Venezuela

Nations to Challenge Venezuela’s Authoritarian Regime

23 Mar 2017   Venezuela

The U.S., Canada and Latin America’s leading nations have agreed to challenge Venezuela’s authoritarian regime, a joint effort that wouldn’t have been possible a decade ago. Fourteen nations plan to issue a joint statement in coming days calling on the government of President Nicolás Maduro to release political prisoners, return full powers to the National Assembly and set a timetable to hold regional elections that…

Misery Seen From Space Too Much for This Venezuela Bonds Fan

21 Mar 2017   Venezuela

There are plenty of reasons why BlueBay Asset Management LLP cut its holding in Venezuelan bonds, from the empty shelves in the supermarkets of Caracas to a nationwide dearth of spare auto parts. But few were more compelling than the satellite photograph of Puerto Cabello on the Caribbean coast, home to the country’s biggest port, which shows a once-vibrant terminal bereft of vessels. “If you can see a country’s economic decline from space, you know it’s in big trouble,” said Graham Stock, the head of emerging-market sovereign research in London at BlueBay, which reduced its holdings of the nation’s debt to below-benchmark levels. He estimates Venezuela’s imports have declined by as much as 50 percent in the last two years. The investment company that manages $50 billion dismissed warning signs last year about Venezuela’s ailing economy and bought the country’s dollar debt, which returned about 50 percent in 2016, […]

PDVSA Said to Replace Refining Managers as Shakeup Deepens

21 Mar 2017   Venezuela

Venezuela’s state oil company is replacing high-level managers at refining complexes and other divisions as it deepens a shake-up that began in January, according to people with knowledge of the situation. Managers at several of Petroleos de Venezuela SA’s major refineries have been replaced in the past weeks, Ivan Freites, a union leader, said Monday in a telephone interview. Widespread staffing changes across PDVSA, as the company is known, were confirmed by another person who works with PDVSA but isn’t authorized to speak about the matter publicly. Officials at the company’s press office and energy ministry declined to comment. The managerial changes come months after Venezuelan President Nicolas Maduro added two board members and installed new executives at PDVSA, including a rear admiral. In January, Maduro gave the job of oil minister — a position that was formerly held by PDVSA President Eulogio Del Pino — to Nelson Martinez, […]

Exclusive: Venezuela’s cash-strapped PDVSA offers Rosneft oil stake

17 Mar 2017   Venezuela

Venezuelan state oil company PDVSA has offered Russian counterpart Rosneft a stake in a joint venture in the country’s Orinoco Belt extra-heavy crude area, five industry sources said, in a sign of the Latin American nation’s dire economic situation and Moscow’s growing muscle there. Rosneft ( ROSN.MM ), Russia’s top oil producer, has been offered a 10 percent stake in the Petropiar joint venture. PDVSA [PDVSA.UL] has a 70 percent share, and U.S. oil company Chevron Corp ( CVX.N ) holds 30 percent of the venture, which includes an oil field and a 210,000 barrel-per-day oil upgrader. Two sources said the offer was part of a larger package put to Rosneft as PDVSA seeks to raise money for major debts with providers and bond payments. It is unclear […]

Crucial Loans to Venezuela Are Held Up by Dispute With Congress

16 Mar 2017   Venezuela

The bitter political standoff between Venezuela’s government and opposition may have cost the crisis-torn country nearly half a billion dollars in loans from one of its last active multilateral lenders as a fourth year of recession grips the economy. The Development Bank of Latin America, or CAF, is said to be reconsidering whether to issue fresh loans to Venezuela — a principal member and home to its headquarters — due to a legal dispute between the National Assembly and the Supreme Court, according to three people with direct knowledge of the matter. As the government struggles to stock store shelves and make good on billions of dollars in bond payments, the opposition-controlled legislature has refused to approve a debt financing law for 2017.

Insisting that the National Assembly is in contempt, President Nicolas Maduro has sought budgetary approval from the Supreme Court, which he’s packed with his supporters. In response, Maduro’s opponents in the legislature have sent a stern warning: Any new debt approved without the Congress would be considered illegal and future governments would not be obligated to honor it.   With the world’s highest sovereign risk of default, Venezuela, which has depended on loans from China in recent years for liquidity, is finding it harder and harder to obtain financing as reserves tumble and debt service becomes more burdensome.

Venezuela threatens to seize bakeries amid bread shortage

16 Mar 2017   Venezuela

Venezuela’s government has threatened to seize control of bakeries that fail to implement regulations to combat bread shortages. President Nicolas Maduro said the government will expropriate industrial bakeries , which he blames for a “bread war” that has resulted in shortages of bread throughout the country. “They’re going to pay, I swear. Those responsible for the bread war are going to pay and they better not complain that it was a political persecution,” he said on Sunday, according to the BBC . He added “speculators who hide the bread from the people will face the weight of the law.” […]

Could Rosneft Take Control Of Citgo?

