Category Archives: Venezuela

Sudden Plunge in #Venezuela Reserves Alarms Creditors @Business

BofA estimated Venezuela had $77bn of assets available for sale or securitization at the end of the first quarter, down from $81 billion in 2014.

Venezuela’s reserves are dwindling after the price of oil, which accounts for 95 percent of the nation’s export revenue, fell 44 percent in the past year. Traders now see a 44 percent chance the country will default in the next year, the highest in the world and up from 34 percent a month ago.

Facing an ever-worsening shortage of hard currency, President Nicolas Maduro has pulled an average of $65 million a day from central bank reserves since the end of March.

Read the whole article online on Bloomberg here:  The Sudden Plunge in Venezuela Dollar Reserves Alarms Creditors – Bloomberg Business

Sharevar addthis_config = { ui_cobrand: “The MasterFeeds”}

The MasterFeeds


Syria: Al Assad Reportedly Considering Seeking Asylum In Latin America – Stratfor

Syria: Al Assad Reportedly Considering Seeking Asylum In Latin America

December 5, 2012 | 1416 GMT
Syrian President Bashar al Assad is considering seeking political asylum in Latin America for himself, his family and his associates if forced to flee Damascus, an unnamed source in Caracas said Dec. 5, Haaretz reported. Syrian Deputy Foreign Minister Faisal al-Miqdad held meetings in Cuba, Venezuela and Ecuador over the past week and delivered classified personal letters from al Assad to local leaders, the source said.

>Venezuela No Longer to Certify Oil Export and Production Numbers


21st century socialism at work.  From The Devil’s Excrement

Venezuela No Longer to Certify Oil Export and Production Numbers

March 30, 2011

Mas bien, Sin Rumbo

Just when Venezuela needs to send positive signals to world markets, as it intends to sell more and more debt internationally, the Venezuelan Government and PDVSA do exactly the opposite and decide to cancel the contract with the independent auditor Inspectorate that was hired two years ago to try to convince the world that Venezuela’s production and export numbers as reported by OPEC and the IEA are wrong. Both of these institutions have been reporting that Venezuela’s official oil numbers are significantly above those obtained by them from their independent analysis.

Neither PDVSA nor the Ministry of Energy and Oil gave much of an explanation for the cancellation of the contract. The auditing company is closing its offices in Venezuela.
What this will do is create further uncertainties in the country’s numbers which will not aid in reducing the so called credit risk of Venezuela at a time that the country needs to issue more and more debt. This means that issuance of the country’s debt will be more costly that the country’s numbers justify. Last week, Knight Securities suggested that the country’s handling of official news and statistics and the lack of a clear spokesman for the country on financial matters is making it more expensive for the country to issue debt. In a report entitled “The Monk’s exorcism boosts our faith in Venezuela” the company suggests it costs Venezuela 200 to 300 bps because of the way information is managed by Minister Giordani.
In the same report, PDVSA said that exports in February were 16% lower than those in January and this week international reserves at the Venezuelan Central Bank dropped to their lowest level since 2007, despite the Venezuelan oil basket averaging over US$ 100 per barrel last week.

Venezuela No Longer to Certify Oil Export and Production Numbers « The Devil’s Excrement

Sharevar addthis_config = { ui_cobrand: “The MasterFeeds”}

The MasterFeeds

>Bolivarian Arbitrage The Devil’s Excrement


 Bolivarian Arbitrage The Devil’s Excrement

I- The Question

I have been getting some emails asking about why it is that the PDVSA bond issued last week, the so called PDVSA 2022, has a price that is so much below the identical Global 2022 Venezuela bond issued by the Republic last summer.

II.-Bonds in general

But to understand why this is relevant, let me start at the beginning: Typically, when a country or a company issues a bond, it has a price and a yield to maturity which depends on the perceived “risk” associated with the issuer. Such a bond is simply a promise that I will pay the annual payments, the coupon, and at maturity, the day the bond ends, you will get 100% of the nominal or face value of the bond.

III.- Venezuela’s bonds and risk

Venezuela currently is perceived as being high risk, in fact, very high risk. There are two reasons for that, one is simply political, the feeling that one day Hugo may wake up and decide not to pay the country’s debt. The second one is that Venezuela has been issuing more and more debt and at some point this can’t go on, the country has to pay at maturity, as well as the increasing annual or coupon payments to the bond holders, which are already near US$ 5 billion per year.

