November 06th, 2012

Economics & Finance

Chávez says Venezuela's foreign indebtedness is only 25% of GDP, and points out that US foreign indebtedness is 300%. More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/chávez-deuda-externa-venezuela-apenas-llega-al-25-sobre-producto-interno-bruto)

"Public and private enterprises working jointly are one way to build socialism", according to President Chavez, who added: "Venezuelan socialism includes all: professionals, media, businessmen. Do not listen to those crying wolf, I call upon all to work with us as many already are." More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/quottrabajo-conjunto-entre-empresa-pública-y-privada-es-una-vía-para-construcción-del-soci)

SITME transactions rose by 56%, as CADIVI operations remain stagnant

According to the Síntesis Financiera publication, CADIVI approved U$D 22.9 in foreign exchange operations, only 4.6% above the same time frame in 2011; wile SITME approved U$D 6.8 billion, rising by 56%. This trend indicates imports are moving toward the SITME system, which uses VEB 5.30 to the U$D as a reference. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/56-subieron-aprobaciones-de-divisas-por-medio-del-sitme)

Formal employment slowing down in Venezuela, according to the Labor Situation Report for Latin America and the Caribbean, prepared jointly by the UN Commission for Latin America and the International Labor Organization. The report shows a slight drop in formal employment during the first half of 2012. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/reportan-desaceleracion-de-empleos-formales-en-el-pais)

Commodities

Gasoline imports from the US jump to 34,000 bpd in August

Data released by the US Department of Energy shows that Venezuela purchased gasoline made in the US consistently from December 2011 through August 2012. March was the only exception. Most recent information from August this year, indicates that the US dispatched 34,000 gasoline barrels per day to Venezuela in that month. It was the highest figure since February 2003, when Venezuela imported 36,000 barrels of gasoline from the US amid a temporary halt in the operations of the oil industry caused by a national civic strike. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelas-gasoline-imports-from-the-us-jumps-to-34000-bpd-in-august)

Fuel imports from Colombia rose by 91% this year, according to Colombia's National Statistics Department (DANE), which indicates Venezuela imported U$D 402.5 million in fuel this year, and are the top trade item between both countries.  Venezuela also imported U$D 214 million in animal stock and related products, and U$D 199 million in chemicals. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/aumento-91-compra-de-combustibles-a-colombia)

PDVSA also comes up empty off Cuba

A well drilled by state oil giant PDVSA in Cuban waters of the Gulf of Mexico also has turned up dry, the Communist-ruled island’s official media reported Friday. This latest well, drilled with the Chinese-built Scarabeo 9 rig, “offers no possibility for commercial development,” the press reported Friday, citing a statement by Cuban state oil firm CUBAPETROLEO. (Latin American Herald Tribune, 11-02-2012; http://www.laht.com/article.asp?ArticleId=626006&CategoryId=10717;

Veneconomy, 11-04-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32656&idc=4)

TNK-BP production up in Venezuela

Russian energy company TNK-BP said oil production from its joint venture in Venezuela increased 18% during the first nine months of the year. PETROMONAGAS, a joint venture between TNK-BP and Venezuelan state energy company Petroleos de Venezuela, or PDVSA, was 35.5 million barrels through September, an 18% increase from the same time last year. Boris Zilbermints, a vice president for international projects at TNK-BP, said Venezuela is key to the company's overseas portfolio. (UPI, 11-01-2012; http://www.upi.com/Business_News/Energy-Resources/2012/11/01/TNK-BP-production-up-in-Venezuela/UPI-48151351768587/)

Aluminum industry operates at 29% capacity

Primary aluminum output in Guayana, south Venezuela, continues to dwindle. Aluminum makers Venalum and CVG Alcasa comprise 1,301 cells, yet only 387 cells are operative. Both companies are running at 29% of their installed capacity. Operating problems are due to unsolved shortages of spare parts and raw material. Moreover, nearly 40% of personnel is absent amid poor transportation. In CVG Alcasa, low availability of cranes is accountable for production decline. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelas-aluminum-industry-operates-at-29-of-capacity)

Steel and cement to be imported by "socialist" builders, says Gerson Hernández, head of the Bolivarian Construction Chamber, who indicated housing projects for next year require additional inputs. He indicated negotiations are under way to import 180 thousand metric tons of steel and 100 thousand metric tons of cement from countries such as Argentina, Perú and Italy. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/las-constructoras-socialistas-importaran-acero-y-cemento; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/camara-bolivariana-de-constructores-preve-edificar.aspx)