16 Mar 2017   Russia, USA, Venezuela

Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of Venezuela’s state-owned oil company, media are warning. PDVSA used the stake as collateral for a $1.5-billion loan provided by Rosneft last year, and the Russian company immediately filed a lien with the Delaware Department of State asserting its right to ownership in case PDVSA defaults on debt payments. Now, the possibility of a default has become more pronounced, spurring speculation about what might happen should this possibility turn into a certainty. The loan deal itself sparked protests in the U.S. energy industry, with ConocoPhillips and a Canadian miner, Crystallex, asking the federal court in Delaware to cancel the lien, even though the use of stock as collateral in loan agreements is standard practice. This time, however, there are geopolitical implications weighing in, and it’s these implications that will, in all likelihood, make the idea […]

Venezuela Alleges Fraud in $1.3 Billion Oil-Rig Lease

15 Mar 2017   Venezuela

The Venezuelan government is investigating alleged corruption in a $1.3 billion contract between the state oil company and a private contractor co-founded by a Saudi prince, according to law-enforcement officials and related documents. Venezuela’s inspector general’s office on March 6 recommended that the Public Prosecutor’s Office investigate and charge five current and former executives at Petróleos de Venezuela SA, or PdVSA, for allegedly embezzling public funds by paying inflated fees for the lease…

Oil-for-loan debts cost Venezuela’s PDVSA hard-won India market share

8 Mar 2017   Venezuela

Venezuela’s state-run oil company, PDVSA, has spent at least a decade trying to build business ties and boost shipments to refineries in India, where crowds once welcomed the late socialist leader Hugo Chavez with cries of “Viva!” Now, the ailing firm is being forced to slash sales to its crucial trade partner. Venezuela has given up the fight for coveted market share in India because of a combination of declining crude production and heavy obligations under oil-for-loan deals with China and Russia, according to internal PDVSA data and two people familiar with the company’s strategy and operations. (For a graphic on PDVSA’s falling market share in India click tmsnrt.rs/2lWvHcq ) Caracas needs the oil to pay debts to China and Russia, key political allies that have together lent […]

Venezuela deputy president defies US over drug sanction

15 Feb 2017   Venezuela

Tareck el-Aissami (L) was supported by President Maduro (R) on Tuesday The vice-president of Venezuela has accused the US of “imperialist aggression” after it slapped sanctions on him for allegedly trafficking drugs. Tareck el-Aissami was described by the US treasury as a drug “kingpin” who worked with traffickers in Mexico and Colombia to ship drugs to America. Hitting back, he accused the US of “defamatory aggression”. Venezuelan President Nicolas Maduro demanded a public apology from the US for sanctioning his new deputy. The sanctions freeze Mr Aissami’s assets in the US and bar him from entering the country. He is seen as a powerful figure within the governing party and has been entrusted by Mr Maduro with key powers normally held by the president, such as determining ministerial budgets and expropriating private companies. The US treasury accuses him of being in the pay of convicted Venezuelan drug lord Walid […]

US labels Venezuelan vice-president a drug kingpin

14 Feb 2017   Venezuela

The Trump administration has frozen millions of dollars in assets belonging to Tareck El Aissami, as it labelled Venezuela’s powerful vice-president an international drug trafficker. The US Treasury designated Mr El Aissami a drug kingpin for allegedly “playing a significant role in international narcotics trafficking”. The move came just one month after embattled Venezuelan president Nicolás Maduro tapped the former governor of Aragua state as his deputy and potential successor. Mr El Aissami has long denied any criminal ties. US officials said Mr El Aissami had facilitated multiple 1-tonne narcotic shipments to Mexico and the US from Venezuela. The Treasury also designated Samark López Bello — an international businessman described as his “primary frontman” — for acting on Mr El Aissami’s behalf. It also moved to block a 13-company network linked to Mr Lopez Bello or others in the US, the UK, Venezuela, Panama and the British Virgin Islands. John Smith, head of the Treasury’s Office of Foreign Assets Control, said the action was the “culmination of a multiyear investigation”. In the Miami area alone, the US froze real estate linked to Mr El Aissami that “can be measured in the tens of millions of dollars”, according to a US official. Frozen assets linked to Mr López Bello included waterfront property in Miami and a Gulfstream aircraft.

Venezuela falls behind on oil-for-loan deals with China, Russia

10 Feb 2017   Venezuela

Venezuela’s state-run oil company, PDVSA, has fallen months behind on shipments of crude and fuel under oil-for-loan deals with China and Russia, according to internal company documents reviewed by Reuters. The delayed shipments to such crucial political allies and trading partners – which together have extended Venezuela at least $55 billion (£43.9 billion) in credit – provide new insight into PDVSA’s operational failures and their crippling impact on the country’s unraveling socialist economy. Because oil accounts for almost all of Venezuela’s export revenue, PDVSA’s crisis extends to a citizenry suffering through triple-digit inflation and food shortages reminiscent of the waning days of the Soviet Union. ADVERTISING The total worth of the late cargoes to state-run Chinese and Russian firms is about $750 million, according to a […]

Maduro maintains oil supplies to Cuba despite Venezuelan shortages

7 Feb 2017   Cuba, Venezuela

The price of oil is half of what Venezuela needs to feed its citizens, who for the most part do not manage to eat them three times a day, but the regime of Nicolás Maduro continues to supply fuel faithfully to Cuba although it does not receive dollars for the barrels sent to the island, publishes  El Nuevo Herald .  “For Maduro is a priority, and we know from different sources, keep the volume to Cuba. They are not sparing their efforts to meet that goal and are doing everything they can to maintain that commitment to Havana, “former PDVSA manager Petróleos de Venezuela said from Miami.
It is a commitment that subtracts funds that are urgently needed to import food in Venezuela, where only 3 percent of the population is eating three times a day and 52 percent say they only eat once, according to recent surveys that illustrate The magnitude of the crisis in that country.