As this risk has increased over the last few years, this coupon has gotten higher, meaning that the country or PDVSA has to pay more to convince someone to buy your bond. As an example, in 2009, PDVSA issued bonds maturing in 2014,2015 and 2016 with coupons around 5%. That means that if you hold $100,000 of the bond PDVSA has to pay you $5,000 per year and then at maturity give you back your money.

IV.- How Venezuela issues bonds

This is where things get complicated. Because of exchange controls, these bonds are not issued internationally, where they would trade very close to each other, but instead are sold to Venezuelan individuals or companies for Bs. That is, you pay so many Bolivars for each dollar face value of the bond at Bs. 4.3 per US$, but you know based of the coupon, that the bond will not trade at 100%, but at a lower value.


Because Venezuela would have to pay coupons of 14-16% for the bond to trade near 100% if issued in US$ directly. Instead, what the Government or PDVSA do, is to set a lower coupon, knowing that the bond will trade below 100%. Thus, if you are a Venezuelan and you pay say Bs. 4,300 per $1,000 of a bond that should trade around 70%, you buy it, sell the bond for 70% of its face value (You get $700) and then you are simply buying dollars at Bs. (4,300/700) or Bs. 6.14 per US$.

Since exchange controls are so strict now, people love these bond issues, because other than what the foreign exchange control office sells you at Bs. 4.3, there is no way for an individual to buy dollars as it is completely illegal to do so since last May. The same applies to companies. If the Government does not give them dollars for imports, they have to either use their own money or simply stop importing, it is illegal to buy foreign currency other than from the Government.

V.- The Venezuela Global 2022 bond

Last summer, Venezuela issued a bond maturing in 2022 (It actually matures in three parts, one third in each of 2020, 2021 and 2022) with a coupon of 12.75%. This is a very high coupon, very few companies or countries in the world issue at such high coupons. Even worse, these bonds trade at a discount in order to equilibrate with what investors expect from Venezuela. Last week, for example, this Global 2022 bond, as it is called, was trading at 88% of its face value just before PDVSA announced its bond. At that price it was yielding around 15.3%. The difference between coupon and yield is that coupon is what you get paid every year over the face value, yield to maturity is what your annual return will be if you keep the bond until it matures.

VI.- The PDVSA 2022 bond

And here is where the Bolivarian arbitrage and the topic of this post begins. You see, this week PDVSA announced an issue of a bond also maturing in 2022, also having a coupon of 12.75% and also having maturity in three parts in 2020,2021, 2022. That means the two bonds are identical. Given that PDVSA and Venezuela are so inter twinned, you would think they should have very similar prices and very similar yields. Right? Well, yes and no, because of all of the artificialities in the Venezuelan economy due to the controls, at the beginning of the trading of a bonds this does not happen. In time they will be very close, but it will take time.

In fact, last Thursday when the PDVSA 2022 began trading, it was being sold at 74% of its face value, while the Global 2022, essentially the same risk, same yield, same coupon, was trading at 86.4%, a full 12.4 points above the new PDVSA 2022 issue. Illogical. right?

VII.- The Bolivarian Arbitrage

You would think these two prices would become the same immediately, but they don’t. This is the Bolivarian Arbitrage, the subject of this post and the question I have been getting from readers: Why are they different, why doesn’t the gap close immediately? How can it make sense for Venezuela to be yielding 15.7% (same coupon, higher price of 86.4%), while an identical bond from PDVSA yields almost 19% (same coupon, lower price of 74%)? Aren’t markets “efficient”?

The answer is that this exists because of the dynamics of the bond sales by the Government and the banks. Eventually, the difference will close, but it will take time. Here is why:

Companies don’t want to buy the bonds, they want to get the dollars when they get the bonds and sell them. So, they go to a local bank and say: I will place an order with you, of say US$ 50 million, if you can guarantee a price for each dollar such that no matter what amount I get, the price will not change.

For the bank this is not easy. The client could be assigned zero of the bonds or it could be assigned the 50 million, the rules are never clear and vary from bond to bond. So, suppose that the bank expects the new bond to have a fair value of 82%, that means that each dollar costs (Bs. 4.3/0.82)=Bs. 5.24, but the company wants a guaranteed price, so you say I will pay you 70% for the bond, no matter how much you are assigned. This means, for the company, that the dollars will cost Bs. 6.14. This is a great deal in a country where there are no dollars to be had, so if your objective is to get dollars cheap, you are not very sensitive to the price, between not having access to any dollars or paying Bs 6.14 per US$, it is still a bargain. In fact, I bet most companies would pay even higher values, if they could get all they wanted.

