Archive for the ‘Venezuela’ Category

Oil Shakes Venezuelan Debt to Its Foundations

| December 22nd, 2014 | No Comments »
Wall Street Journal WSJ-01


A slide in oil prices is hitting Venezuela hard, raising questions among investors about the South American country’s ability to pay its debts and heightening concerns about the health of developing economies around the world.

Venezuelan debt was widely held by emerging-market investors until the summer. Many viewed the bonds as a safe bet because the country brought in ample revenue as a major oil exporter. But a nearly 50% drop in the price of crude since mid-June has left Venezuela’s finances in shambles. The price of credit-default swaps on Venezuela debt, a type of insurance, indicate a 61% chance of default in the next year and a 90% chance in the next five years.

The country is an extreme example of the turmoil that sliding prices for oil and other commodities have had on emerging markets, where stocks, bonds and currencies have recently sold off from Russia to South ... Read More

How are Venezuelans coping with tumbling oil prices?

| December 19th, 2014 | No Comments »

Falling global oil prices have been a headache for many oil-producing countries, with exports now failing to bring in cash they used to just six months ago.

On Thursday, the price of Brent crude was just below $63 a barrel, while US crude was near $58.

The price of Venezuelan oil, which is very heavy by international standards, was even lower – at $57.53 a barrel for the week ending 13 December.

The dramatic downward slide started in June.

Six months of falling prices have hit Venezuela particularly hard – the country is heavily dependent on oil money, with 96% of export revenues coming from oil, according to reports.

BBC News has been speaking to a selection of Venezuelans on the streets of Caracas to find out how they have been personally affected by the fall in oil prices.

Oil down, goods up

Alex Hernandez, a businessman in Caracas, says the problem is exacerbated ... Read More

Obama Signs Bill to Sanction Venezuelan Officials

| December 18th, 2014 | No Comments »
ABC News

President Barack Obama has signed legislation into law allowing him to sanction Venezuelan government officials who were involved in a crackdown on anti-government protesters.

The bill authorizes sanctions that would freeze the assets and ban visas for anyone accused of carrying out acts of violence or violating the human rights of those opposing the South American nation’s socialist government.

Last summer, the State Department imposed a travel ban on Venezuelan officials who were accused of abuses during street protests that left dozens of people dead.

Click here for original ... Read More

Fire In The Hole: The Imminent Implosion of Venezuelan Chavismo

| December 17th, 2014 | No Comments »

By Agustino Fontevecchia

Ever since Hugo Chavez´s rise to power in 1998, the opposition has announced (like the boy who cried wolf) that the demise of the Chavista regime was around the corner. After 15 years, it is hard to find similar allegations to be truthful or realistic. The institutionalists in the armed forces did not overthrow the government, the opposition did not win the elections, and the economic crises have not roused the pro-Chavez masses against the government they elected. The hypotheses presented by the opposition have proven wrong repeatedly.

Yet, none of this means the danger of governmental collapse in Venezuela is nonexistent. On the contrary, if the disintegration of the Chavista leadership has ever been closer, it is now. Not for any of the previously mentioned reasons, though. This time the threat comes from deep inside PSUV (United Socialist Party of Venezuela). The fractures that pre-date the death of ... Read More

Venezuelan bonds tumble after Maduro comments on fuel subsidies

| December 16th, 2014 | No Comments »
Article originally appeared in Reuters

(Reuters) – Venezuelan bonds tumbled to new lows on Monday after President Nicolas Maduro said he is in “no hurry” to raise the price of gasoline, which is the cheapest in the world thanks to a huge subsidy that drains the OPEC nation’s coffers.

Investors are growing worried that Venezuela could default on its foreign debt due to capital flight caused by its currency control system and a tumble in crude prices that has cut into its hard currency holdings.

The country’s benchmark Global 2027 bond fell 5.13 percent to $37.63 to yield 26.46 percent. State oil company PDVSA’s 2017 bond lost 7.69 percent to $43.00 to yield 72.45 percent.

Venezuelan bonds on average yield 30.18 percentage points more than comparable U.S. Treasuries, according to JPMorgan’s Emerging Market Bond Index. They have lost 43.75 percent of their value this year, compared to a drop of 43.20 percent ... Read More

Who Gets Citgo’s Assets If Venezuela Defaults?

| December 16th, 2014 | No Comments »

By Ye Xie, Katia Porzecanski and Pietro D. Pitts

Venezuela’s bondholders have long held that if the South American country ever defaulted, they’d be able to seize its refineries and almost 6,000 gas stations in the U.S.