Data provided by oil expert Jorge Piñón, based on official PDVSA figures, show that the South American country supplies Cuba with the equivalent of 87,000 barrels per day of oil and derivatives with an estimated value of $ 1.467 million.  By 2016, it is estimated that the volume of crude shipped decreased slightly to the island in the midst of the severe Venezuelan crisis and the gradual fall in production in the country, but conservative estimates put the total crude oil and products close to 70,000 barrels a day Said Piñón, director of the University of Texas Energy Program in Latin America and the Caribbean.

PDVSA Braces for Oil Production Drop as Default Looms Large

2 Feb 2017   Venezuela

The recent bump in oil prices isn’t enough to help Petroleos de Venezuela SA as it faces its fourth consecutive year of declining production. The company’s crude output is expected to fall this year as it failed to raise cash for investments and after Venezuela agreed to cut 95,000 barrels a day for six months as part of a deal struck by the Organization of Petroleum Exporting Countries and other non-members to lift oil prices, analysts say. Even the recent increase in oil prices, following the cuts, aren’t enough to ease the company’s financial burden, Lucas Aristizabal, a senior director at Fitch Ratings, said. “Giving the tight liquidity, prices need to be significantly higher to revive output,” Aristizabal said in a phone interview from New York. “At least more than $100 to start with,” he said. Fitch reiterates that a default of PDVSA’s debt is “probable” amid lower production […]

Venezuelan Credit Dashboard: Default Risk Falls Below 50%

2 Feb 2017   Venezuela

Traders reduced their bets on a default of Venezuela’s dollar debt over the next year amid a thin repayment schedule in the first quarter. The implied probability of nonpayment over the next 12 months plunged to 44 percent in January from 59 percent at the end of December, according to credit-default swaps data compiled by Bloomberg. That’s the first time the risk of default has been below 50 percent since September. The longer-term outlook is still a little murky, with the odds of a credit event over the next five years at 89 percent. January proved to be a volatile month in Venezuelan politics as President Nicolas Maduro reshuffled his cabinet, named and delegated wide-ranging powers to a new vice president, replaced the head of the central bank and appointed a new board at state oil company Petroleos de Venezuela SA . That happened as officials continue to face […]

Venezuela’s Maduro seen bolstering grip on PDVSA after shake-up

31 Jan 2017   Venezuela

An oilfield worker walks next to pipelines at PDVSA’s Jose Antonio Anzoategui industrial complex in the state of Anzoategui, Venezuela, April 15, 2015. REUTERS/Carlos Garcia Rawlins/File Photo PDVSA’s new senior executive line-up includes a Venezuelan navy rear-admiral, Hugo Chavez’s former Twitter manager and a leader of the late leftist president’s failed 1992 coup. The selections, announced as part of a sweeping executive shakeup of Venezuela’s struggling state oil company on Sunday, suggest former President Chavez’s unpopular successor Nicolas Maduro is strengthening his grip on the enterprise that powers the OPEC country’s economy. Maduro said the overhaul was aimed at stamping out corruption at the company that oversees the world’s biggest oil reserves and has been linked to major bribery cases in the United States. PDVSA [PDVSA.UL] President Eulogio Del Pino, a Stanford-educated engineer, was kept on, but most of his top executives, several with long oil careers, were removed. […]

Venezuela Names New Leaders At Oil Firm PDVSA To ‘Defeat Corruption’

31 Jan 2017   Venezuela

Venezuela’s president creates an executive vice president post and names new vice presidents to lead PDVSA in what he described as a shake-up of the state oil company. CARACAS, Jan 29 (Reuters) – Venezuela’s president on Sunday created an executive vice president post and named new vice presidents to lead PDVSA in what he described as a shake-up of the state oil company and an effort to root out corruption in the OPEC nation’s principal industry. Venezuelan President Nicolas Maduro kept Eulogio Del Pino as PDVSA president but created a new post of executive vice president while naming vice presidents in areas including finance and exploration. PDVSA has been dogged for years by corruption ranging from lucrative smuggling of heavily subsidized fuel to kickbacks and bribery that led to prosecution of U.S.-based contractors who did business with the company. “We have to clean out the corruption that has incubated […]

Exclusive: Millions of barrels of Venezuelan oil stuck at sea in dirty tankers

27 Jan 2017   Venezuela

More than 4 million barrels of Venezuelan crude and fuels are sitting in tankers anchored in the Caribbean sea, unable to reach their final destination because state-run PDVSA cannot pay for hull cleaning, inspections, and other port services, according to internal documents and Reuters data. About a dozen tankers are being held back because the hulls have been soiled by crude, stemming from several oil leaks in the last year at key ports of Bajo Grande and Jose, which has resulted in delayed operations for loading and discharging. Since debt-laden PDVSA cannot afford to have the ships cleaned, they have to wait for weeks to navigate international waters, delaying shipments. Dirty tankers are the latest of a litany of problems weighing on PDVSA, the source of most of […]