VII.-Why the Government wants to sell cheap dollars

And here is another distortion. The Government knows that people would pay more, but it does not want to sell the dollars at a more expensive price (offering a lower coupon) because it wants to keep inflation down. Thus, it prefers to give away the dollars cheap, than to have the political risk of higher inflation. (Although in the end it is not as important for inflation as the Government thinks, it is mostly financing capital flight)

VII.- How local banks affect the international markets

But now, the bank has a problem. If six customers show up, each asking for a US$ 50 million guarantee of purchase, then the bank has undertaken US$ 300 million of risk, which could be dangerous. So, the bank measures how much risk it can take and starts selling these bonds in the international markets at say 74%, like the first day of the PDVSA 2022. It guarantees it will make a four point profit and lowers the size of its risk.

What is the risk? Well, the bank could have the opposite problem, that all customers are given nothing and then it has to go buy the bonds that it promised to deliver. Or that prices will go down because oil goes down or too many bonds hitting the market.

The problem is that these are huge issues for the markets, US$ 3 billion. To give you an idea, two weeks ago Petrobras issued the largest corporate bond in Brazilian history, a US$ 6 billion issue. PDVSA has issued US$ 9.15 billionsince last November! Thus, there is an over supply of PDVSA bonds and when the bank tries to sell US$ 100 million, there are only buyers at a low price, if there is no bargain, there are no big buyers.In time, prices will go up as the bonds leaving Venezuela are absorbed by the international markets.

This is the Bolivarian Arbitrage, another artifact of the distortions and complicated schemes the Government has built in around the exchange controls and the large and frequent issuance of bonds. These type of arbitrage has allowed many people in the past few years to make a lot of money, it was just not as obvious to the average person because the bonds were never identical like this time.

VIII.- Making money with the Bolivarian Arbitrage

Let me give you an example. Suppose you had a Venezuela 2010 bond in 2009 which you bought at 70-75% in the middle of the world financial crisis. In August of 2009, that bond was back up at 94% when PDVSA announced a Petrobono 2011 with no coupon. This 2011 bond came out at around 64%, you could have sold the 2010 and bought the Petrobono 2011. Then, PDVSA issued the PDVSA 2014, which was sold at around 56% when the Petrobono was already at 82%. Then, you could have sold the PDVSA 2014 at around 63% to buy the Global 2022 at 76%. In that sequence, ignoring interest, you would have made over 100% profit in less than two years and now you are ready to make some more money again, switching to the PDVSA 2022.

IX.- The risk of playing this game.

The risk, obviously is that one day you will not get paid if Venezuela decides not to pay and the bond will drop to around 30-35% of its face value, the so called recovery value. (That is why some people buy the long dated bond, which trade around 45%) You will lose a lot of money, in fact, you will lose all your gains. Of course, everyone assumes they are so smart that if that ever happens or comes close to happening, they will have no Venezuelan bonds in their portfolio by then. They did not expect Russia to default in the 90′s or Argentina in the new century. They both did.

Of course, that is what markets are about. Some think oil is going to soar. Others that the Government will change. Many that Venezuela can do this for a few years without defaulting. Everyone has a different opinion on it.

In the meantime, they will continue riding the Bolivarian Arbitrage.

X.- Why this is so crazy.

But this whole thing is absolutely crazy and it should not be this way. Venezuela’s risk premium is high because of the constant supply of bonds to the market and the non-transparent way in which things are done. If the Government set up a road map every year telling markets exactly how much it will issue and in roughly which part of the year, the risk premium would go down, the debt would not be as costly. Instead, after telling investors for weeks there would be no issuance in the first few months of the year, PDVSA surprised them with this bond. A road show abroad by the Government once in a while to explain its finances, would also not hurt either.

Additionally, there is no justification for the overvaluation of the currency in these sales. Venezuela has high inflation because monetary liquidity keeps going up and up while productivity goes down and down. It is the classic inflationary set up. But instead of attacking the real causes of inflation, the Government decides to sell these dollars cheap to those that have access to them. It is in the end a subsidy to the well to do and to foreign investors, who are as happy as can be investing in yields that are impossible to find anywhere else in the world.

But it is a crazy scam that will one day come back and get us. It is the Bolivarian Arbitrage.

