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Venezuela Economic Crisis to Only Get Worse, Barclays Says

A ship arrives at the port in Puerto Cabello, Venezuela, on Aug. 24, 2015. Venezuela is suffering the deepest economic crisis in its history with output expected to contract 9.1 percent this year, Barclays Plc said Friday. The economic contraction will likely reach 16.5 percent between 2014 and 2016, while inflation over that period will exceed 1,000 percent, Barclays wrote in a note to clients. “It is impossible to understand why the government is not reacting to this reality, why it has not taken measures to alleviate the economic distortions that are destroying the real income of Venezuelans,” Barclays said. President Nicolas Maduro will not likely announce any changes in economic policy before congressional elections Dec. 6, the bank said. With support for the ruling Socialist party at around 19 percent, the country is politically divided as it also battles low prices for oil, which accounts for 95 percent […]

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Brazil pledges to slash emissions by 43%

Brazil pledged on Sunday to slash greenhouse gas emissions by 43 percent by 2030 as its contribution to a United Nations climate agreement, but said it will include reductions from past efforts against deforestation to help it reach the target. President Dilma Rousseff presented the country’s pledges during a speech at the U.N. General Assembly in New York, noting the targets are more ambitious than those of most developed countries and that Brazil will not need external support to achieve them. Brazil already curbed emissions by 41 percent between 2005 and 2012, largely through fighting deforestation. Rousseff reaffirmed the country’s commitment to ending that illegal practice in the Amazon , as stated during a joint announcement with U.S. President Barack Obama in June, but fell short of declaring a freeze on deforestation in general as many environmental groups had sought. Emissions from deforestation worldwide account for 15 percent of […]

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Transocean Cited in Petrobras Carwash Corruption Investigation

Transocean Ltd., the world’s largest offshore rig contractor, is being linked for the first time to the corruption probe of Petroleo Brasileiro SA, the state-owned energy giant at the center of Brazil’s biggest corporate scandal. A former executive at Brazil’s state-run oil company has testified to receiving what he says were payments made by someone claiming to be a Transocean agent in exchange for a rig-operation contract from Petrobras. “Transocean has a long-standing commitment to and upholds the highest standards for corporate ethics and compliance,” the company said in an e-mailed response. “Our employees — and everyone conducting business on our behalf — are required to adhere to our high standards for integrity, honesty, financial discipline and legal and regulatory compliance.” As a result of the probe into the alleged pay-to-play scheme, known as Carwash, Petrobras has temporarily blocked more than 20 suppliers from future work with the oil […]

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Petrobras Sees ‘Great Wave’ of $100-Oil Never Coming Back

It’s unlikely that oil prices will ever return to $100 a barrel and Petroleo Brasileiro SA needs to work with suppliers to manage the price rout, an executive at the state-run oil producer said Tuesday. “We were all surfing the great wave of $100 a barrel,” Cristina Pinto, the company’s executive manager for exploration and production said at an event in Rio de Janeiro. “It won’t get to $100 again. If it gets to $70, we’ll be happy.” Shares tumble 60% in a year as Brent sinks to less than $50 a barrel The world’s largest producer in ultra-deep waters is working to optimize technology to cut costs and save in everything from buoys to riser pipes used at its offshore platforms, Pinho said. Chief Executive Officer Aldemir Bendine said Monday that the company seeks to reduce costs to withstand a combination of lower oil prices and a weaker […]

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Venezuelan leader says to travel to push for OPEC, non-OPEC meeting

Venezuelan President Nicolas Maduro said on Tuesday he would travel shortly to seek support for his push for a summit between OPEC and non-OPEC producers on lower oil prices. Maduro has lobbied for months for an emergency meeting and coordination with non-OPEC nations, but OPEC’s Middle East producers have pledged to maintain high output in a fight to defend market share against rising competition. This week Maduro reiterated calls for action within OPEC and beyond OPEC, mentioning controls on output and price bands. "Probably in coming days I will travel to reinforce work to achieve this historic summit between OPEC producers and non-OPEC producers," Maduro said after a four-hour televised broadcast. His calls for action come as Venezuelan oil prices, which averaged $41.08 last week, exacerbate a dire economic crisis that has goods ranging from cancer medication to car batteries in short supply, while raging inflation slams purchasing power […]

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Opposition in Venezuela Is Unsettled by Leader’s Sentence

Photo At a demonstration in Caracas on Friday, Lilian Tintori read a letter that her husband, Leopoldo López, an opposition leader, had written in prison. Credit Meridith Kohut for The New York Times CARACAS — A year ago Leopoldo López, a Venezuelan opposition leader, walked at the head of rallies of tens of thousands of people, calling for the exit of President Nicolás Maduro and setting off a wave of demonstrations and unrest as the country boiled with discontent. But on Friday, only a few hundred people showed up at a demonstration to support him, a day after he was convicted and sentenced to nearly 14 years in jail for his role in leading last year’s protests. The small size of the crowd told the story: The opposition finds itself discouraged and off balance even as it retains hopes of winning crucial legislative elections scheduled for December. “In Venezuela […]

