LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Tuesday, October 22, 2019 BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group ECONOMIC Devry Boughner Vorwerk Will Venezuela’s US Renews Waiver CEO, DevryBV Sustainable Strategies Allowing Firms to Joyce Chang Global Head of Research, Opposition Retain Work in Venezuela JPMorgan Chase & Co. The license allows Chevron and Paula Cifuentes four other U.S. oil services firms Director of Economic & Fiscal Affairs, Control of Citgo? to work in Venezuela despite Latin America & Canada, Philip Morris International sanctions against the government Marlene Fernández of President Nicolás Maduro. Corporate Vice President for The waiver was set to expire this Government Relations, Friday. Arcos Dorados Page 2 Peter Hakim President Emeritus, Inter-American Dialogue POLITICAL Donna Hrinak President, Boeing Latin America Violence Breaks Jon E. Huenemann Out in Bolivia, Former Corporate and Government Senior Executive Election Contested James R. Jones Violent protests erupted Monday Chairman, night in nine cities across Bolivia Monarch Global Strategies Venezuela’s opposition-controlled National Assembly appointed a new Citgo board of directors amid confusion over the result of Craig A. Kelly (pictured above) earlier this year. // Photo: Citgo. Director, Americas International Sunday’s presidential election. Gov’t Relations, Exxon Mobil Page 2 John Maisto A U.S. appeals court last month lifted an impediment that Director, U.S. Education had frozen efforts by defunct Canadian gold miner Crys- Finance Group POLITICAL tallex to take control of Citgo, Venezuelan state oil company Nicolás Mariscal Trudeau’s Party Chairman, Q PDVSA’s U.S.-based refiner. The ruling marks a defeat for Grupo Marhnos opposition leader Juan Guaidó and his allies, who have been fighting to Secures Minority Thomas F. McLarty III Chairman, prevent creditors from seizing Citgo since taking effective control of the Government McLarty Associates company from President Nicolás Maduro’s government. Moreover, if the Canadian Prime Minister Justin Carlos Paz-Soldan Trudeau and his Liberal Party on opposition fails to make a $913 million payment on a 2020 PDVSA bond Partner, Monday held on to just enough DTB Associates, LLP due on Oct. 27, creditors reportedly could attempt to seize the company. seats in Ontario, Quebec and the Beatrice Rangel Atlantic provinces to win a minori- Director, What does the court’s ruling mean for Citgo and for Venezuela? How AMLA Consulting LLC likely is Crystallex to successfully take control of the U.S.-based refiner, ty government. With some ballots yet to be counted, the Liberals Jaana Remes Partner, and is it expected to put the Citgo shares up for sale, as it has stated it appear to have won 156 seats. McKinsey Global Institute would do? Is the opposition likely to complete the upcoming payment, Page 2 Ernesto Revilla and what would happen if it fails to do so? Head of Latin American Economics, Citi Gustavo Roosen Chairman of the Board, Luisa Palacios, chairwoman of Citgo: “In terms of Crystallex, Envases Venezolanos we believe the lifting of the stay by the Third Circuit does Andrés Rozental not change the underlying situation with Crystallex’s claims, President, Rozental & Asociados which remain stayed by an order of the United States District Shelly Shetty A Court. More importantly, Crystallex does not presently have a license from Head of Sovereign Ratings, Latin America, Fitch OFAC, without which it cannot seize or sell the stock in question, and we Roberto Sifon-Arevalo do not expect that to change. This case continues to work through the Managing Director, Americas Sovereign & Public Finance Ratings, appeals process, which means it can still be reversed. The Third Circuit Standard & Poor’s just requested a briefing from Crystallex on why it should not rehear the Trudeau // File Photo: @Justin- case en banc. For those reasons and others, we do not see any near-term Trudeau via Twitter. Continued on page 3 COPYRIGHT © 2019, INTER-AMERICAN DIALOGUE PAGE 1 LATIN AMERICA ADVISOR Tuesday, October 22, 2019 POLITICAL NEWS victory late Sunday, telling supporters that the NEWS BRIEFS votes still to be counted would be enough to Violence Breaks Out give him the win. “The people again imposed Trump Extends Venezuela their will,” he said. The U.S. State Department Sanctions Waiver for in Bolivia as Election accused Bolivian authorities of trying to subvert the vote, and an observer mission from Oil Companies Result Contested the Organization of American States expressed The administration of U.S. President Donald concerns about the counting process, The Trump on Monday renewed a wavier that allows Violent protests erupted Monday night in nine Washington Post reported. Being forced into several oil companies to continue operating in cities across Bolivia amid confusion over the a runoff would be a sharp blow to Morales, Venezuela despite U.S. sanctions