Agricultural imports rose 99.6% in one year, according to the National Statistics Institute (INE), which indicated purchases abroad in these items rose to U$D 2.533 billion during the first semester this year, up from U$D 1.269 billion during the first semester 2011. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/importaciones-del-sector-agricola-crecieron-996-en-un-ano; El Nacional; http://www.el-nacional.com/)

International Trade

"MERCOSUR is a way to increase trade with Northern Brazil", according to President Chavez, who says the area has a population above 60 million, and "of incalculable potential for trade and the development of Venezuela and Brazil". More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/misión-mercosur-amplía-perspectivas-crecimiento-países-región)

Imports from Colombia up 70% in January-August

Venezuela-Colombia bilateral trade has been reactivated, clearly benefiting Colombian entrepreneurs in view of the rapid rise of sales to Venezuela. Data handled by the National Administrative Statistics Department of Colombia (DANE) shows that from January through August this year, Venezuela purchased U$D 1.77 billion in goods from Colombia, that is, 70% above the figure recorded during the same period in 2011 (U$D 1.04 billion). Meanwhile, Venezuelan exports to Colombia are growing at a much slower pace, reporting only a 12.3% increase from January through August 2012. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelan-imports-from-colombia-up-70-in-january-august)

Logistics & Transport

Incoming cargo processing can take 20 to 30 days due to excessive controls, according to Cipriana Ramos, president of Fedecámaras in Vargas state. She said controls applied by CADIVI, SENIAT, sanitary authorities, the National Guard, Customs and the Agriculture Health Institute also bring on added cost. She says that at La Guaira Port the waiting period can go up to around 30 days. More in Spanish: (Notitarde, 11-06-2012; http://www.notitarde.com/La-Costa/Excesivos-controles-portuarios/2012/11/05/143854; El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/37990/arribo-masivo-de-cargas-graneleras--a-puerto-cabello-agudiza-retrasos)

Politics

A victory by Obama or Romney will not bring change in bilateral relations, says President Chavez who also saluted the Sandinista victory in municipal elections in Nicaragua. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/internacional/121106/para-chavez-victoria-de-obama-o-romney-no-traera-cambios)

July 20th, 2012

Economics & Finance

Venezuelan economy to contract 3.5% after elections in 2013, after expansion during elections

Guest economists attending the FEDECÁMARAS Annual Meeting estimate that after the October 7 presidential elections spending dynamics “obviously driven by the elections” will post a significant reduction. They warn this drop will continue in 2013 and will result in an important deceleration of the economy. The Ministry for Planning and Finance projects annual expansion of 7% this year, closing around 7% for this quarter, led by construction, trade, manufacturing and finance. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31347&idc=2; more in Spanish: El Mundo, 07-19-2012, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/cifras-preliminares--muestran-un-alto-crecimiento-.aspx)

Government has used up 90% of authorized credit for this year, according to a report by the Ministry of Planning and Finance which shows 90% of the originally authorized indebtedness, VEB 56.3 billion out of VEB 62.9 billion had been used by July 13th. More in Spanish: (El Universal, 07-20-2012; http://www.eluniversal.com/economia/120720/gobierno-ha-colocado-90-de-la-deuda-prevista-para-este-ano)

Non-oil exports hit 60-year low

Non-oil private exports this year will end at a record low, according to Francisco Mendoza, a former president of the Venezuelan Association of Exporters (AVEX), who says: "This year we will go under the floor of less than U$D 1 billion in exports, which had not happened in Venezuela since the 1960's". The activity continues to decline due to serious obstacles faced by Venezuelan domestic manufacturers. "The outlook is pretty gloomy; competitiveness is becoming increasingly complex due to recently enacted laws, the situation (of delays) in ports, and the shortage of foreign exchange." (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120718/venezuelan-non-oil-exports-hit-60-year-low)

Private investment-to-GDP-ratio may be boosted to 20%

Jorge Botti, President of the Federation of Trade and Industry Chambers (FEDECÁMARAS), says it is possible to raise the private investment-to-GDP-ratio to 20%. He says that since the 1970's private investment in Venezuela has fallen steadily. "Private investment in Peru and Colombia exceeds 20%. Under similar circumstances, we could raise the production capacity of industries," Botti said during the 68th General Assembly of Fedecámaras. (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120717/businesspeople-private-investment-to-gdp-ratio-may-be-boosted-to-20)

Venezuela has the least transparent budget in Latin America, according to the Latin American Index for Budgetary Transparency (ILTP). Costa Rica, Ecuador and Mexico have the most transparent budgets in the region. More in Spanish: (Notitarde, 07-20-2012; http://www.notitarde.com/notitarde/plantillas/notitarde/inota.aspx?idart=1699736&idcat=9845&tipo=2)