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As a Boom Fades, Brazilians Wonder How It All Went Wrong

Photo Applicants at a government-run job center in São Paulo on Thursday. Brazil’s unemployment rate reached a five-year high, 7.5 percent, in July. Credit Andre Penner/Associated Press BRASÍLIA — The president of Brazil should have been ecstatic. She had just won re-election after an intense campaign in which she fiercely defended her role in making Brazil , for a few fleeting years, a rising star on the global stage. But in the days after her victory last October, President Dilma Rousseff was worried, confronted in private deliberations with her closest advisers by signs that Brazil’s triumphs were at risk of coming undone. “We went too far,” Aloízio Mercadante, Ms. Rousseff’s chief of staff, acknowledged publicly this month, describing the sense of alarm as the dust settled after the election and Ms. Rousseff and her aides grappled with the weaknesses in Brazil’s economy. It was not just the drop in […]

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Venezuelan Opposition Leader Is Sentenced to Prison Over a Protest

Photo Leopoldo López in February. Credit Juan Barreto/Agence France-Presse — Getty Images CARACAS, Venezuela — A judge on Thursday found the Venezuelan opposition politician Leopoldo López guilty of inciting violence and other charges stemming from his leading role in a large antigovernment protest, according to government television reports. Mr. López, a Harvard-educated former mayor of a wealthy section of Caracas, was sentenced to more than 13 years in prison, the television reports said. Critics said the trial was politically motivated and lacked basic guarantees of due process. Lawyers for Mr. López said they were barred from presenting any witnesses or evidence at the trial. “This has been a farce,” said José Miguel Vivanco, Americas director of Human Rights Watch , speaking by telephone from Washington. “It’s a kind of a caricature of a judicial procedure and in violation of fundamental principles of due process, of presumption of innocence.” The […]

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Oil price crash prompts scramble for Caribbean storage tanks

Norwegian Oil tanker ”Champion Spirit” passes beside Havana’s seafront boulevard ”El Malecon” (top) and colonial fortress ”Morro Cabana” before entering the port June 1, 2010. Demand for crude storage in the Caribbean, one of the world’s most important oil hubs, is rising as producers and traders try to ride out the worst price crash in six years by holding onto more barrels or making blends that can be sold for premiums. The last time tanks in the logistically-important islands were this full, during the price collapse of 2009, companies started leasing vessels to use as floating storage. That is not yet happening now, but the only way to get tank space at the moment is to sublease it, said one tank broker with decades of experience. Since June, his firm alone has received requests to lease up to 7.5 million barrels of tankage in a region with some 100 […]

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Venezuela Says China to Give $5 Billion Oil Loan

CARACAS—Venezuela’s government, facing a cash crunch amid a slump in oil prices, signed a deal to receive a $5 billion loan from China, President Nicolás Maduro said Tuesday. The funds will go to increase oil production in Venezuela in the coming months, Mr. Maduro said without offering more details during an address from China that was broadcast on Venezuelan state television. Support from Beijing—which also renewed a separate $5 billion loan to Venezuela earlier this year—may offer some relief to bond markets, where Venezuela’s debt securities are rated among the world’s riskiest. Wall Street analysts say the country could default on its debt as soon as next year. Mr. Maduro visited Vietnam and China this week in pursuit of financial aid for South America’s largest oil exporter as it reels from triple-digit inflation and worsening food shortages. The economic troubles are weighing on the ruling Socialist Party’s popularity ahead […]

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Russia, Venezuela to Discuss Potential Steps to Stabilize Oil Prices

MOSCOW—Russian President Vladimir Putin will discuss “possible mutual steps” to stabilize the global price for oil at a meeting with Venezuelan President Nicolás Maduro in China on Thursday, a Kremlin aide said, as both countries grapple with lower prices for their main export. Venezuela, a Russian ally that has been hit hard by plunging oil prices, has been pushing for an emergency meeting with the Organization of the Petroleum Exporting Countries in coordination with Russia to work out a strategy to halt the recent retreat in prices, people familiar with the matter said. The Kremlin aide, Yuri Ushakov, didn’t expand on what potential steps could be taken but said they could be “within the context of Russia’s cooperation with OPEC.” Russia also has been hurt by lower crude prices, as oil and gas account for half of federal budget revenue. But officials have repeatedly said that Russia, which vies […]

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Venezuela Asks OPEC for Emergency Meeting on Oil Prices

Hard-hit Venezuela has been contacting other OPEC members to push for an emergency meeting in coordination with Russia to come up with a strategy to stop the current oil price rout, people familiar with the matter said. According to these people, Venezuela has been in touch with some members of the Organization of the Petroleum Exporting Countries, including Qatar’s oil minister and president of the OPEC conference, Mohammed al-Sada, to try again to find common ground to defend crude prices. “Venezuela is genuinely concerned that if no action is taken prices are going to drop further,” an OPEC delegate said. “They also understand that OPEC alone cannot help much and there is a need for cooperation with producers outside OPEC, mainly Russia,” the delegate said. A representative of Venezuela couldn’t be immediately reached for comment. Russia has previously sought closer ties to OPEC, but has signaled that it won’t […]