Socialism, Not Oil, Is The Cause Of Venezuela’s Problems

21 Jan 2017   Venezuela

Venezuela’s economy has collapsed. Unfortunately, most people mistakenly believe Venezuela’s policies created a successful economy prior to the collapse in oil prices. The truth is that Venezuela’s socialist policies held back its economy during the oil boom and are the direct cause of its economic collapse today. Upon Hugo Chavez death in 2013, and before the collapse in oil prices, Salon published an article titled “Hugo Chavez’s Economic Miracle” that praised the success of his brand of socialism. Salon was far from alone. Numerous left-leaning pundits and celebrities, and even some very influential economists, have held up Venezuela as a rare example of a successful socialist economy. For example, in a 2007 speech sponsored by the Bank of Venezuela, Joseph Stiglitz — 2001 recipient of the Nobel Prize in Economic Sciences and former senior vice president and chief economist of the World Bank — claimed that “Venezuela’s economic growth […]

Operations at Venezuelan oil terminal halted by spill: sources

18 Jan 2017   Venezuela

Shipping operations at one of three docks of Venezuela’s main crude exporting port were halted after an oil spill occurred while loading a vessel bound for India, union and shipping sources told Reuters on Tuesday. The spill, which happened over the weekend at Jose port’s Eastern dock and whose size has not yet been disclosed, also affected other tankers close to the very large crude carrier (VLCC) Nave Quasar, chartered by India’s Reliance Industries, the sources said. “The tanker had loaded 10,000 barrels less than agreed so when trying to reconnect the crude line to fill the missing volume, the pressure was too high, breaking the end of the hose and spilling crude directly to the sea,” one of the sources said. Venezuelan state oil company PDVSA, which operates the terminal, did not immediately respond to a request for comment. Jose is Venezuela’s largest crude port. Most crude shipments […]

Venezuela’s Maduro on Trump: ‘He Won’t Be Worse Than Obama’

18 Jan 2017   Venezuela

Incoming U.S. President Donald Trump may have an unexpected ally: Venezuela’s socialist and much-criticized President Nicolas Maduro. Just days ahead of the inauguration in Washington, Maduro said he was taking a wait-and-see, but hopeful, stance toward the incoming president, while slamming the record of outgoing President Barack Obama. “There’s been a brutal hate campaign against Trump all over the world,” Maduro said late Monday at a news conference with OPEC Secretary-General Mohammad Barkindo in Caracas. “I say let’s wait and see. All I’ll say is that he won’t be worse than Obama.” Venezuela, the South American country with the world’s largest crude reserves, has long had an acrimonious relationship with the U.S., the biggest buyer of its oil. Late President Hugo Chavez famously once called former President George W. Bush “the devil” at a speech before the United Nations General Assembly. Tensions flared up again […]

Venezuela Issues New Bank Notes Because of Hyperinflation

17 Jan 2017   Venezuela

Venezuela ’s government began to issue new bank notes on Monday to replace the 100-bolívar bill, made virtually worthless by hyperinflation. President Nicolás Maduro announced early last month that new notes would be issued to replace the old ones, a measure that promised to lighten the load for many Venezuelans, who must carry around bags of cash for even the simplest transactions.

Venezuela debuts new banknotes amid soaring inflation

17 Jan 2017   Venezuela

Venezuelans are standing in long ATM lines to take out new, larger-denominated bills that President Nicolas Maduro hopes will help stabilize the crisis-wracked economy. Maduro last month said he was scrapping circulation of the most-used 100-bolivar note and replacing it with new bills ranging from 500 to 20,000 bolivars. Residents in Caracas expressed shock at seeing bills with so many zeros. But triple-digit inflation has destroyed many families’ purchasing power and even the largest of the new bills is worth less than $6 on the black market. Also on Monday, the government plans to inaugurate special foreign exchange houses near the border to stamp out the black market and attract badly needed hard currency from Colombian shoppers who frequently cross into Venezuela for bargain-hunting.

Venezuela will circulate new proposal next week to support oil prices

16 Jan 2017   OPEC, Venezuela

Venezuela’s President Nicolas Maduro holds speaks during his annual report of the state of the nation at the Supreme Court in Caracas, Venezuela January 15, 2017. REUTERS/Carlos Garcia Rawlins Venezuela will next week circulate a new proposal to crude producers in a bid to support oil prices, President Nicolas Maduro said on Sunday, without providing details. The Organization of the Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million barrels per day to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed to by independent producers such as Russia, Oman and Mexico. “Venezuela, as of next week, will circulate a letter with a new proposal, a new formula for the stability of real and just prices so that it can be studied and debated by all the governments that have signed this deal,” Maduro said in […]

Exclusive: Venezuela’s PDVSA sees 2017 oil output stuck near historic lows – document

14 Jan 2017   Venezuela

The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas, Venezuela January 11, 2017. REUTERS/Marco Bello Venezuelan state energy company PDVSA projects oil production will remain near 23-year lows in 2017, an internal document shows, suggesting more hardship ahead for the crisis-wrought OPEC member country. Cash-squeezed PDVSA, which accounts for nearly all of Venezuela’s export revenues and is the socialist government’s financial motor, saw production tumble by nearly 10 percent in 2016 due to an unraveling economy and low oil prices. The company’s weak finances are causing operational disruptions, and are both affected by and contributing to Venezuela’s economic downturn. Three years of recession and soaring prices have pummeled Venezuelans, with many skipping meals and lootings of supermarkets commonplace. Some economists have estimated that gross domestic product contracted by 10 percent or more in 2016. This year, PDVSA sees production at 2.501 […]