Sent from my iPad

Seeking cash, Chavez looks to sell Citgo

Market Commentary and Intraday News

pre { white-space: pre-wrap; word-wrap: break-word; }

Seeking cash, Chavez looks to sell Citgo

2 hours, 1 minute ago

Associated Press
(AP:CARACAS, Venezuela) President Hugo Chavez is promising to build new public housing complexes, boost social programs and renovate the long-neglected Caracas subway _ and he needs money.

The ambitious plans will squeeze Venezuela’s coffers at a time when oil earnings have slipped and Chavez is sending his foreign allies generous amounts of crude on credit. So he has raised a possibility that once seemed remote: selling off Venezuela’s U.S.-based oil company, Citgo Petroleum Corp.

For Chavez, it’s an idea driven both by hard-money realities and by politics.

Getting rid of the company and its refineries in the U.S. would give Chavez billions of dollars for domestic spending as he approaches his 2012 re-election bid and seeks to remedy problems including an acute shortage of affordable housing. A sale would also fit with the leftist leader’s interest in distancing Venezuela from the U.S. while building stronger ties with allies such as Russia, China and Iran.

Citgo has delivered oil to Venezuela’s No. 1 client for two decades, but judging by Chavez’s complaints about Citgo not turning a profit, he seems more than ready to sell it, if a buyer can be found.

“Citgo is a bad business, and we haven’t been able to get out of it,” Chavez said in a televised speech late last month. He ordered his oil minister, Rafael Ramirez, to look at options for selling off the state oil company’s assets in the United States.

Chavez says the Houston-based company could be worth at least $10 billion, but analysts say it would likely fetch much less _ perhaps half that _ and it might be hard to find a buyer in a difficult economic climate.

The government’s budget next year _ not counting the additional spending often approved by Chavez’s congressional allies _ is the equivalent of $47.5 billion, making the possible sale of Citgo a potential shot in the arm for the president’s efforts to shore up support.

Critics say that selling Citgo could endanger Venezuela’s long-term business interests since oil is the lifeblood of the economy and much of the earnings come from the U.S.

Chavez, meanwhile, has increasingly sold oil elsewhere under less profitable deals aimed at cementing relationships with friends abroad.

“It’s hard for rational observers to understand that (Chavez) would take oil away from U.S. clients that pay cash for Venezuelan oil, in order to supply countries that consider Venezuelan oil almost as a right or as a political gift,” said Gustavo Coronel, an energy consultant and former executive of state oil company Petroleos de Venezuela SA (PDVSA). “However, Chavez is no longer driven by economics but by ideology.”

If Chavez were to go ahead with a sale, Venezuela would likely seek to negotiate a supply contract to keep selling crude to U.S. refineries.

Even so, Venezuela’s oil exports to the U.S. have been declining while Chavez has sought to diversify the country’s markets, shipping more crude under preferential deals to allies including Belarus, Cuba and other Caribbean islands. Some buyers are granted low-interest loans, decreasing upfront revenue.

Oil shipments to the U.S. declined from 49 million barrels in February 1999, when Chavez took office, to 31.9 million barrels during the same month last year.

Venezuela’s overall oil output has also been declining due to lower OPEC quotas and _ experts say _ inadequate maintenance at some oil fields. While Venezuela says it produces about 3 million barrels of oil a day, the U.S. Energy Information Administration estimates 2.2 million barrels a day in 2009, down about 190,000 barrels from 2008.

Coronel said that when Venezuela bought Citgo, it was a good deal. PDVSA purchased 50 percent of the company in 1986 from Southland Corp. for $290 million as part of a drive to have its own refineries and other facilities in its key markets, the U.S. and Latin America. The state oil company purchased the remaining 50 percent of Southland’s shares in Citgo in 1990 for $675 million.

Since then, Citgo has grown. It now operates three refineries in Texas, Louisiana and Illinois, and sells fuel through thousands of gas stations. Citgo has been used by Chavez to distribute discounted heating oil to poor American families in a high-profile program aimed at criticizing Washington’s approach to the needy.

Another motive for selling Citgo could be to reduce Venezuela’s exposure to U.S. court suits over Chavez’s expropriations of U.S. company assets.

U.S.-based Exxon Mobil Corp. has sought international arbitration to claim billions of dollars in compensation after it refused to accept the government’s terms for a 2007 nationalization of an oil project in which it had invested heavily.