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How Brazil’s China-Driven Commodities Boom Went Bust

SÃO PAULO—Not long ago, Brazil stood as the leading example of how a developing nation could rise toward global prominence on the force of a China-driven commodity boom. As its economy surged, Brazil stormed the world stage—hosting a World Cup, demanding more say at the United Nations and blocking a U.S. free-trade plan for the Americas. Now Brazil is looking like a symbol of something else: resource-rich nations’ habit of ending their booms with spectacular busts. Brazil’s stock market is down 22% in the past year. Its currency has lost a third of its value against the dollar. And on Friday, Brazil is expected to report that in the second quarter, its economy shrank at a pace of about 1.7%. Economists are voicing fears of prolonged stagnation. China has caused turmoil in many places, but none more so than in this prime supplier of commodities to a country whose […]

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Venezuela’s Food Shortages Trigger Long Lines, Hunger and Looting

LA SIBUCARA, Venezuela—Hours after they looted and set fire to a National Guard command post in this sun-baked corner of Venezuela earlier this month, a mob infuriated by worsening food shortages rammed trucks into the smoldering edifice, reducing it mostly to rubble. The incident was just one of numerous violent clashes that have flared in pockets around the country in recent weeks as Venezuelans wait for hours in long supermarket lines for basics like milk and rice. Shortages have made hunger a palpable concern for many Wayuu Indians who live here at the northern tip of Venezuela’s 1,300-mile border with Colombia. The soldiers had been deployed to stem rampant food smuggling and price speculation, which President Nicolás Maduro blames for triple-digit inflation and scarcity. But after they seize contraband goods, the troops themselves often become targets of increasingly desperate people. “What’s certain is that we are going very hungry […]

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Oil at $77? It Is in This Country That Plays by Its Own Rules

South America’s second-largest and most enigmatic economy, Argentina is marching to its own beat. (Bloomberg) — Oil at $77? It is in Argentina. Oil has plummeted below $39 a barrel in the U.S. But despite the price bloodbath in global energy markets, it fetches nearly twice that amount in Argentina — home to some of the most expensive crude in the world. Even as prices plunged anew Monday, sending world benchmarks close to the lowest levels they briefly hit in the Great Recession, oil is still flying high in Argentina for the simple reason the government wants it that way. There is some method behind the apparent madness. Argentina is home to the second-largest reserves of shale gas and fourth- largest of shale oil in the world. Faced with a $6-billion energy trade deficit in 2014, the government has been using its made-in-Argentina price to try to turbocharge domestic […]

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Venezuelans contend with food, medicine shortages, as low oil prices cripple economy

Empty refrigerator shelves are pictured at a Makro supermarket in Caracas, Venezuela, August 4, 2015. Venezuelan supermarkets are increasingly being targeted by looters, as swollen lines and prolonged food shortages spark frustration in the OPEC nation struggling with an economic crisis. Photo by Carlos Garcia Rawlins/Reuters Amid Venezuela’s ongoing economic crisis, protests this month in the nation’s capital over shortages of medicine and basic supermarket necessities have spotlighted the ripple effect of the falling price of oil, the country’s main export. Food shortages have prompted some violence and more than 50 incidents of grocery store looting so far in 2015. Families of children with cancer demonstrated in front of a children’s hospital in Caracas this month to protest the country’s shortage of chemotherapy treatments. Tens of thousands of Venezuelans with HIV have no access to antiretroviral drugs and condoms are scarce in the country. Venezuela has some of the […]

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9 Opposition Candidates Barred From Venezuela’s December Ballot

Photo Enzo Scarano, a former mayor of San Diego, Venezuela, won a primary for national legislative elections, but the government suspended his right to hold office. Credit Meridith Kohut for The New York Times SAN DIEGO, Venezuela — When he handily won a primary to run for the National Assembly, Enzo Scarano hoped to be part of a wave carrying the opposition to a legislative majority that would alter the political balance in Venezuela . But when a government agency stripped him of his right to hold public office, scuttling his candidacy, he found himself caught up in a different kind of wave — of government measures that appear aimed at weakening the opposition ahead of a make-or-break legislative election in December. “It was a message to the Venezuelan people: ‘Look, we can do whatever we want,’ ” Mr. Scarano said of the move to bar him and at […]

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Colombian Peso Leads Global Currency Declines as Crude Tumbles

Colombia’s peso led global declines as oil, the nation’s biggest export, tumbled on concern that a slowdown in China’s economic growth will reduce demand for the commodity. The peso plunged 1.5 percent to a record low 3,107.65 per dollar at the close in Bogota, extending its weekly loss to 3.7 percent. The daily drop was the biggest among 152 currencies tracked by Bloomberg. Crude oil tumbled to below $40 a barrel in New York for the first time since 2009. “This really is panic mode,” Andres Munoz, the head currency trader at Corp. Financiera Colombiana, said from Bogota. “Investors are getting out of emerging markets” including Colombia’s local peso bonds. One-month implied volatility on options for the peso, reflecting projected shifts in the exchange rate, increased Friday to the highest level since June 17. The currency’s swings may lead the central bank to announce currency measures to ease swings […]