That notion is starting to unravel, just as plunging oil prices, a collapsing economy and dwindling foreign reserves has made swaps traders almost certain that Venezuela will renege on its obligations in the next five years.

Creditors would have a hard time convincing U.S. courts that Citgo Petroleum Corp., the Houston-based unit owned by Venezuela’s state oil company, is legally an “alter ego” of the government and responsible for its obligations, according to law firms Cleary Gottlieb Steen & Hamilton LLP and Buchanan Ingersoll & Rooney. For almost two decades, bondholders have assumed the ability to seize Citgo assets would deter Venezuela from stopping debt payments, which has propelled gains ... Read More

Venezuela reels under failing economy with no signs of improvement

| December 15th, 2014 | No Comments »
The Tampa Tribune

By Juan Carlos Chavez

TAMPA — For Venezuelans living in Tampa and across Florida, the news from home is painful to hear this Christmas season, with a growing economic crisis, a popular uprising and a harsh government crackdown.

Feb. 12 will mark the one-year anniversary of civil unrest in Caracas, Venezuela’s capital, against the regime of President Nicolas Maduro. The violence of the past 10 months has left more than 1,400 dead and thousands behind bars or injured.

Much of the anger on the streets arises from Maduro’s inability to restart a failing economy.

Citizens face shortages of basic necessities such as bread, toilet paper and milk. Inflation has risen to 63 percent, and many believe — with Venezuela’s economy heavily dependent on oil prices that now are in a tailspin — the country will enter a period of hyperinflation in the next few months.

“It is expected that the situation will worsen because the administration ... Read More

Venezuela’s Maduro says he hasn’t broken relations with U.S. only out of ‘Chavista wisdom’

| December 15th, 2014 | No Comments »
From Fox News Latino

Venezuelan President Nicolas Maduro said in a recorded television interview aired Sunday that he had wanted to break “all” relations with the United States and close Washington’s embassies and consulates, but he decided not to out of “Chavista wisdom.”

In a TV interview taped, evidently, on Saturday evening and aired while he was speaking on Sunday in Cuba at the Bolivarian Alliance for the Peoples of Our America, or ALBA, presidential summit, Maduro confirmed that on Monday a march to repudiate U.S. policies against him will be held in Caracas.

The U.S. Senate and House of Representatives in recent days have approved measures awaiting signature by President Barack Obama to deny visas and freeze assets of Venezuelan officials accused of violating the rights of Maduro opponents.

White House Press Secretary Josh Earnest announced last Friday that Obama approves of the initiative, although he offered no ... Read More

Venezuela’s Maduro says ‘no rush’ to hike world’s cheapest gasoline

| December 15th, 2014 | No Comments »
Article originally appeared in Reuters

(Reuters) – Venezuela’s Nicolas Maduro said there was “no rush” to hike the world’s cheapest gasoline prices, suggesting the increasingly unpopular president has shied away from implementing the risky domestic reform in the near future amid an economic crisis.

“I’ve considered, as head of state, that the moment has not arrived,” he said in a pre-recorded interview broadcast on the Televen channel on Sunday.

“The moment will come, maybe in 2015, there’s no rush, we’re not going to throw more gasoline on the fire that already exists with speculation and induced inflation.”

Venezuela’s economy is flailing under the weight of an over 60 percent annual inflation, an apparent recession, strict currency controls, and slipping oil prices.

Maduro has appeared reluctant to make necessary but unpopular economic adjustments, such as hiking gasoline prices for the first time in two ... Read More

“Obama debe ser muy agresivo aplicando las sanciones contra funcionarios de Venezuela”: Roger Noriega en NTN24

| December 12th, 2014 | No Comments »

El exembajador de Estados Unidos ante la OEA, Roger Noriega, dijo en El Informativo de NTN24 que Estados Unidos está “comprometido con el Estado de Derecho y la democracia” de América Latina, por lo que el Gobierno de Barack Obama deberá ser drástico con las sanciones a los funcionarios del régimen venezolano que violaron los derechos humanos de los ciudadanos de este país. 

De click aquí para ver la entrevista.

Read More

Venezuela Default Odds at 93% as Bonds Sink to 16-Year Low

| December 12th, 2014 | No Comments »

By Katia Porzecanski 

Swaps traders are almost certain that Venezuela will default as the rout in oil prices pressures government finances and sends bond prices to a 16-year low.

