Energy
January 05

Pdvsa's refining capacity tumbled 5.6 percent
State-owned oil company Petróleos de Venezuela (Pdvsa) processed less crude in the domestic and international refining circuits. Based on the operational and financial report released by the holding, the total volume stood at 2.41 million bpd of oil between January and September 2008.

The figure represents a 5.6 percent drop compared to the same period in 2007, when it was 2.55 million bpd.

Oil prices rise above USD 47 on Gaza tensions, Russia gas row
Oil jumped to a three week high on Monday, January 05 after an Iranian military commander called for an oil boycott over Israel's offensive in the Gaza Strip, and as the Russian gas export row stoked fears for European energy supplies.

An OPEC source told Reuters that the Iranian call would not sway other members of the Organization of Petroleum Exporting Countries (OPEC).

A strong start to the new year for stock markets, mounting evidence of OPEC's compliance with production cuts, and the US Energy Department's decision to start rebuilding its crude reserves have also helped oil to a third day of gains.

Oil prices have climbed more than 25 percent since Israel launched its Gaza offensive on December 27.

Chávez: Venezuela not to fall to any crisis even "with oil prices at zero"
Even if oil prices continue declining, Venezuela has resources available not go in economic crisis, said President Hugo Chávez during a rally to promote the amendment to the Constitution for indefinite reelection.

"Petty Yankees' spokespersons, no matter if you put oil prices at zero, Venezuela will not go in crisis," said the president.

Chávez said that while Venezuelan oil prices went under USD 30 in December, they recovered up to USD 36.7 a barrel and "are going upwards."

"I would rather recommend them praying for here not to come the hurricane of the global crisis. They would be the most harmed, not the people or the socialist revolution. The crisis is the result of capitalism instead of socialism."

Citgo discontinues fuel oil program for the poor in the US
Company Citgo, a subsidiary of state-oil holding Petróleos de Venezuela (Pdvsa) based in the United States, discontinued a funding program of heating oil for low-income families, reported on Monday, January 05 Citizens Energy, a charitable organization that contributes to this initiative.

In a press release, Citizens Energy Corporation Chairman and President Joseph P. Kennedy II reasoned that Citgo was forced to reassess all its social programs, including distribution of heating oil due to "falling oil prices and the world economic crisis," Efe quoted.

January 06

Oil workers on alert due to impact of economic crisis
Although northeastern Anzoátegui state's oil trade unions support the constitutional amendment proposed by the Venezuelan government to establish indefinite reelection of public officials, they have warned President Hugo Chávez that they will not accept the dismissal of workers in different areas of the state-owned oil company Petróleos de Venezuela (Pdvsa).

Raúl Párica, the secretary general of the oil trade union Sinutrapetrol, said that the cut of oil production and the drop in oil prices should lead to a wise and understanding attitude to avoid the removal of thousand workers, as has occurred ever since last December in the western state of Zulia and the eastern city of Anaco in Anzoátegui state.

Párica added that in the government there are people interested in creating problems. They do not want to implement the measures of a socialist revolution and are keen to dismiss workers due to the crisis that is going to worsen this year.

Pdvsa's earnings drop 7 percent in third quarter of 2008
The latest financial accounts of state-run oil holding Petróleos de Venezuela (Pdvsa) are enough to think that the world crisis already lashed the country.

Pdvsa's net earnings came from USD 2.8 billion in the first quarter of 2007 down to USD 2.6 billion during the same term last year. This shows an inter-annual decline of 7 percent in the oil business revenues, that is, USD 197 million stopped entering the coffers of the state holding.

January 08

Citgo keeps heating oil program for the poor in the US
Citgo Petroleum Corporation, the US refining unit of state-run oil company Pdvsa, announced it will keep supply of subsidized heating oil for poor US households. Alejandro Granado, the chief executive officer and executive director of Citgo made the announcement in a news conference held in Boston on Wednesday, January 07 together with Joseph P. Kennedy II, Citizens Energy Corporation Chairman and President.