Citgo, for its part, took a $201 million loss last year, and issued $3.5 billion in bonds this year as its profits plummeted. Profits were battered by lower world prices and a declining flow of heavy, sulfur-laden crude.

“I don’t think there would be much interest now” in buying Citgo, said Lou Pugliaresi, president of the Energy Policy Research Foundation, a Washington-based think tank. “But Chavez might find a buyer at the right price.”

None has publicly stepped forward yet. Exxon and other major U.S. refiners such as Chevron Corp. and ConocoPhillips might end up being interested in Citgo or some of its assets, said Guaicaipuro Lameda, a former PDVSA president and government critic.

“It has the potential to be a good business if it’s well managed,” Lameda said. “But it’s not being well managed, and that’s causing problems.”

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. News – Seeking cash, Chavez looks to sell Citgo

Sharevar addthis_config = { ui_cobrand: “The MasterFeeds”}

The MasterFeeds

Venezuela Pares China Debt With $20 Billion Oil Accord – Bloomberg

Venezuela Pares China Debt With $20 Billion Oil Accord

By Daniel Cancel and Corina Rodriguez Pons –
Aug 5, 2010 10:40 PM GMT 0200

Venezuela, the largest oil producer in South America, is shipping 200,000 barrels a day of crude to China to repay $20 billion of debt borrowed from the Asian nation to finance power, agriculture and technology projects.

The OPEC member, planning to ramp up China shipments to 1 million barrels a day by 2012, is selling oil at market prices to repay the 10-year loan, Oil Minister Rafael Ramirez said yesterday in an interview in Caracas. Shipments to repay the cash represent half Venezuela’s daily crude exports to China.

“We’re diversifying our export markets; our international policy is going in this direction,” Ramirez, also president of state oil company Petroleos de Venezuela SA, said at his office beneath paintings of Cuba’s Fidel Castro and Che Guevara. “We don’t cut prices in any of our international agreements.”

Venezuela is tapping Asian nations that need crude to fuel growth in their fast-growing economies for cash. President Hugo Chavez is seeking funds to restructure the country’s economy to provide more jobs for the poor and address power shortages.

China agreed to lend the Latin American nation $20 billion in April to finance development projects in return for future oil supplies. PDVSA, the state oil company, and China National Petroleum Corp., or CNPC, also signed a separate $16.3 billion joint-venture agreement this year for a project that will pump 1 million barrels a day of oil for Asian refineries.

Chinese Demand

The International Energy Agency projects China’s oil imports will almost quadruple by 2030 from 2006 levels. The nation’s oil use may average about 8.9 million barrels a day in the third quarter of 2010, up 9.5 percent from a year earlier, CNPC’s research unit said this week.

Venezuela is finalizing joint-venture projects with Italy’s Eni SpA and Petrovietnam and is in talks with Japanese companies including Itochu Corp. and Marubeni Corp. to develop the offshore natural-gas project known as Mariscal Sucre, the minister said.

PDVSA is also close to determining conditions to lease an offshore gas platform in waters near Trinidad and Tobago to replace the Aban Pearl rig, he said. The Aban Pearl sank on May 13 because of a faulty floatation system.

Ramirez, whose office is also adorned with a statue of South American liberation hero Simon Bolivar, said Venezuela operates two very large crude carriers with China and will start construction on a joint refinery at the end of this year in the Asian country. Venezuela is diversifying its export markets as Chavez distances himself from the U.S., the country’s largest trading partner.

Oil Shipments

Venezuela sent an average 1.01 million barrels of crude a day to the U.S. in May, down from a peak of 1.55 million barrels a day in 1998, one year before Chavez took office, according to theU.S. Energy Information Administration.

“Shipments to China are increasing, independent of what the U.S. does,” Ramirez said.

Venezuela has tapped the first $5 billion of the $20 billion credit line with China, which consists of $10 billion in U.S. currency and $10 billion in Chinese yuan, PDVSA said in a statement on July 29. Morgan Stanley, in an Aug. 2 report, said exports to Asia “may not be made at market prices, but rather at a discount.”

Chavez said in April that the credit line is the largest that China Development Bank Corp. has extended to any country. Trade between China and Venezuela surged to $8.9 billion in 2008 from $85.5 million in 1999, according to Venezuelan state bank Bancoex.