Benchmark notes due 2027 dropped to 43.75 cents on the dollar as of 11:35 a.m. in New York, the lowest since September 1998, as crude extended a bear market decline. The upfront cost of contracts to insure Venezuelan debt against non-payment for five years is at 59 percent, bringing the implied probability of default to 93 percent, the highest in the world.

This year’s 38 percent plunge in oil prices has exacerbated concern that Venezuela is running out of dollars needed to pay debt, pushing bond prices to levels investors haven’t seen since the 1998 Russian financial crisis spurred a selloff in emerging markets. Foreign Minister Rafael Ramirez, also the country’s OPEC representative, said yesterday that the government is working constantly with ... Read More

Obama Favors Sanctions for Abuse of Venezuela Protesters

| December 12th, 2014 | No Comments »
The New York Times


CARACAS, Venezuela — President Obama plans to sign into law a bill that would impose sanctions on Venezuelan government officials responsible for human rights violations or violence against protesters who took part in antigovernment demonstrations here this year, a White House spokesman said in Washington on Thursday.

Venezuela is a major oil supplier to the United States, but the two countries have had rocky relations during the governments of two leftist presidents, Nicolás Maduro and his predecessor and mentor, Hugo Chávez, who died last year.

Mr. Maduro has condemned the proposed sanctions and hinted at possible reprisals.

“The gringos now say that they are going to impose sanctions on Venezuela,” he said on Wednesday. “No one imposes sanctions on Venezuela, because our people decided to be free.”

The bill, which passed the Senate and the House ... Read More

US to impose sanctions on Venezuela officials

| December 11th, 2014 | No Comments »
Financial Times

By Andres Schipani

The US Congress on Wednesday voted to restrict travel and freeze assets on some Venezuelan government officials it accuses of human rights abuses during a crackdown on protests against socialist President Nicolás Maduro earlier this year.

More than 40 people have died during a wave of protests by students and members of the Venezuelan opposition against curbs on democratic liberties, rampant crime and a deteriorating economy in the embattled Caribbean nation.

The US Senate approved the measure earlier this week. Now the House of Representatives has passed it, it will be sent to President Barack Obama to sign it into law.

In late July, after peace talks between the government and opposition came to nothing, the US state department imposed a travel ban on some Venezuelan officials.

On Tuesday Mr Maduro lashed out on national television and radio at the possibility of an “insolent imperialist” move, warning that “if ... Read More

Venezuela, Not Russia, Will Be The First Domino To Fall With The Price of Oil

| December 11th, 2014 | No Comments »
Daily Caller


The oil price collapse has brought about excited speculation that the end may be near for Putin, Iran and the American oil shale industry. While the oil price downturn will definitely stress these three players, the prime candidate for political collapse is Venezuela – with significant ramifications for the United States.

And it’s likely the Obama administration is not prepared at all.

Venezuela has all three factors present for an imminent political implosion: 1) severe and worsening economic distress, 2) an organized political opposition, and 3) disunity in its security services. Russia and Iran may be in tough economic straits, but the political opposition in both countries is weak and the armed forces and police are clearly under the control of the existing regime.

For over 15 years Hugo Chavez and his successor Nicolas Maduro have pursued absurd socialist economic ... Read More

EU must act against ‘ever increasing authoritarian practices’ in Venezuela

| December 11th, 2014 | No Comments »
Parliament Magazine

By Dita Charanzová

In a desperate move to preserve the Chavista regime, president of Venezuela Nicolás Maduro has been resorting to extreme and desperate measures to prevent his government from collapsing. Maduro’s struggle to preserve his power is alarming, and the situation is quickly deteriorating.

As a result of the ever increasing authoritarian practices being employed, Venezuelans are suffering further restrictions on their freedom of expression, greater censorship over the media, police brutality – especially against protestors – and the arrest and detention of the political opposition.

The recent arrest of opposition leader and former national assembly deputy Maria Corina Machado on 3 December for allegedly plotting to assassinate president Maduro signalled the continuation of the government’s desperation to silence and punish opposition.

This is why I, together with my colleague Fernando Maura Barandiarán, have initiated a resolution on behalf of ALDE for the European parliament to address the persecution of democratic opposition in Venezuela ... Read More

Venezuela On the Road to Default

| December 11th, 2014 | No Comments »
Legal Insurrection

By Casey Breznick

Over the summer I covered the Argentine government’s default on its debts owed to U.S. hedge funds—its second default in just 13 years.