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China’s Building a Huge Canal in Nicaragua, But We Couldn’t Find It

A man points out the towns that will be affected where the canal, red line, will be built across Nicaragua. Deep on the southeastern side of Lake Nicaragua, along a bumpy dirt road that climbs gently through lush-green forest, sits the tiny town of El Tule. It is quintessential rural Central America: Chickens roam outside tin-roofed homes while pigs stand tied to trees, awaiting slaughter; the sound of drunk locals singing along to ranchera music greeted visitors on a recent rain-soaked afternoon. The village, if you listen to Nicaraguan officials, is a key point in what will be the biggest infrastructure project the region has ever seen, the construction of a $50 billion canal slated to run 170 miles from the country’s east to west coast. Awarded two years ago by President Daniel Ortega to an obscure Chinese businessman named Wang Jing, the concession calls for El Tule to […]

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Exclusive: U.S. graft probes may cost Petrobras record $1.6 billion or more – source

A fuel storage tank is seen at the company Petroleo Brasileiro SA, or Petrobras, in Sao Caetano do Sul, near Sao Paulo July 24, 2015. Brazil’s Petrobras may need to pay record penalties of $1.6 billion or more to settle U.S. criminal and civil probes into its role in a corruption scandal, a person recently briefed by the company’s legal advisors told Reuters. State-run Petroleo Brasileiro SA, as the company is formally known, expects to face the largest penalties ever levied by U.S. authorities in a corporate corruption investigation, according to the person, who has direct knowledge of the company’s thinking. The settlement process could take two-to-three years, this person said. To date, the largest settlement of corporate corruption charges with the U.S. Department of Justice and the U.S. Securities and Exchange Commission was a 2008 agreement with Siemens AG, the German industrial giant. It agreed to pay the […]

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Brazilians Return to Streets to Urge Rousseff’s Ouster

RIO DE JANEIRO — Tens of thousands of protesters returned to the streets of cities across Brazil on Sunday to express their ire against President Dilma Rousseff , reflecting a low ebb for her as she grapples with a colossal bribery scandal and a declining economy. Still, the protests in some cities seemed to lack some of the urgency of huge demonstrations this year calling for the ouster of Ms. Rousseff, a leftist who won re-election just 10 months ago, suggesting tension may be easing somewhat on the president as congressional and business leaders try to prevent a political crisis from intensifying. The protest in Rio de Janeiro had something of a Carnivalesque feel to it; some demonstrators wore bathing suits as they marched through the Copacabana district as trucks blared samba. But vitriol also marked the event, with some urging the president to kill herself or calling on […]

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Venezuela’s food shortage keeps getting worse

People queue to buy staple items outside a state-run Bicentenario supermarket in Caracas, August 4, 2015. See Also As dawn breaks over the scorching Venezuelan city of Maracaibo, smugglers, young mothers, and a handful of kids stir outside a supermarket where they spent the night, hoping to be first in line for scarce rice, milk, or whatever may be available. Some of the people in line are half-asleep on flattened cardboard boxes; others are drinking coffee. Almost all are bemoaning their situation. With shortages of basic goods and looting on the rise, more Venezuelans say they are resorting to nighttime waits in front of closed stores. "I can’t get milk for my child. What are we going to do?" said Leida Silva, 54, breaking into tears outside the Latino supermarket in northern Maracaibo, where she arrived at 3 a.m. on a recent day. The food shortages in Venezuela, a […]

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Scandals in Brazil Prompt Fears of a Return to Turmoil

Photo President Dilma Rousseff speaking in Brasília. Her approval rating has plunged since her re-election to a second term last year. Credit Ueslei Marcelino/Reuters RIO DE JANEIRO — The president is battling calls for her impeachment. The speaker of Brazil ’s lower house is grappling with accusations that he pocketed a $5 million bribe. The former treasurer of the governing Workers Party is in jail. Even former President Luiz Inácio Lula da Silva, Brazil ’s most towering political leader in recent decades, is under the cloud of an investigation into claims of influence peddling. A sweeping anticorruption crusade in Brazil is ensnaring one major political figure after another, throwing the country into upheaval at a time when the national mood is souring and the economy is reeling from a painful downturn. Large segments of the political establishment are maneuvering against President Dilma Rousseff , a rebellion led by some […]

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Venezuela says pushing for OPEC, Russia action to stem oil fall

Venezuela’s President Nicolas Maduro speaks during a meeting with representatives of the countries from the Bolivarian Alliance for the Americas (ALBA) in Caracas, in this handout picture provided by Miraflores Palace on August 10, 2015. Cash-strapped Venezuela is pushing for an emergency OPEC meeting and joint coordination with Russia to stem a tumble in oil prices, President Nicolas Maduro said on Tuesday night. "We’re working towards a special OPEC meeting, in coming days we’ll announce …. We’re making contacts with OPEC governments," Maduro said during an hours-long televised broadcast. "We’re evaluating the possibility that a very high ranking OPEC meeting be called, and that in coordination with the Russian Federation, President Vladimir Putin, we can advance in taking a series of actions to defend the oil market in the face of this latest fall," he added. Further details were not immediately available. While members including Venezuela and Algeria are […]