Commodities

PDVSA, CHEVRON reach U$D 2 billion financing deal

State oil company PDVSA says it has reached an agreement with CHEVRON to secure U$D 2 billion in financing to boost oil production at PETROBOSCAN, a joint venture between the two companies. Since the end of 2010, the Energy Ministry has been pressuring some 20 joint ventures between PDVSA and foreign energy partners to find extra funding to raise output. The socialist administration of President Hugo Chavez has threatened to cancel the ventures' permits if they fail to hike production. PDVSA said CHEVRON would provide the funds to PETROBOSCAN at a rate of Libor plus 4.5%, and the last payment would be made in 2025. The agreement includes preliminary accords to make outstanding payments to PETROBOSCAN, PDVSA said. (Reuters, http://www.reuters.com/article/2012/07/18/us-venezuela-chevron-idUSBRE86H1MT20120718; The Washington Post, http://www.washingtonpost.com/business/industries/venezuelas-oil-company-says-chevron-corp-plans-to-invest-2-billion-in-boscan-oil-field/2012/07/18/gJQAD2wduW_story.html; Fox Business, http://www.foxbusiness.com/news/2012/07/18/venezuela-pdvsa-terms-finalized-with-chevron-for-2-billion-financing-deal/)

RUSORO adds another action against Venezuela at the ICSID

Russian-Canadian mining company RUSORO has filed a request for arbitration against the Bolivarian Republic of Venezuela following the nationalization of RUSORO's assets in the country, a move that has resulted in significant loss, according to the firm. The company commenced the arbitration at the International Centre for Settlement of Investment Disputes (ICSID), despite Venezuela's withdrawal from the organization, where the country faces a dozen lawsuits for up to U$D 45 billion. According to workers at RUSORO, production there has dropped since the government´s takeover. (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120718/rusoro-adds-another-action-against-venezuela-at-the-icsid; Reuters; http://www.reuters.com/article/2012/07/18/venezuela-rusoro-idUSL2E8II1SA20120718; and more in Spanish: El Universal, 07-20-2012; http://www.eluniversal.com/economia/120720/tras-nacionalizacion-decayo-produccion-aurifera-de-rusoro)

The coke is still there: According to Víctor Hernández, from Anzoátegui’s Engineers’ Association (CIANZ), coordination to withdraw the coke from the Jose premises has been a total “disaster.” Displaying evidence, he said that in May 2012, PDVSA ended the contracts signed with Cuferca and TYC to handle and export the residues from the yards of the José Antonio Anzoátegui Industrial Complex and reassigned it to Energy Coal, which has also done nothing. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31346&idc=4)

PDVSA sells more to Latin America than the U.S.

The yearly statistical report by the Organization of Petroleum Exporting Countries (OPEC) released this week said that Venezuela's oil exports to Latin America exceeded shipments to the United States last year. The data provided by OPEC, based on information provided by the Ministry of Petroleum and Mining indicate that exports in 2011 were on average 2.3 million barrels per day and the volume (just over 1 million barrels per day) were sent to Latin American countries. More in Spanish: (El Nacional, 07-19-2012; http://www.el-nacional.com/)

Agricultural product imports rose 105.4% in 5 months for a total over U$D 2.14 billion, according to official statistics from the Institute for National Statistics. This is double the amount imported for these products during the same time frame last year. Rice imports rose by 435.8%, for 423,493.67 tons. More in Spanish: (El Nacional, 07-20-2012; http://www.el-nacional.com/)

Logistics & Transport

Minister Elsa Gutierrez announced a new dock at the Port of Guanta

The Minister for Air and Water Transport, and President of National Port Authority (BOLIPUERTOS), CA. Elsa Gutierrez, announced the construction of a seventh pier at the marine terminal, for PDVSA machinery. She said:

"The pier will be 34 meters wide and will work primarily to facilitate the import of machinery for the growth of the oil industry in the east". More in Spanish: (Bolipuertos, 07-19-2012, http://www.bolipuertos.gob.ve/noticia.aspx?id=5712)

Politics

Chávez leads most polls, PREDIGMÁTICA gives Capriles a 4% lead

Two and a half months into the presidential elections, incumbent candidate Hugo Chávez leads the polls, according to Datanálisis (15.3 points ahead) and Hinterlaces (17 points ahead) but his health evolution, the elevated number of undecided voters or opposition candidate Henrique Capriles’ campaign could alter this situation, according to analysts. The PREDIGMATICA polling firm says results of a more recent June study of 1,600 polled reflects support for Henrique Capriles at 47.7% and President Chavez at 43.7%. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31360&idc=1 and more in Spanish: Últimas Noticias, 07-20-2012; http://www.ultimasnoticias.com.ve/noticias/tuvoto/noticiaselectorales/predigmatica-pone-a-capriles-radonski-4-puntos-por.aspx)