Now fellow Latin American socialist paradise Venezuela is gearing up for a default of its own, as precipitously falling oil prices have decimated the country’s budget and will continue to pressure its currency reserves. Since mid-June, crude oil prices have declined by more than 30%, with West Texas Intermediate (the benchmark measure for North American oil) dipping to $60.55/barrel before ultimately settling at a 5-year low of $61.54/barrel on Wednesday.

A CNBC report on the prospect of a Venezuelan default cited a Capital Economics report stating that a default could be expected by next September or October when $5 billion in debt payments come due. Only an upswing of oil prices to somewhere around $121/barrel would allow Venezuela to balance its budget, according to some estimates. But with OPEC recently slashing its 2015 ... Read More

U.S. House Passes Bill Sanctioning Venezuelan Officials

| December 11th, 2014 | No Comments »
Wall Street Journal WSJ-01


The U.S. House of Representatives unanimously passed a bill Wednesday sanctioning Venezuelan officials who had allegedly committed human rights abuses earlier this year.

The bill requires the U.S. to lift the visas of the Venezuelan officials and calls for the government to freeze any assets such officials might have in the U.S.

The bill, which passed the Senate on Tuesday by voice vote, is expected to be signed into law by President Barack Obama .

Sen. Robert Menendez (D., N.J.), a sponsor of the bill, called on other governments to deny Venezuelan officials involved in human rights violations “entry into their countries and access to their financial systems.”

On Tuesday in Caracas, Venezuela’s president, Nicolás Maduro, blasted the bill when it passed the Senate. “We don’t accept insolent, imperialist sanctions,” Mr. Maduro said in a nationally broadcast speech to military personnel. He angrily accused U.S. officials of “interfering” in Venezuelan affairs.

Rep. Ileana Ros-Lehtinen (R., Fla.), who ... Read More

U.S. Moves to Penalize Venezuelan Officials

| December 10th, 2014 | No Comments »
Wall Street Journal WSJ-01


The U.S. government moved closer to hardening sanctions on Venezuelan officials for alleged human rights abuses after Senate lawmakers passed a bill that now heads to the lower house, which has backed a similar proposal, for a vote this week.

The Senate voted late Monday to freeze the bank accounts and assets and decline visas to Venezuelan officials allegedly involved in a violent crackdown this year on Venezuelan protesters in which 43 people were killed. In May, the House overwhelmingly approved, by voice vote, a similar sanctions bill.

Florida congresswoman Ileana Ros-Lehtinen said the Senate legislation would be brought to a vote this week in the House, saying it was important to “not allow the actions of President Nicolás Maduro] to go unpunished.”

In Caracas, Venezuelan Mr. Maduro reacted angrily to the bill. “Outrage and condemnation is what we feel towards the White House,” Mr. Maduro said in a televised speech ... Read More

Sanciones a Venezuela podrían llevar a cambio de política de Estados Unidos

| December 10th, 2014 | No Comments »
El Nuevo Herald


El proyecto de ley aprobado por el Senado para sancionar al chavismo -que probablemente será ratificado esta semana por la cámara baja- contiene disposiciones que podría forzar un cambio en la política estadounidense hacia el régimen de Nicolás Maduro, obligando al Departamento de Estado a ser mucho más proactivo en asistir a los venezolanos a recuperar la democracia.

La nueva legislación también podría congelar los activos en dólares fuera de Estados Unidos de los funcionarios chavistas implicados en violaciones a los derechos humanos.

El proyecto de ley bipartidista, que en primera instancia congelaría las propiedades de al menos 56 líderes de la Revolución Bolivariana, también fortalece la posición de quienes están a favor de adoptar una posición mucho más agresiva frente a la destrucción de las instituciones democráticas en Venezuela y podría conducir a una mayor distribución de recursos para ese fin, señaló el ... Read More

Oil price plunge means survival of fittest

| December 10th, 2014 | No Comments »
Financial Times

By Anjli Raval

The 40 per cent plunge in the price of oil over the past six months is testing the mettle of the world’s biggest producers, from Venezuela to Iran and Russia. But it is also a survival of the fittest at a more granular level — among the world’s megaprojects.

Energy Aspects, a London-based consultancy, estimates that more than 12 per cent of global oil production would be uneconomic if the majors were to give the go-ahead to existing projects at today’s prices.

Most at risk are those in the Canadian oil sands which has a break-even price of $80 a barrel, US shale plays and other areas of tight oil ($76). Brazil’s deepwater fields ($75) and Mexican projects (around $70) are also vulnerable.

None of this looks pretty, particularly as most new production scheduled to come on line in the next couple of years is set to come ... Read More

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