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Panama Canal sets draft restrictions due to El Nino-related drought

The Panama Canal Authority said it will temporarily lower the maximum allowable draft for vessels transiting through the Panama Canal in September due to El Nino-related droughts, the first such restriction in nearly 20 years. The maximum allowable draft will be lowered to 11.89 meters (39 feet), from the current level of 12.04 meters (39.5 feet) from September 8, in a move that could affect almost 20% of vessels transiting the canal. "These temporary and preventive measures are due to an anticipated climatic variability event related to El Nino … it has triggered a drought in the Canal Watershed, causing the water levels of Gatun and Alhajuela Lakes to fall substantially below their average for this time of year," the Panama Canal Authority, or ACP, said in shipping advisory Friday. El Nino is a phenomenon marked by a warming of sea surface temperatures in the tropical Pacific and can […]

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Venezuela farmers ordered to turn over their food to the government

As Venezuela’s economy continues to worsen — its currency having entered “free fall mode,” according to the Financial Times — the desperate Maduro government has taken the extreme measure of nationalizing the nation’s food industry. Venezuelan farmers and food producers are now required to sell anywhere from 30 percent to 100 percent of their products to state-owned stores. The order covers staple foods such as rice, milk, oil, sugar and flour. Shortages and long lines in stores have become common since Venezuela’s economy began sliding into inflation — a situation that placed them at the top of the list in the world for inflation in 2014. The official inflation rate was 65 percent last year, and in the last month the currency has lost another 43 percent of its value. Oil prices once again have dropped, causing further strain on Venezuela’s struggling economy. The recent free fall of the […]

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Petrobras Oil Scandal Leaves Brazilians Lamenting a Lost Dream

Photo Comperj, a giant refinery and petrochemical complex built by the state oil company, Petrobras, in Itaboraí, Brazil. The unfinished project was originally planned to cost $6.1 billion, but a state audit put the price closer to $50 billion. Credit Andre Vieira for The New York Times Alberto Youssef, a convicted money launderer and former bon vivant, sat in a Brazilian jail cell in March of last year, getting ready to tell his lawyers a story. It was about an elaborate bribery scheme involving Petrobras , the government-controlled oil giant. He opened with a dire prediction. “Guys,” Mr. Youssef said, “if I speak, the republic is going to fall.” To those lawyers, Tracy Reinaldet and Adriano Bretas, who recently recounted the conversation, this sounded a tad melodramatic. But then Mr. Youssef took a piece of paper and started writing the names of participants in what would soon become known […]

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Venezuela’s Giant Lake of Endless Oil Is a Filthy, Lawless Mess

Lake Maracaibo, a 5,097 square mile body of water, is a graveyard for everything from abandoned pipeline to tires. Photographer: Pietro Pitts/Bloomberg From the moment the diver in red nylon coveralls and blue Chuck Taylor sneakers resurfaces after replacing rusted pipeline on the bed of South America’s largest lake, it’s a race against time. Coated head to toe in dark-black oil, he clambers aboard the service boat, rips off his makeshift uniform and scrambles to hose himself down with a special compound to wash away the contaminants. For nearly a century, the petroleum deposits beneath giant Lake Maracaibo served as a cash cow for successive Venezuelan governments. In return, especially in the years since the company’s energy industry was nationalized by former President Hugo Chavez, it has received little back but neglect. The Maracaibo basin is where Venezuela’s enormous energy bounty, including oil reserves that dwarf even those of […]

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Venezuela governor: 1 killed during supermarket looting

AP Photo/Fernando Llano CARACAS, Venezuela (AP) — A man was killed and dozens were arrested Friday as a mob looted a supermarket in an industrial Venezuelan city, Bolivar state authorities said. In announcing the looting, Gov. Francisco Rangel pushed back against opponents of Venezuela’s socialist government who attributed the unrest to widespread scarcities of basic goods across the oil-rich nation. He said more than two dozen people were arrested in connection with the looting in the southeastern city of Ciudad Guyana and added that there was no excuse for the behavior. "No one is starving," he said. Rangel also suggested to the television station Globovision that the looting might have been driven by people with "political motives." Tensions are running high in Venezuela as the country gears up for December legislative elections. Local newspaper Correo del Caroni said the dead person was a 21-year-old vendor had been shot in […]

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Venezuela: Troops Suppress Riots in San Felix

One man was killed and 15 people were arrested when a group of people looted businesses and attacked state-owned vehicles in San Felix, Bolivar state, Ultimas Noticias reported July 31. Unconfirmed reports indicated that up to 60 people were arrested. The National Guard deployed armored vehicles to San Felix, and the looting has reportedly subsided. The riots occurred in the midst of high inflation and food shortages as a result of the country’s economic crisis . Stratfor provides global awareness and guidance to individuals, governments and businesses around the world. We use a unique, intel-based approach to analyze world affairs. Copyright © 2015 Stratfor Global Intelligence, All rights reserved. Our mailing address is: 221 West 6th Street Suite 400 – Austin, TX 78701, USA unsubscribe from this list update subscription preferences | forward email

