topple his government and impose Venezuela’s interim president Juan Guaido. Maduro said that that the Colombian authorities have been responsible for a total of 42 acts of aggression against Venezuela over the past three months. Some of these were aimed at undermining Venezuela’s missile defense shield and radar systems. In order to infiltrate the country’s defense infrastructure, Colombia allegedly recruited Venezuelan army officers, who, Maduro claimed, are “selling their nation.” Last week, Maduro declared an "orange alert” over a Colombian threat and deployed missile defenses to the border. He also raised the alarm over a potential false-flag attack that could be used by Duque as a pretext to start a full-fledged armed conflict and enlist support from the international community. Earlier that week, Venezuela presented satellite images purporting to show ‘terrorist’ training camps on Colombia’s territory. The Venezuelan military will begin a two-week series of exercises today along the Colombian border. Though the rhetoric is bellicose, the exercises are not infrequent– these are the third such drills this year. The Maduro regime is likely posturing and attempting to show that it still has support from and control over the country’s military, a key source of power. (RT: https://www.rt.com/news/468459-venezuela-defense-council-colombia/; Foreign Brief: https://www.foreignbrief.com/daily-news/venezuelas-to-hold-military-drills-in-border-regions-amid-tensions-with-colombia/)

 

Maduro may push anti-Trump petition at UN, US believes

Nicolas Maduro may present a petition against US President Donald Trump at the United Nations despite opposition charges that the signatures have been gathered through threats to withhold food aid, US diplomats say. Maduro, who remains in charge in Venezuela despite a half-year US-backed effort to remove him, has not yet announced if he will head to New York for the annual UN General Assembly later this month. "Our diplomats have been hearing that Maduro plans to present a petition against President Trump, signed by millions of Venezuelans, at UNGA, if he actually attends," a US official said. The Maduro government has been gathering signatures among Venezuelans as part of its "No More Trump" campaign. But the opposition says that the Maduro government has gathered the signatures through extortion over desperately needed nutritional assistance. Videos recently posted showed what appeared to be Venezuelans refusing orders to sign in exchange for receiving the aid, known locally as a CLAP box. The US State Department described Maduro's effort as a "starvation petition" and said it was evidence that he could not win a fair election. (France24: https://www.france24.com/en/20190909-venezuela-s-maduro-may-push-anti-trump-petition-at-un-us-believes)

 

Washington pushes EU for tougher sanctions on Venezuela

President Donald Trump’s envoy on Venezuela has attacked the EU as “unhelpful” and guilty of “miscalculation” over its failure to impose tougher sanctions on Nicolás Maduro’s regime.  Elliott Abrams urged the 28-member European bloc to crack down on figures linked to the regime in Caracas who were using the continent as a “kind of resort area” to buy property, bank money and go clubbing.  Mr. Abrams’ remarks during a visit to Brussels on Monday underscore the growing pressure Washington is exerting on the Europeans to help unseat Maduro’s regime, which it accuses of corruption and fomenting a humanitarian crisis.  “The Europeans are making a real miscalculation here,” Mr. Abrams warned at an event hosted by The German Marshall Fund of the United States, arguing that imposing additional Venezuela sanctions could “push the regime towards compromise”. “We do think the reluctance on the part of the EU has been unhelpful.” “A far greater number of people from the regime are now using Europe as a kind of resort area: they send their families here, their wives, their mistresses and their children, their bank accounts are here,” Mr. Abrams said. “We have repeated information about the mansions they buy, the nightclubbing of their teenage children. That should not be happening.” An EU spokesperson said the bloc would “continue to work with all the relevant actors in the region and the international community to support a peaceful and truly Venezuelan-owned solution to the crisis”. The spokesperson added that any additional sanctions would be against individuals only and targeted to avoid any harm to the wider population. Josep Borrell, the EUs new foreign policy chief set to take office in November, has expressed frustration to aides over failed efforts to build a consensus in the bloc over the recognition of Juan Guaidó as interim president. Instead, some states — including Spain — have offered recognition, while others have withheld it. (Financial Times: https://www.ft.com/content/efb62bce-d260-11e9-a0bd-ab8ec6435630)

 

Guaidó to ask OAS to call out Rio Treaty against the Maduro regime

An emissary of Venezuela’s interim president Juan Guaidó in Washington said Monday that he's garnered an 11-nation majority to impose measures aimed at ousting Maduro under the 19-member Inter-American Treaty of Reciprocal Assistance, a defense pact that could provide political cover for greater international involvement in Venezuela's crisis. Venezuela's opposition-run National Assembly led by Guaidó approved the country's return to the treaty in July, and Gustavo Tarre, Guaidó's representative to the Organization of American States, said signatory members will vote Wednesday to call for a minister-level conference so they can assess available options in the coming days. (Foreign Brief: https://www.foreignbrief.com/daily-news/venezuelas-to-hold-military-drills-in-border-regions-amid-tensions-with-colombia/)

 

Rubio supports steps taken to invoke Rio Treaty in support of Venezuela

U.S. Senator Marco Rubio (R-FL) today issued a statement following the announcement that the Organization of American States (OAS) has begun the process of invoking the Inter-American Treaty of Reciprocal Assistance, also known as the Rio Treaty, in support of the restoration of democratic order and the rule of law in Venezuela. The measure comes following Interim President’s Juan Guaidó’s request that the democratically elected National Assembly approve Venezuela’s return to the Inter-American Treaty. “I welcome the OAS’s intention to invoke the Rio Treaty to counter the Maduro regime’s menace. It is time for all of the democracies in the region to stand in support of the Venezuelan people and denounce any attack by the Maduro regime as an attack against all members. I applaud the leadership of U.S. Ambassador to the OAS Carlos Trujillo and Venezuelan Ambassador to the OAS Gustavo Tarre Briceño, who have tirelessly worked in support of the cause of freedom from tyranny in Venezuela.” Rubio is Chairman of the Senate Foreign Relations Subcommittee on the Western Hemisphere. (Rubio:

https://www.rubio.senate.gov/public/index.cfm?p=Press-Releases&id=8A86CFAD-F318-49B1-AAA7-583E80963C80)