against the result of Sunday’s presidential election, La “whose political success has been impressive, regime of President Nicolás Maduro. The U.S. Razón reported. The most damage was report- and who seemed confident of a first-round win,” Department of the Treasury said five compa- ed in Potosí, Oruro, Tarija and Chuquisaca. In Michael Shifter, president of the Inter-American nies—Chevron, Halliburton, Schlumberger, Bak- Potosí, two people threw themselves off the Dialogue, told The Washington Post. er Hughes and Weatherford—could continue second floor of the offices of the Departmental operating in the country. The license was due Electoral Court (TED) to save their lives after Canada’s Trudeau to expire this Friday, but the Trump administra- protesters set fire to the building, according to tion decided to extend it through Jan. 22, 2020. the report. The vote count was suspended in Ekes Out a Win, Loses La Paz, Oruro, Potosí, Chuquisaca and Tarija. In the capital of La Paz, supporters of President Seats in Parliament Evo Morales and his closest rival in the race, JetBlue Reports Lower Carlos Mesa, tried to enter the hotel where the Justin Trudeau and his Liberal Party on Monday Earnings on Latin held on to just enough seats in Ontario, Quebec America Disruptions and the Atlantic provinces to secure a minority New York-based JetBlue Airways said today With 95 percent of the government, CBC reported. With some ballots that disruptions in its operations across yet to be counted, the Liberals appear to have votes counted Monday Latin America and the Caribbean hurt its third won 156 seats, 21 fewer than they started quarter results. “Our Latin and Caribbean fran- night, Morales led with with before the election. The Conservatives chise was impacted by disruption in multiple 46.8 percent. moved up from 95 seats to an estimated markets,” said Joanna Geraghty, JetBlue’s pres- 122, while the left-of-center New Democratic ident and chief operating officer. The company Party, or NDP, lost 15 seats to end up with said third quarter revenue per available seat members of the Supreme Electoral Tribunal, or 24. The Conservatives likely won the popular mile declined nearly 1 percent, year over year, TSE, were coordinating the vote count, clashing vote, taking 34.5 percent of the vote to the while operating expenses increased slightly with police. In Oruro, a Morales party campaign Liberals’ 33 percent. Conservative turnout and over the period. office was burned, and the police gassed support was very high in the prairie provinces. protesters. Bolivian Interior Minister Carlos In Alberta, the Conservatives won almost 70 Romero accused the opposition of trying to percent of the popular vote to the Liberals’ 14 create turmoil and warned that Mesa would be percent, while in Saskatchewan, the Conserva- Shell Sells Stake in Brazil held responsible. “Violence can generate dire tives won 65 percent of the vote to the Liberals’ Pre-Salt to Ecopetrol consequences for people, institutions amd 10 percent. “Tonight Conservatives have put Colombian state oil firm Ecopetrol has reached public and private goods,” he warned. Election Justin Trudeau on notice,” said Andrew Scheer, an agreement with Shell Brasil to acquire 30 officials abruptly stopped releasing results Trudeau’s rival in the race. “And Mr. Trudeau, percent of interests, rights and obligations in hours after the polls closed Sunday. As of early when your government falls, Conservatives two areas in the Gato do Mato discovery in Tuesday morning, results showed Morales top- will be ready and we will win,” he added, Fox Brazil’s pre-salt area, Ecopetrol said Monday. ping the eight other candidates and just barely News reported. Polls showed Scheer had Under the deal, Shell will cut its stake from 80 reaching the 10 points needed to avoid what a chance of victory after a combination of percent to 50 percent but will continue man- would have been the first runoff in his nearly 14 scandals and unmet expectations damaged aging operations. French company Total will years in power, The New York Times reported. Trudeau’s prospects. Trudeau, who will likely maintain the remaining 20 percent stake in the Morales led with 46.8 percent to Mesa’s 36.7 have to work with the Conservatives to pass Gato do Mato shared production agreement. percent, with about 95 percent of the votes any major legislation, has pushed for securing Light hydrocarbons have been found in three counted. The president had claimed an outright the United States-Mexico-Canada Agreement to wells in the two blocks, Ecopetrol said. COPYRIGHT © 2019, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ADVISOR Tuesday, October 22, 2019 replace NAFTA, the North America Free Trade ton has found that the United States was the buildings were set ablaze, including an office Agreement, which remains mired in the U.S. primary source of weapons used in crime in of energy company Enel Chile, the Associated Congress.