Venezuela condemns Syria bombing, warns against intervention

Venezuela condemned the bombing in Damascus that killed the Syrian defense minister and President Bashar al-Assad's brother-in-law, urging foreign powers against military intervention. Socialist President Hugo Chavez has helped undermine sanctions against Syria by shipping diesel fuel to the embattled country, and has described the conflict there as an international conspiracy backed by Western powers. (Reuters, 07-18-2012; http://www.reuters.com/article/2012/07/19/syria-bombing-venezuela-idUSL2E8IJ0YB20120719)

May 22th, 2012

Economics & Finance

Liquid reserves estimated at U$D 1.6 billion

Liquid reserves at the Central Bank - reserves immediately available for imports and debt repayment - are shrinking rapidly. After a reduction of 17% year to date, total national reserves now stand at U$D 25.495 billion, the lowest point since 2007. However, since most of that amount is in gold bars, a report by the SINTESIS FINANCIERA research firm shows that disposable or liquid reserves are only U$D 1.6 billion which "would cover only ten days of imports". More in Spanish: (El Universal, 05-22-2012; http://www.eluniversal.com/economia/120522/caen-hasta-1600-millones-las-reservas-liquidas-del-bcv)

Public debt grows uncontrolled, Central Bank director says it must be reined in

The Finance Ministry reports that domestic public debt closed 2011 at U$D 34.690 billion, a jump of 62.2% over U$D 26.838 billion at the close of 2010. Foreign debt came to U$D 39.909 billion, that is 7.8% over U$D 37.35 billion the year before. Armando León, a director at Venezuela´s Central Bank says "At this time the debt is manageable but last year's growth pattern should not be replicated, we should not resemble other countries that are in crisis". León estimates imports will grow 35% this year and considers a drop in 6.9% food production during the first quarter 2012 to be "alarming". More in Spanish: (Tal Cual, 05-22-2102; http://www.talcualdigital.com/index.html and El Universal; http://www.eluniversal.com/economia/120522/armando-leon-considera-que-hay-que-frenar-el-aumento-de-la-deuda)

Agricultural imports rose 375%

Official figures on the National Statistics Institute web page show agricultural, vegetable and animal imports were above U$D 10 billion during the first quarter 2012, which is 375% above the same period last year. Beef and other animal products have had the most significant growth. More in Spanish: (El Nacional, 05-22-2012; http://www.el-nacional.com/)

Government says foreign deposits increase to U$D 40 billion

Balance of payments information released by the Central Bank (BCV) at the end of the first quarter shows that government financial authorities have cut authorizations of US dollars for private sector imports, while increasing foreign deposits and public debt. The government raised foreign deposits by U$D 4.13 billion to U$D 40.97 billion.

The BCV claimed overseas accounts have swollen due to "to increased deposits held by the National Development Fund (FONDEN), the investment funds backed by Chinese loans, and the deposits held by monetary authorities and state-run companies." (El Universal, 05-21-2012; http://www.eluniversal.com/economia/120521/venezuelas-foreign-deposits-increase-to-usd-40-billion)

Non-oil exports fall 8% in the first quarter

Venezuela would be the poorest country in the hemisphere -positions currently held by Haiti- were it not for oil. In the first quarter 2012, non-oil exports amounted to U$D 1.04 billion. This is 8% lower than that in the first quarter of 2011, and it would cover only 7.9% of the imports necessary to meet everyday demand of other kinds of products.

The official numbers highlight the failure of the government policy to reduce dependence on oil. (El Universal, 05-21-2012; http://www.eluniversal.com/economia/120521/non-oil-exports-fall-8-in-the-first-quarter)

Commodities

US Department of Energy projects Venezuela's 2012 oil revenue at U$D 63 billion

The pace of Venezuelan oil income for 2012 is similar to that recorded last year, according to estimates by the US Energy Information Administration, and data released by the Organization of the Petroleum Exporting Countries (OPEC). In a report released last week, the US Department of Energy said that between January and April 2011, Venezuela received U$D 21 billion from oil exports. If this trend continues unchanged, Venezuelan oil revenues would amount to USD 63 billion by the end of 2012. The report also shows that between January and April Venezuela s oil revenue per capita would amount to U$D 764. (El Universal, 05-21-2012; http://www.eluniversal.com/economia/120521/venezuelas-oil-revenue-in-2012-amount-to-usd-21-billion)