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Beer shortages loom in Venezuela as troops occupy Caracas warehouse

The head of Venezuela’s liquor store federation has warned beer production has reached ‘zero hour’ amid widespread shortages in raw materials. Photograph: Fernando Llano/AP Venezuela’s largest beer manufacturer is shutting some of its breweries, blaming a lack of imported barley, as its parent company remains locked in a wider dispute with the country’s government. The federation of beer brewers announced on Thursday that the beer-making subsidiary of Empresas Polar would suspend operations at two of its six plants owing to the shortage. Polar is Venezuela’s largest privately held company and distributes a majority of the country’s beer. Venezuelan troops, meanwhile, occupied a Caracas warehouse complex used by Empresas Polar and Nestlé, workers and company officials said on Thursday. The government says the land is needed for housing for the poor. A Nestlé spokesman, Andres Alegrett, said the company had been informed by the facility’s owner that the area was […]

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Report: Cuba may get oil help from Angola

Cuban energy company reaching out to Middle East counterparts for help with offshore oil development. Photo by GVictoria/Shutterstock HAVANA, July 21 (UPI) — Cuba expects to kick start its deepwater oil exploration activity with assistance from Angola’s state-run energy company Sonangol, a Cuban official said. Cuba is opening its doors more for Western powers after a long Cold War policy of isolation from the United States. The country in the past worked to cut the amount of oil it imports from Venezuela through development of its own offshore reserves. An unnamed official from Cuba’s Cubapetroleo, or Cupet, told energy reporting service Argus the preliminary deal with Sonangol outlines drilling schedules. "The matters to be determined include which of the blocks contracted by Sonangol will be drilled, the sourcing of a rig and the timing of the start of the work," the official said. The U.S. Geological Survey, which reviewed […]

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Venezuela orders producers to divert food to state stores

CARACAS, Venezuela (AP) — Private companies in Venezuela say the government has ordered them to distribute food staples to a network of state-run supermarkets amid chronic shortages of basic goods. The Food Industry Chamber said Monday that authorities ordered producers of milk, pasta, oil, rice, sugar and flour to supply between 30 percent and 100 percent of their products to the state stores. The chamber says there are 15 times as many private stores in the socialist South American country as state-run ones. Chamber President Pablo Baraybar says the order could cause major supply problems. Government officials could not be reached for comment. Rigid currency controls and a shortage of U.S. dollars make it difficult for Venezuelans to find imported goods. Companies say controls make it hard to turn a profit and justify production.

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Shale does not mean end to Argentina’s natural gas imports: IAPG

Argentina likely will continue to import natural gas supplies to meet peak demand, even as its production from large shale and tight gas resources grows in the next two decades, the Argentine Institute of Oil and Gas (IAPG) said. This is because it would not be economically viable to install production and transport infrastructure to meet peak demand in winter, due to the high cost of maintaining excess capacity simply to have it available for up to 90 days of the year, the industry group said in its gas demand forecast for 2015-2035. "It is cheaper to import LNG, than to build infrastructure and drill wells to meet peak demand," said IAPG president Ernesto Lopez Anadon. IAPG forecast that gas demand would rise to 260 million cubic meters/d in 2035, with peaks of 290 million cu m/d in the May-September cold season. That compares with average gas demand of […]

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Venezuela expands oil blending scheme with Nigeria crude buys: traders

An oil tank is seen at PDVSA’s Jose Antonio Anzoategui industrial complex in the state of Anzoategui April 15, 2015. Venezuelan state-run oil company PDVSA has bought two 1-million barrel cargoes of Nigerian crude from Royal Dutch Shell in the past month to be used as diluents for its extra heavy oil, traders told Reuters. Venezuela, which has the world’s largest crude reserves, began importing a variety of crudes for the first time last year, using them to dilute the OPEC nation’s heavy grades in order to reduce costs and create better blends for customers. PDVSA imported some 4 million barrels of Algerian Saharan Blend crude from October to January under a supply contract with state-owned Sonatrach during the maintenance of a heavy-crude upgrader, which it says saved $10 to $20 a barrel. It is also buying Russian Urals crude for its Isla refinery and a storage terminal on […]

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Premier Oil raises exploration budget to spend more in Falklands

Oil producer Premier Oil has increased its 2015 exploration budget by $20 million to account for higher investments in its drilling campaign in the Falkland Islands, the company said in a trading update on Thursday. The London-listed firm, whose operations stretch from the Falkland Islands to Indonesia, also said it had received an offer for its Pakistan business and was starting a process with interested parties to dispose of those assets. The company expects revenue in the first half of 2015 of $580 million, down 34 percent from a year earlier due to lower oil prices and lower production levels as the result of a disposal. Premier Oil is scheduled to report half-year results on August 20.