 

Killings, torture still going on in Venezuela: U.N. rights chief

The United Nations’ chief human rights official said Monday that millions of Venezuelans continue to suffer rights violations, including dozens of possible extrajudicial killings carried out by a special police force. Non-governmental organizations report that the Special Action police force carried out 57 suspected extrajudicial killings in July alone within Caracas, Michelle Bachelet said in an oral presentation on Venezuela to the U.N. Human Rights Council in Geneva. Bachelet’s latest presentation followed a scathing written report issued in early July that drew a government backlash. It found a “pattern of torture” under the regime of Nicolás Maduro and citing violations like arbitrary detention, extrajudicial killings, sexual violence and enforced disappearances. Bachelet’s latest presentation, which also received pushback from powerful figures in Maduro’s government, noted some areas of progress, while pointing to more cases of human rights violations and declining conditions as more than 4 million Venezuelan have fled a country beset by hyperinflation that leaves monthly minimum wages equal to US$ 2. While Bachelet said she had called for officials to dismantle the feared Special Action police force, the unit has actually received ongoing support from the highest levels of the government, she said. Bachelet raised concern that groups that collaborated with her in the earlier report have since come under criticism and threats by senior officials. “Reprisals for having cooperated with the United Nations are unacceptable,” she said. “I urge the authorities to take preventative measures.” The only way to overcome Venezuela’s human rights crisis is for Maduro’s government and the opposition led by National Assembly President Juan Guaidó to return to negotiations overseen by Norway, Bachelet said, and renewed her offer to support all such efforts. Some Latin American countries and activists are urging the Geneva forum, whose 47 members include Venezuela, to establish a U.N. Commission of Inquiry on Venezuela at the three-week session. (The Washington Post: https://www.washingtonpost.com/world/the_americas/un-human-rights-chief-cites-continued-abuses-in-venezuela/2019/09/09/7d00fbe2-d321-11e9-8924-1db7dac797fb_story.html; VOA: https://www.voanews.com/americas/un-human-rights-chief-cites-continued-abuses-venezuela; Daily Mail: https://www.dailymail.co.uk/news/article-7446781/Nicolas-Maduros-death-squads-executed-57-people-just-one-month-Venezuela.html; Reuters: https://www.reuters.com/article/us-venezuela-security-un/killings-torture-still-going-on-in-venezuela-u-n-rights-chief-idUSKCN1VU1IB)

 

Venezuela opposition parties back Guaido as congress chief in 2020

Venezuelan lawmakers from small opposition parties on Friday said Juan Guaido should continue as head of congress in 2020, waiving their option to lead the legislature under an informal agreement to rotate leadership between parties. The announcement ended speculation of an opposition rift over the 2020 legislative term, which under a 2016 agreement within the opposition would have fallen to a group of 17 small parties. Guaido in January declared President Nicolas Maduro a usurper and assumed a rival interim presidency that has been recognized by more than 50 countries, and the opposition is keen for him to remain in the post. (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-opposition-parties-back-guaido-as-congress-chief-in-2020-idUSKCN1VR2FS)

 

Maduro rejects talks with opposition over alleged envoy's remarks

President Nicolás Maduro says that he won't resume talks with the opposition until it rejects alleged calls by a top supporter in Britain to "drop the topic" of Venezuela's longstanding claims to an oil-rich part of neighboring Guyana.

Maduro's comments late Friday came after his chief prosecutor opened an investigation against Vanessa Neumann, the top envoy in London for opposition leader Juan Guaidó, who is recognized as Venezuela's rightful president by the U.S., United Kingdom and four dozen other nations. But Maduro last month broke off the talks taking place on the Caribbean island of Barbados over the opposition's support for tougher U.S. sanctions to punish companies from third countries that do business in Venezuela. Both Guaidó and Neumann have dismissed the claim as false. (Bloomberg, https://www.bloomberg.com/news/articles/2019-09-07/maduro-rejects-talks-with-opposition-over-envoy-s-remarks)

 

Russian diplomat claims US undoubtedly pulling strings to form a Guaido government

The decision by Venezuelan opposition leader Juan Guaido to form his own government is another ploy to legitimize dual power in the country and create a pseudo-legal reality, Russian Foreign Ministry Spokeswoman Maria Zakharova said on Wednesday. "We see this decision as another dangerous endeavor to legitimize dual power and create a pseudo-legal reality that leads to the further polarization of Venezuelan society, and delays the search for a compromise solution, which Venezuela needs so much in order to improve the humanitarian situation and return to the path of sustainable development. There is no doubt as to who orchestrated Guaido’s statement," she specified. According to Zakharova, that was predictable, given the fact that many of Guaido’s so-called ministers had long been on the payroll *of organizations sponsored by US NGOs. (TASS: https://tass.com/politics/1076433)

 

5.5 magnitude earthquake in Venezuela

A 5.5 magnitude earthquake occurred 18 kilometers from the town of Araya, near the coast of Venezuela. No injuries or damages were reported as a result of the quake. Shock waves were observed at a depth of just 5.9 kilometers in the sea, more than 200 kilometers from Caracas. (Novinite: https://www.novinite.com/articles/200052/5.5+Magnitude+Earthquake+in+Venezuela)

 

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