Venezuela arrests opposition lawmaker and critical general

13 Jan 2017   Venezuela

Venezuelan officials jailed a second opposition figure Thursday as tensions mounted in the economically struggling South American country. Officials re-arrested former Gen. Raul Baduel, saying he had been conspiring to overthrow the government. Baduel was once a high-ranking member of the administration of late President Hugo Chavez, but later became critical of the socialist party. Baduel was freed from prison in 2015 after serving six years on corruption charges. On Wednesday, officials arrested substitute lawmaker Gilber Caro from a hardline opposition party on weapons charges. The arrests come as a fledgling “anti-coup” unit inside the government targets what it calls renewed opposition attempts to destabilize the country. Human rights groups said the arrests go against the government’s recent freeing of several jailed activists as part of Vatican-sponsored mediation effort. The opposition is asking the government to free dozens of prisoners widely considered […]

Venezuela’s Oil Company Sued Over Latest Citgo Deal

7 Jan 2017   Venezuela

Petróleos de Venezuela SA is facing new legal action from North American multinationals over financial maneuvers they say are designed to shield the state-owned oil giant’s U.S. assets from seizure. Canadian mining company Crystallex International Corp. on Wednesday expanded an existing lawsuit in Delaware federal court against PdVSA, as the struggling national company is known. At issue is a loan transaction that PdVSA quietly undertook last month with Rosneft Trading SA, an affiliate of Russia’s state-owned oil company that was also named as a defendant. Lawyers for U.S. oil producer ConocoPhillips , another plaintiff suing PdVSA, also said on Wednesday that it would seek relief from the court. The two companies are seeking large awards from Venezuela in international arbitration tribunals over nationalizations carried out under the nation’s deceased president, Hugo Chávez. PdVSA, the major economic engine in recession-ravaged Venezuela, has drawn the companies’ ire by taking steps they […]

Venezuelan Leader Nicolás Maduro Shakes Up Cabinet

5 Jan 2017   Venezuela

President Nicolás Maduro reshuffled his cabinet Wednesday amid a deepening recession, appointing a state governor to the vice presidency and naming his sixth new economy minister in three years. In a surprise televised address, Mr. Maduro named Tarek El Aissami, governor of the central Aragua state, as his deputy. The governor takes the vice presidency amid a push by the opposition to oust Mr. Maduro through a recall referendum, which polls show the highly unpopular president would likely lose if it were to take place. Mr. El Aissami would assume the presidency if a referendum takes place and Mr. Maduro were to lose, although the proposed vote is tied up in courts amid government allegations that the opposition used fraudulent signatures in its petition. “Socialism is the way to cure the fatherland,” Mr. […]

Venezuelan Credit Dashboard: Next Big Payment Due in April

4 Jan 2017   Venezuela

Venezuela looks set to start 2017 with a somewhat quiet first quarter in terms of debt repayment, with only $1.1 billion due over the first three months of the year. A majority of that — $726 million — has to be paid back in February. The next big test is set for April, when nearly $3 billion comes due, and the market will be watching for any sign that might signal if either the government or state owned oil company PDVSA will attempt to try another swap operation to push out maturities. With the central government issuing new dollar debt for the first time since 2011 in late December, investors will be looking to see how the $5 billion of new notes are used. Despite promises of surprise announcements by President Nicolas Maduro, 2016 ended without any any significant changes to […]

Venezuela president extends date to use 100-bolivar bills

30 Dec 2016   Venezuela

President Nicolas Maduro has again extended the deadline for Venezuelans to stop using their old 100-bolivar bills. Maduro said in a television and radio broadcast address on Thursday that people now have until Jan. 20 to stop using the old bills. The decision comes almost two weeks after violent protests and looting erupted when an earlier date to stop using the old bills came and went before new bills to replace them were distributed. Government officials have blamed “sabotage” for the ongoing delay in the distribution of the new bills. Venezuela faces a severe economic crisis that includes galloping inflation and shortages of food, medicine and other goods.

Venezuela’s President Once Again Extends 100-Bolivar Note’s Deadline

30 Dec 2016   Venezuela

Venezuelan President Nicolás Maduro announced the extension for the 100-bolivar notes during a television program… CARACAS, Venezuela—President Nicolás Maduro has again extended the deadline for Venezuelans to stop using their old 100-bolivar bills, the second time Mr. Maduro has delayed plans to withdraw the nation’s most widely used bank note. Mr. Maduro said in a television and radio broadcast address on Thursday that people have until Jan. 20 to stop using the old bills. The decision comes almost two weeks after violent protests and looting erupted when an earlier date to stop using the old bills came and went before new bills to replace them were distributed. At that time, Mr. Maduro extended the note’s use to Jan. 2. Government officials have blamed “sabotage” for the continuing delay in the distribution of the new bills. Venezuela faces a severe economic crisis that includes galloping inflation and shortages of food, […]

In Venezuela, lynchings kill one person every three days: report

29 Dec 2016   Venezuela

Roughly one person is being lynched in crisis-ridden Venezuela every three days as frustrated residents take revenge on suspected criminals, a monitoring group said on Wednesday. The Venezuelan Observatory of Violence (OVV), which monitors crime, said mob killings have become a generalized phenomenon across the country, with 126 deaths reported in 2016 versus 20 last year. “Due to being repeated victims of crime for more than a decade, and the feeling of not being protected, many people have decided to take justice into their own hands,” the OVV said in its latest annual report. In the past, it said, lynchings […]