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Report: Brazil’s Petrobras wading dark waters

Brazilian oil ambitions may be larger than reality, a survey from British energy consultant group Douglas-Westwood finds. File Photo by UPI/Shutterstock/project1photography LONDON, July 6 (UPI) — British energy consultant Douglas-Westwood said the prospects of turning 16 billion barrels of potential Brazilian barrels of oil into reality may be dubious. Douglas-Westwood said it was questioning whether Brazilian energy company Petrobras can turn ambition into reality in deepwater prospects. "Brazil’s huge deepwater potential remains constrained with Petrobras having to revise their production target for 2020, which now forecasts domestic oil output to increase to 2.8 million barrels per day – 40 percent lower than its projection 12 months ago," a forecast published Monday read. Petrobras last week published a management plan through 2019 that reflects the downturn in crude oil prices. The Brazilian company cut overall spending plans by 40 percent, but allocated 84 percent of that to exploration and production, […]

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Eni starts production at giant Venezuelan gas field

Italian energy company Eni announces start to gas production at field in Venezuela said to be among the largest in the world. File Photo by UPI/Shutterstock/James Jones Jr. CARACAS, Venezuela, July 6 (UPI) — Italian energy company Eni said Monday it started production at the Perla gas field, the largest field of its kind found off the coast of Venezuela. "Perla was for Eni one of the most significant start-up projects of 2015, and the today result confirms the validity of our development model that allowed us to reach production in an industry-leading time to market," Eni Chief Executive Officer Claudio Descalzi said in a statement. Considered among some of the largest gas discoveries in the world, Eni said the Perla field off the coast of Venezuela holds an estimated 17 trillion cubic feet of natural gas. It’s situated about 30 miles offshore in the Cardon IV reserve area, […]

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Oil Selloff Sinks Petrobras as Ibovespa Extends Weekly Decline

Petroleo Brasileiro SA, the world’s most-indebted oil company, led losses in the Ibovespa as oil slumped on concern supplies are too high. Shares of Petrobras extended a three-day plunge as crude sank 4.2 percent to $56.96 a barrel after data showing U.S. stockpiles rose for the first time in nine weeks and OPEC production increased. The state-run company has said that investments in oil and gas offshore production are economically viable with the commodity above $45. “There are too many uncertainties regarding the profitability of Petrobras’s investments as crude falls,” Eduardo Velho, the chief economist at investment firm INVX Global Partners, said in a phone interview from Sao Paulo. The Ibovespa retreated 0.6 percent to 52,757.54 at the close of trading in Sao Paulo, bringing this week’s decline to 2.3 percent. The gauge had posted the best first half of any year since 2009. Brazilian shares swung between gains […]

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FARC Rebels See Upsurge in Colombian Violence as Talks Drag

Colombia Marxist rebels said they’ll step up attacks on security forces after suspending their cease-fire as peace talks to end Latin America’s longest-running insurgency drag on. The Revolutionary Armed Forces of Colombia, or FARC, will target the army more than oil installations, a guerrilla commander known as Matias Aldecoa said in an interview in Havana. Pipelines used by companies including Ecopetrol SA and Occidental Petroleum Corp. have been damaged in FARC bombing attacks in the past few weeks. “Soon people will see the war in this latest phase, and they’re going to see the number of police and soldiers who die,” Aldecoa said Saturday, in an interview in Havana. “For us, oil pipelines aren’t the No. 1 target.” The FARC suspended a unilateral cease-fire in May after the armed forces killed at least 26 guerrillas in an attack in south west Colombia. The resumption of attacks has increased casualties […]

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China, Venezuela discuss 10-year cooperation plan

CARACAS, June 29 (Xinhua) — Venezuela and China on Monday assessed progress in bilateral projects and drafted a 10-year cooperation plan as part of their comprehensive strategic partnership. The plan was drafted during the 4th technical meeting of the China-Venezuela High-Level Joint Commission that opened here on Monday. Addressing the opening session of the three-day meeting, Venezuelan Vice President for Planning Ricardo Menendez said the goal of the meeting was to agree on projects that will help spur development in both nations. "We are going to be working on the topic of telecommunications," to provide computer tablets for university and primary school students, install related factories and build undersea cables to connect with other parts, such as the Caribbean, said Menendez. Also on the agenda are plans to boost Venezuelan industry by expanding cement plants, and iron, aluminum and paper manufacturing, and by bolstering infrastructure at ports and airports. […]

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Guyana Assures Exxon Venezuela Dispute Won’t Slow Oil Exploration

By Kejal Vyas When it comes to Exxon Mobil Corp.’s recent oil discovery off the coast of Guyana, one that Venezuela claims as its own, Guyanese President David Granger has a clear message for the U.S. company: Full speed ahead. Mr. Granger, who took office days before Exxon announced the significant find last month, said that he met with officials from the company–which was contracted by Guyana–and offered assurances that exploration work won’t be interrupted, despite Venezuela’s recent revival of a century-old claim on two-thirds of Guyana’s territory. Guyana, a former British colony of 750,000 people and South America’s only English-speaking nation, is counting on diplomacy and the help of regional allies to resolve the matter. A Paris arbitration tribunal in 1899 had set the internationally recognized boundaries, but Venezuela sixty years later rejected the findings saying it was cheated. "We’re not going to send the navy out there […]