"This decision is the result of a strong commitment and a big effort on the part of Citgo and our shareholder (Citizens Energy), in light of the current global financial crisis and its impact on the oil industry in general," said Granado according to a press release issued by the Venezuelan Embassy in Washington.

Due to the decline in oil prices, this subsidiary of Pdvsa, which in 2008 donated heating oil to some 200,000 low-income households in 23 US states, had decided to curb all of its social programs, including the heating oil initiative.

Strategic value of fuel grant to the US is reckoned
Venezuelan President Hugo Chávez will continue giving heating oil to US poor families, an onerous decision that shows that the president is ready to keep his word and sustain his image, despite falling oil prices.

Citgo Petroleum Corp, a subsidiary of state-run oil holding Petróleos de Venezuela (Pdvsa) based in Texas, reported last Wednesday that the program will be effective. Two days earlier, non-profit organization Citizens Energy, based in Boston, said that Citgo had discontinued the fuel shipments in view of the economic crisis, AP reported.

"Chávez realized it was a mistake," said Larry Birns, director of the Council of Hemispheric Affairs, based in Washington. He added that Citgo's agents probably recommended the head of state the measure. However, the impact had not been considered until the president saw the reaction.

Oil to average USD 56 in 2009 due to global recession
The prices of oil will probably average USD 56 / barrel this year, a drop of almost half the average last year and about USD 2 below the forecast of just two weeks ago, as the global economic recession gets worse.

The forecast, agreed by consensus by 32 analysts queried by Reuters from January 5-7, found that the US crude oil will average USD 56.20 a barrel in 2009, and London's Brent USD 54.95, compared with USD 58.48 and USD 57.21, respectively, ending December.

The analysts had not choice but lowering their forecast of oil prices since August, just before the global financial crisis entered its most dangerous stage. The US benchmark crude oil traded around USD 43 on Thursday, January 08 after reaching last July an all-time high of more than USD 147.

Plunging oil prices signal the end of an era of low taxes
Pressed by sinking oil prices, President Hugo Chávez said on December 27th: "The first days of January I am going to give some economic news," and disclosed that the main goal was to "increase income by means of non-oil exports."

The possibility that the enormous dependence on oil, a good that yields 93 out of 100 dollars of the income, will diminish fast in an scenario where investments dropped by 2.1 percent in 2008 and the currency is extremely overvalued, seems virtually impossible. Therefore, the government weighs the introduction of new taxes.

Financial sources explained that the Executive Office is thinking about a new tax of 2 percent for payments with credit cards, debit cards and electronic transfers, signaling the end of the era of cheap taxes.

January 09

Venezuelan oil sales to the US down to 861,000 bpd
Venezuela' Ministry of Energy and Petroleum warned refiners that, as part of a pledge of the Organization of Petroleum Exporting Countries (OPEC) to reduce oil supplies as of January 1, state-run oil holding Pdvsa has cut production by 189.000 barrels per day to meet OPEC quota. As a result, the company is reducing shipments of crude oil to refineries in the United States by 166,000 barrels per day.

Exports of crude oil to the US have been declining ever since the second half of 2008. At the end of October last year, exports stood at 1.02 million bpd. Deducting the barrels that Venezuela will no longer export under the OPEC cut, exports to the US are to total 861,000 bpd.

Such volume is to remain in place during the first quarter this year or until OPEC decides to lift the production cut. According to oil industry sources, Venezuela is cutting 18,000 bpd from exports to China and 5,000 bpd from sales to Europe.

Venezuelan oil basket closes the week at USD 37.62
The price of the Venezuelan oil barrel ended the week of January 5-9 at USD 37.62, reported the Ministry of Energy and Petroleum on its website.

In this way, the domestic basket started the year with an average below the goal of USD 60 in the national budget for the next 12 months.

"Prices ended up on average, mainly influenced by concerns about oil supplies from the Middle East, in view of the armed conflict between Israel and Palestine; lower supply of crude oil from the Organization of Petroleum Exporting Countries (OPEC), in keeping with the cuts agreed upon, and discontinuance of the natural gas supply from Russia to Ukraine."