Cuba says economy shrank this year in tandem with Venezuela crisis

28 Dec 2016   Cuba, Venezuela

Containers are seen at the Mariel port in Artemisa province, Cuba January 5, 2016. Cuba’s economy shrank 0.9 percent this year in tandem with the crisis in its key trading partner Venezuela, President Raul Castro told the National Assembly on Tuesday in a closed-door speech, predicting a slightly brighter outlook for 2017. The figure suggests the economy contracted sharply in the second half after the cash-strapped government drastically cut imports, investment and fuel in response to lower exports and a drop in cheap oil deliveries from Venezuela. It had reported 1 percent growth for the first half. “Restrictions in cash and in the provision of fuel worsened in the second half,” Castro said, according to excerpts published by official media outlet Cubadebate. “Financial tensions and challenges that might intensify again in certain circumstances will persist, but we hope that gross domestic product will grow moderately, by around 2 percent […]

Venezuela says to cut 95,000 bpd crude output in OPEC deal

28 Dec 2016   Venezuela

Venezuela said on Tuesday it will cut 95,000 barrels-per-day of oil production in the New Year in fulfillment of a producers’ deal to reduce global output and strengthen prices. Jan. 1 is the official start of the pact by the Organization of the Petroleum Exporting Countries and several non-OPEC producers to lower production by almost 1.8 million bpd. “Without prejudicing its international contractual obligations, from Jan. 1 2017, (state oil company) PDVSA and/or its subsidiaries will implement a reduction in the volumes of its main crude sale contracts, all in conformity with existing terms and conditions,” the Energy Ministry said. Venezuela, a price hawk within OPEC and one of the nations worst affected by the fall in crude revenue since mid-2014, currently produces just over 2.4 million […]

Venezuela is lurching closer and closer to chaos

27 Dec 2016   Venezuela

VENEZUELA, WHICH was once Latin America’s richest country, has become an unwilling test site for how much economic and social stress a modern nation can tolerate before it descends into pure anarchy. This month its 31 million people lurched a big step closer to that breaking point, thanks to another senseless decree by its autocratic populist government. For years Venezuelans have struggled with mounting shortages of food, medicine and other consumer goods, as well as triple-digit inflation that has rendered the national currency, the bolivar, worthless. By this month the 100-bolivar bill, the largest note in circulation, was worth only 2 cents, forcing people to carry piles of them in order to make the most rudimentary purchases. Then came this coup: On Dec. 11, President Nicolás Maduro, an economically illiterate former bus driver, […]

THE WORST IS YET TO COME! Crisis Group anticipates rising discontent and social upheaval in 2017

23 Dec 2016   Venezuela

The non-governmental organization The International Crisis Group warns in a report that Venezuela could enter a dangerous period of great turmoil after the worsening economic catastrophe and the decision of the government of Nicolás Maduro to prevent any type of electoral process in the country, publishes Sumarium  Given this scenario, the organization anticipates an increase in discontent and social upheaval after the failure of the dialogue process between the government and the opposition sponsored by the Vatican and asserts that “to restore the rule of law and avoid further suffering, an agreement with The opposition is essential and can only be achieved with international aid. ”  “With two years of his mandate still remaining … President Maduro and his ministers seem unable to prevent the economic collapse and an even deeper humanitarian crisis,” the report reads.  Also, he predicts that Nicolás Maduro will complete his mandate would have to pay a very high social cost, as the process of sharp economic contraction started in 2014 shows no signs of stopping and the country continues to increase its rate of inflation.

Secrecy And Confusion Surround Venezuela’s Latest Oil Deals

22 Dec 2016   Venezuela

Venezuela’s newly created and military run oil and mining company Camimpeg has formed a joint venture with UK-based Southern Procurement Services (SPS) to reactivate shut-in wells in Lake Maracaibo in Zulia state. The deal has raised eyebrows, given its scale and the relative inexperience of the parties involved. A source with knowledge of developments and who has operations in the lake told NewsBase the well count could approach 1,500. Given their lack of experience, questions have been asked about whether the JV partners have the requisite personnel or capital to pull off the work. Indeed, the fact the companies have even been allowed to team up is startling. SPS and Camimpeg, which was created in February to protect petroleum installations belonging to state-run PDVSA, recently formed Camimpeg-SPS to “improve the oil and gas production process for PDVSA,” the JV tweeted last week. In the most recent of only three […]

Venezuela Deploys Troops After Weekend Riots

21 Dec 2016   Venezuela

A member of the Venezuelan army stands in front of commercial properties after looting erupted… PUERTO ORDAZ, Venezuela—President Nicolás Maduro’s government deployed 3,000 troops to the southeastern state of Bolivar on Monday after people desperate over the government’s elimination of much of the country’s currency looted stores and homes over the weekend. The unrest took an especially heavy toll on Chinese immigrants, who own many of the grocery stores in the capital, Ciudad Bolívar, and nearby towns. “Everything was left in ruin,” said Juan Carlos Ho, standing next to the China Cham supermarket in the town of Sifontes, which had been left gutted. “They took the stands, the carts, all of the merchandise, which was a lot, and the air conditioners.” China, a key economic ally, on Monday called on Venezuela to protect Chinese immigrants and their property. “China is very concerned about the development of the situation in […]