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Argentina and China lead shale development outside North America in first-half 2015

map of Neuquen Basin and Sichuan Basin, as explained in the article text As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil): the United States and Canada, and more recently, Argentina and China. Beyond these four countries, other countries have started exploring hydrocarbons from shale and other tight resources, but they are still short of reaching commercial production. The 2013 World Shale Gas and Shale Oil Resource Assessment , produced by EIA and Advanced Resources International (ARI), noted large shale deposits in China and Argentina. Exploration and drilling is already underway in these countries. For the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Each country has the potential to significantly increase production of shale gas […]

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Pirates and hold-ups: crime strikes Venezuela’s oil industry

MARACAIBO, Venezuela When night falls over western Venezuela, armed gangs known as "pirates" sometimes ride boats into muggy Lake Maracaibo to steal equipment from oil wells. In the country’s Paraguana peninsula, opposite the Caribbean island of Aruba, slum dwellers at times break through a perimeter wall into Venezuela’s biggest refinery and rob machinery, construction tools, and cables to sell as scrap. On the other side of the OPEC country in Monagas state, around 26,000 potential barrels were lost in March during a shutdown after state oil company employees and contractors stole copper cables and caused a tank to overflow. Venezuela’s national crime pandemic – the United Nations says the country has the world’s second-highest murder rate after Honduras – is a growing headache for the oil industry, which accounts for nearly all of the country’s export revenues. Hold-ups and thefts in the sector are on the rise, taking a […]

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Venezuela’s Maduro Faces His Biggest Test in December 6 Vote

Venezuelan President Nicolas Maduro. Photographer: Federico Parra/AFP via Getty Images Venezuela’s opposition is set to gain control of congress for the first time in 16 years in a Dec. 6 vote seen as the biggest test yet for the Socialist government of President Nicolas Maduro. Official campaigning to choose all 167 members of the National Assembly will take place from Nov. 13 to Dec. 3, the head of national electoral council Tibisay Lucena said in a televised speech Monday. Opposition candidates would get 56.2 percent of the vote, compared to 29.8 percent for the ruling United Socialist Party of Venezuela currently in charge of the Assembly, according to the latest Datanalisis survey of 1,000 people. The May 18-30 poll had a 3 percentage-point margin of error. “We will be in a situation with an already weak president weakened further by a defeat in the election,” Barclays Plc analyst Alejandro […]

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Venezuela sets date for elections after mounting pressure

AP Photo/Fernando Llano CARACAS, Venezuela (AP) — Venezuela will hold legislative elections Dec. 6, election officials announced Monday after months of mounting pressure from local opposition groups and international observers. The South American country’s laws mandate that National Assembly balloting be held this year, but elections officials had delayed setting a date, raising concerns the contest would be canceled. In her announcement, elections council head Tibisay Lucena said the organization had always intended to set a date and was not reacting to public pressure. "These attacks and phony analyses from national experts and international figures have mostly been very ignorant," she said. The date is timed to commemorate the first election of the late President Hugo Chavez, who launched the country’s socialist revolution when voters chose him overwhelmingly on Dec. 6, 1998. The ruling socialist party currently holds a majority in the legislature, but polls indicate that if the […]

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Big Investors Shun Venezuela’s Flagship Oil Industry Event

Jun 19, 2015 Venezuela’s biggest annual gathering of oil investors used to be a memorable affair: thousands of oilmen from around the world would arrive, greeted by statuesque models, and attend whisky-fueled after-parties. The deal-making could run into the billions. This year’s event was a far cry from previous years’ bashes, where hordes of investors would clamor for a stake in the country with the world’s largest oil reserves. “It used to be much bigger,” lamented Hugo Hernández, a former head of the Venezuela Petroleum Chamber, reminiscing about the days when 40,000 participants would show up. “You know how the situation is in the country. Now many people don’t come.” Organizers said slightly more than 3,000 people visited the expo this week, including hundreds of workers from state oil giant PDVSA. Among the notable absentees were many of Venezuela’s foreign production partners. Of the more than 30 multinationals that […]

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Refining Magnate O’Malley’s PBF Soars on Exxon-PDVSA Deal

PBF Energy Inc. surged a record 14 percent after agreeing to buy a Louisiana crude refinery jointly owned by Exxon Mobil Corp. and Venezuela’s state-controlled oil company. The transaction, valued at $322 million, will increase PBF’s refining capacity by more than one-third and marks the Parsippany, New Jersey-based company’s first foray into the Gulf Coast, the biggest U.S. crude-processing region. It “represents a significant step in the strategic growth of PBF,” Chief Executive Officer Thomas Nimbley said in a statement on Thursday. Executive Chairman Thomas O’Malley, a former oil trader, has spent the last quarter century amassing refining assets and selling them at a premium to bigger operators. Today’s purchase involves a 189,000 barrels-a-day refining and chemicals plant in the New Orleans suburb of Chalmette, as well as a patchwork of related pipelines and storage facilities. PBF climbed to $29.97 at the close in New York in the biggest […]

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