ECOPETROL's profit 85% more than PDVSA's in 2011, Colombia displaces Venezuela in world attention

Colombia´s state owned firm ECOPETROL had profits 85% more than Venezuela's PDVSA in 2011, according to a comparative study by ECOANALITICA research firm. Although PDVSA's 2011 income was U$D 124.7 billion versus ECOPETROL'S U$D 30.4 billion, profits showed reverse results: PDVSA made only U$D 4.4 billion due to fund transfers to the government, and ECOPETROL made a net U$D 8.3 billion. Concurrently, Colombia is displacing Venezuela in the attention of world forums and markets because, according to expert Roger Tissot: "Venezuela is the more attractive country for its oil production potential and has the largest heavy oil reserves in the world, such as the Orinoco belt, but has had the worst economic performance in the region by high inflation, the high unemployment and policies to attract capital away". More in Spanish: (El Nacional, 05-22-2012; http://www.el-nacional.com/)

Colombia says will increase natgas flow to Venezuela

Colombia said on Friday it would send 50% more natural gas this year to neighboring Venezuela, which has yet to start producing the fuel commercially despite huge reserves. Colombia currently exports about 200 million cubic feet (mcf) of natural gas per day to Venezuela, but Energy Minister Mauricio Cardenas said that would rise to 300 mcf in September. "The supply of Colombian gas to Venezuela is going to increase, as will the flow of Venezuelan fuel to Colombia," Cardenas said during a meeting of energy officials in Caracas. (Reuters, 05-18-2012; http://www.reuters.com/article/2012/05/19/energy-colombia-venezuela-idUSL1E8GJ14O20120519; Fox Business, http://www.foxbusiness.com/news/2012/05/18/colombia-to-boost-natural-gas-supplies-to-venezuela-official/)

Venezuela sends third diesel shipment to Syria

Venezuela has sent a third shipment of diesel to Syria, the energy minister said on Friday, underscoring President Hugo Chavez's support of the Middle East country despite its intensified crackdown on protesters. Earlier this year, Venezuela's government said it had sent at least two shipments of fuel to Syria, potentially undermining Western sanctions as a rare supplier to the increasingly isolated regime of President Bashar al-Assad. A lawmaker from Chavez's socialist party said in March that another shipment was being prepared and Energy Minister Rafael Ramirez confirmed that it had been sent. (Reuters, 05-18-2012; http://www.reuters.com/article/2012/05/18/venezuela-syria-idUSL1E8GIJW720120518)

Politics

Chavez sets no date for registering candidacy

President Hugo Chavez placed a telephone call to a United Socialist Party meeting during which he said no date has yet been set to present his candidacy for reelection to the National Elections Board:"We have not set a date yet, it will be between the 1st and 11th of June". He had previously said he will no longer act as "a runaway horse", due to health problems, but said he will take over the reins of his reelection campaign after the 1st of July. "I have to accept it. I confess to the country that unfortunately I will no longer be the runaway horse you used to see around. Now, I am on a diet, work eight hours a day, and ask God to give me the strength of the buffalo rather than that of the horse." (El Universal, 05-19-2012; http://www.eluniversal.com/nacional-y-politica/120519/chavez-says-he-will-no-longer-be-a-runaway-horse; Reuters, http://www.reuters.com/article/2012/05/19/venezuela-chavez-idUSL1E8GIKJ420120519; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=507898&CategoryId=10717) and more in Spanish: (Tal Cual; http://www.talcualdigital.com/index.html)

...and says he will not respond to Uribe's accusations

During the same telephone conversation, Chavez said he will not respond to former Colombian President Álvaro Uribe Velez who accused him of supporting Colombia´s FARC guerrillas; but he did accuse Uribe of endangering regional peace toward the end of his administration. More in Spanish: (El Universal, 05-22-2012; http://www.eluniversal.com/internacional/120522/chavez-descarta-responder-a-las-acusaciones-de-uribe)

Road connecting Venezuela and Brazil closed for 96 hours

Trunk Road 10 that connects Venezuela with Brazil was blocked for 96 hours by a demonstration staged by indigenous miners of the Ikabarú community, in the Gran Sabana municipality, south the state of Bolívar. The blockade started on Thursday morning and demonstrators are still waiting for a response from Venezuelan authorities. Demonstrators are rejecting alleged abuses by National Guard troops who burnt a camp, equipments and attacked miners. The road blockade near the Wará Bridge, a few yards from the entrance of Santa Elena de Uairén town, restricted car traffic on the international road. (El Universal, 05-21-2012; http://www.eluniversal.com/economia/120521/road-connecting-venezuela-and-brazil-closed-for-96-hours)





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.