Venezuela’s Maduro to tour oil-producing nations

20 Dec 2016   Venezuela

Venezuela’s President Nicolas Maduro speaks during a meeting with ministers at Miraflores Palace in Caracas, Venezuela December 17, 2016. Miraflores Palace/Handout via Venezuelan President Nicolas Maduro said he would soon embark on a tour of oil-producing nations to support the Organization of the Petroleum Exporting Countries’ recent agreement to shore up prices with an output cut. “We reached an historic accord,” Maduro said late on Sunday. “In the next few days, I will go to the oil nations and leave everything ready for a consensus formula for market stability and the fixing of prices for the next 10 years.” Maduro, whose nation is a price hawk and has been one of the worst affected by the fall in crude revenue since mid-2014, gave no further details of his agenda or plans. OPEC, of which Venezuela is a member, last month finalized a plan to cut output by about 1.20 […]

Venezuelans Protest Over Worthless Cash

17 Dec 2016   Venezuela

MARACAIBO, Venezuela—Desperate and cashless Venezuelans, angry that the government hasn’t exchanged their voided bank notes as officials had pledged, on Friday rose up in protest with some scattered looting of stores. National Guard troops were deployed to put down the unrest that broke out as far west as this large city near the Colombian border and in smaller towns in the east. With only nine days to go before Christmas, Venezuelans grappling with a collapsing economy and soaring inflation are left without money after President Nicolás Maduro in a sudden move this week banned the 100-bolivar note, the country’s largest denomination. Only the Central Bank now accepts the remaining bills—and only until Tuesday. “Maduro is making a mockery of the people, and he has destroyed Christmas for all Venezuelans,” said Desiré Chávez, a 33-year-old clothing vendor in Maracaibo who had accepted the 100-bolivar notes until Thursday. “Now I don’t […]

Venezuela’s 100-bolivar note withdrawal causes chaos

17 Dec 2016   Venezuela

Venezuela’s highest denomination banknote has ceased to be legal tender, in a move that has caused cash chaos and long queues at banks this week. Some cash machines on Thursday were still issuing the old 100-bolivar notes, hours before they expired. President Nicolas Maduro said new higher-denomination bills would be fully distributed in January. He has closed the borders with Brazil and Colombia until Sunday to stop “mafias” hoarding the currency abroad. Venezuelans have been seen lining up outside banks after they were given 72 hours to exchange the 100-bolivar note for new larger denomination notes and coins. The 100-bolivar note is worth just two US cents on the black market. Some people on Thursday still received the 100-bolivar notes when they withdrew money at ATMs, then immediately had to queue up again to re-deposit the soon-to-expire notes. “I don’t get the joke,” office worker Yarelis Carrero, who lives […]

Threat of hyperinflation haunts Venezuela

16 Dec 2016   Venezuela

Long queues continued to form outside banks across the Venezuelan capital Caracas on the day President Nicolás Maduro was set to do away with smaller denomination bank notes, amid mounting evidence the country had entered a dangerous hyperinflation spiral.  The embattled president shocked Venezuela four days ago when he announced plans to scrap the 100 bolívar bill that makes up about half of all the country’s currency, but which has become increasingly worthless in an economy where annual inflation is forecast to top 1,600 per cent next year.  The plan, which the government insists is necessary to fight currency hoarders and counter an “economic war”, is to replace the old money with new high denomination notes, including 10,000 and 20,000 bolívar bills, but as of Thursday they had yet to come into circulation.

Cuba and Venezuela’s Ties of Solidarity Fray

15 Dec 2016   Cuba, Venezuela

Fidel Castro and Hugo Chávez proclaimed a decade ago that they presided over a single country, combining Cuba’s educated workforce with Venezuela’s oil wealth to challenge U.S. power across Latin America. Now Mr. Castro is gone , three years after Mr. Chávez’s death, and the union between their two countries, while still strong on paper, is withering away fast. Daily shipments of more than 100,000 barrels of subsidized Venezuelan oil, the lifeblood of Cuba’s economy, have dropped by more than half since 2013, according to oil traders and Cuban refinery workers. In November, Cuba had to buy oil on the open market for the first time in 12 years, because of Venezuela’s plummeting output. Meanwhile, thousands of Cuban doctors who toiled in Venezuelan shantytowns to pay off the oil deliveries are quietly returning […]

Venezuelans Rush to Banks to Exchange Bills During Crackdown on Contraband

14 Dec 2016   Venezuela

Venezuelans desperately rushed to banks Tuesday to dump cash after the government announced it is eliminating the largest bank note in circulation to combat contraband in a country whipsawed by the world’s deepest recession and highest inflation. In the financial district of downtown Caracas, National Guard troops toting assault rifles stood outside banks as crowds of people lined up to deposit stacks of 100-bolivar bills that President Nicolás Maduro said Monday would become void on Wednesday. In the provinces, which have fewer banks, the situation was chaotic, with sporadic fighting breaking out among residents waiting as early as 5 a.m. in lines that stretched up to four blocks. The 100-bolivar bills is worth just 3 U.S. cents on the black market. “I’m fainting here, from heat and from rage,” said Yesenia Delgado, a 33- […]