‘Savage’ Sanctions

Venezuela, which has forged close ties with Iran, isn’t currently supplying the Persian country with gasoline amid fresh economic sanctions from Europe and the U.S., which Ramirez called “savage” and “pre-war” measures.

“The shipments of energy to Iran haven’t been frequent,” he said. “Several occasional deliveries were made before the sanctions. At this moment we haven’t programmed any shipments, but it has nothing to do with the sanctions.”

Ramirez, 47, said that the government hasn’t received a formal request from BP Plc to sell its Venezuelan assets as part of a global divestment plan to raise as much as $30 billion for clean-up efforts in the Gulf of Mexico after the Macondo well oil spill.

PDVSA, which finances Chavez’s social programs, including adult education courses, food distribution units and other non- oil activities, saw its profit fall 53 percent to $4.4 billion in 2009 because of production cuts at the Organization of Petroleum Exporting Countries and a slump in prices.

‘Bolivarian Socialism’

Ramirez, who helped counter a two-month oil strike intended to oust Chavez from power in 2003, is also a leading member of the ruling United Socialist Party of Venezuela. Elevators at the Oil Ministry say “moving towards Bolivarian socialism” in electronic lettering next to the floor number.

“We aren’t a private company or a company worried about commercial criteria,” Ramirez said.

PDVSA has transferred $600 million in the first half of 2010 to the off-budget development fund known as Fonden after sending $577 million last year and more than $12 billion in 2008. The company plans to boost investment 27 percent this year to $16.5 billion for oil exploration and production, Ramirez said.

Venezuela, a founding member of OPEC, will maintain current crude production of 3.01 million barrels a day this year and doesn’t expect an output increase for the 12 country Vienna- based group, Ramirez said. The country aims to boost production to 4 million barrels a day in 2015, he said.

Rising Prices

Crude oil, which has averaged $78.27 a barrel this year, should rise further to within a price band of $80 to $100 a barrel, he said in the interview.

Crude oil for September delivery declined 46 cents today, or 0.6 percent, to settle at $82.01 a barrel on the New York Mercantile Exchange. Futures are up 14 percent from a year ago.

“We’re satisfied because the tendency is for oil to get closer to a fair price,” said Ramirez, wearing a dark blue suit and glasses. “We’re preparing our production capacity to be ready for when OPEC decides to increase our quotas.”

To contact the reporter on this story: Daniel Cancel in Caracas at;Corina Rodriguez Pons in Caracas at

FW: The Colombian Matinal Venezuela, Gold, construction

Here’s a quick summary from Colombia’s InterBolsa on the day’s (financial) news in Colombia

The Colombian Matinal
– Venezuela, Gold, construction
News of the day

Venezuela: After the complaint to the OAS, the president of Venezuela broke
diplomatic relations with Colombia, third time in recent history. Definitely
trade will be the most affected sector, but as this kind of issues has been
the constant for a decade Colombian companies have diversified its export
markets reducing their exposition to Venezuela. During the first five months
of 2010 exports to Venezuela decreased 71.4% YoY, imports 49.3% YoY, and the
trade balance -73.8% YoY.

Coffee: The National Coffee Growers Federation president forecasted that the
country will produce 14 million (50 kilos) sacs in 2015 from the current
production estimate of 10 million sacs in 2010. Renovation of 500,000
hectares will be the key to increase production.

Construction: The national bureau of statistics (DANE) informed that in May
construction licenses grew 2.1% MoM (housing +3.4%, other +1.6%), 40.3% YoY
and 19.6% YtD. In the monthly comparison licenses for offices increased
494%, commercial space 63.8%, and warehouses 44.9%.

Gold: Marc Cutifani, CEO of AngloGold Ashanti, affirmed that La Colosa could
be the gold discovery of the decade confirming the huge potential of
Colombia. La Colosa is in the exploration phase and could be in operations
in 2017. Key figures of AGA in Colombia: exploration 11 million hectares
since 2003, investment US$200 million (2003 – 2010), budget US$300 mm
(2009 – 2011), 34% of the global budget was invested in Colombia.

Business confidence: The business optimism continues to rise, balance of
2Q2010 this year is positive, the survey shows that today 60.4% percent of a
total of 1,128 employers surveyed by Datexco in 12 major cities ensure that
their views on the situation in the country is improving, while only 12%
believe things will get worse in coming months.
EEB (Empresa de Energía de Bogotá): The board of Directors proposed an
approx. US$110 million reduction of the common capital. This decision
requires the approval of the shareholders.