Desperate to dump soon-worthless cash, Venezuelans flock to banks

14 Dec 2016   Venezuela

Lining up from dawn with backpacks and plastic bags full of cash, Venezuelans flocked to banks across the nation on Tuesday to ditch 100-bolivar bills after President Nicolas Maduro’s surprise move to pull them from circulation. Soldiers watched as people jostled in lines clutching Venezuela’s largest denomination bill – now worth just 3 U.S. cents on the streets – which they have to deposit before it becomes officially worthless. Maduro announced the measure on Sunday, to the consternation of Venezuelans who have become accustomed to stashing large volumes of cash at home as the bolivar currency’s value has plunged in the crisis-hit OPEC nation. Many businesses stopped receiving them immediately. Accused by critics of taking a nonsensical and rushed measure, Maduro, 54, justified it as an attempt to outwit international mafias, especially on the Colombian border, hoarding bolivars for contraband. “To the people of Venezuela, especially pensioners, drivers, […]

The Venezuelan Crisis Continues To Spiral Out Of Control

13 Dec 2016   Venezuela

Venezuela’s economic, humanitarian and political crisis has not shown any sign of improving since the opposition and the government started “the dialogue” mediated by the Vatican and UNASUR. The crisis has worsened due to a lack of political will from the government, which has been reflected by unfulfilled promises. Just to mention one, the release of political prisoners. Every-day life has become a challenge due to the worst economic and political crisis in Venezuela’s republican history; becoming one the world’s worst economies, with rising crime and corruption rates, daily power blackouts and medicine and food shortages (of more than 80 percent). The struggle to get even the most basic lifesaving supplies such as antibiotics, is forcing the socialist government to finally recognize the crisis; accepting medical donations from the United Nations Organization. The last published inflation figures from the Venezuelan government were in December 2015, stating it at only […]

China suitor tightens grip on Curacao oil project

13 Dec 2016   China, Venezuela

China’s Guangdong Zhenrong Energy Co will submit a plan by April to revamp a century-old oil refinery in Curacao, as it seeks to secure a $5.5 billion project that will give China a foothold in the Caribbean’s second-largest oil refinery. Guangdong Zhenrong, a commodity trader with strong backing from Beijing, signed a binding framework pact with Curacao’s government on Nov. 19, Chen Bingyan, the firm’s director and chief negotiator for the venture, told Reuters, moving past a memorandum of understanding in September. If the deal goes ahead, the Chinese firm would replace Venezuela’s cash-strapped state oil firm PDVSA as operator of the 335,000 barrels per day (bpd) Isla refinery, tightening its grip on Venezuela’s oil industry. China already takes about a quarter of Venezuela’s exports, while its top […]

Oil Minister: Venezuela Has Left 500,000 Bpd Output Out Of OPEC Deal

8 Dec 2016   Venezuela

Venezuela – one of the OPEC deal’s staunchest promoters and supporters – produces around 500,000 barrels per day of heavy oil, and this figure has been left out of the agreement, Venezuelan oil minister Eulogio del Pino told Russia’s TASS news agency on Wednesday. As part of the OPEC deal reached last week, Venezuela is pledging to cut 95,000 bpd from its production level – as OPEC named it a ‘reference production level’ – of 2.067 million bpd. (Click to enlarge) Now Venezuela’s oil minister admitted there are some difficulties in estimating each OPEC member’s production and reference output level based on the so-called secondary sources. “We are in favor of taking these sources into account. For us, this question concerns oil production in the oil belt of the Orinoco River, which has heavy oil that needs to be upgraded through special capacities – around 500,000 […]

Venezuela’s Maduro Praises The OPEC Deal, But How Good Is It Really? | OilPrice.com

7 Dec 2016   OPEC, Venezuela

Nicolas Maduro, the Socialist president of recession-hit and hyperinflation-stifled Venezuela, was the most vocal supporter and promoter of an OPEC deal to reduce oil supply in a bid to lift prices.  The cartel – against all odds, as Phil Collins would say – managed to reach that much-hyped and much-coveted deal last week. And no one appeared more desperate for the deal than Venezuela.  Maduro rejoiced and praised the OPEC agreement as “a victory for the Bolivarian Peace Diplomacy”. And crude oil prices have jumped by around 15 percent since the deal was sealed on November 30.

Venezuela struggles to tame triple-digit inflation

6 Dec 2016   Venezuela

Bringing skills she gained working at a bank to her grocery store in Caracas, beset by a triple-whammy of ravaging food shortages, galloping inflation and plummeting currency, Miriam Borthomier relies on a basic but time-saving algorithm: 100 notes of any denomination of Venezuela’s currency weigh 110 grams. The biggest note in use is the 100 bolívar bill, which is worth roughly 2 US cents on the black market, forcing her customers to bring bagloads of cash. “I put the wads on the scale I use to weigh cheese and multiply the weight for the value of the notes, otherwise it’s horrible, I’d lose all day counting bills,” she said.

In an echo of Weimar Germany, Venezuelan shopkeepers have resorted to weighing banknotes instead of counting them. In defiance of official pegs, the local currency has tanked on the black market, losing a jaw-dropping 62 per cent of its value in November, making bills in circulation in the country virtually worthless. Hoping the recent Opec deal would boost Venezuela’s dwindling coffers, trade minister Jesús Faría said that “in the middle of such turbulence” the government would on Tuesday unveil measures to stabilise the currency.