Interview: The Ambassador to Venezuela
>> welcome back. venezuela’s congress approved higher royalties for oil companies such as exxon-mobil and chevron as president hugo chavez seeks a bigger share of industry profits. joining us to talk about this and other issues impacting the country is venezuela’s ambassador to the u.s., bernardo alvarez. the ambassador joins us from washington, d.c. welcome, mr. ambassador.
>> how are you?
>> i’m very well, thank you. let me start by asking you, why did venezuela increase royals to more than―royalties to more than 33% to be paid by all oil companies operating in your country?
>> basically, because the basis of any good oil policy is the notion of equilibrium. what the fiscal revenue for the owner of the natural resources is and also what is the participation of the company. it was clear imbalance in venezuela over the past years so it was everybody understood that it’s a sovereign country, we should increase the royalties to go back to equilibrium.
>> are you concerned that higher royalties will drive u.s. oil companies like exxon-mobil and chevron, both of which are shareholders in vensn oil vent―venezuelan oil ventures, out of your country?
>> i think it’s not accurate because chevrontexaco, they have agreed, they have negotiated with us. we had a process of negotiation of oil contracts, new contracts, and they participated and agreed and all those companies have agreed to pay more taxes. imagine that in some of those projects companies were paying 1% of royalties with prices at $60. so it didn’t make any sense. so chevron is participating with us, is a very good partner for venezuela. we don’t have any problem with chevrontexaco at all. and exxon-mobil, keeps working with us in some of the projects. in several contracts, they sold their shares to other international companies. but basically we haven’t had any problem with international oil companies.
>> the c.e.o. of b.p., john brown, told bloomberg a week ago that simply the 33% royalties will drive investors away. doesn’t that concern you?
>> well, this is the opinion of mr. brown. b.p. is still working with us and they are interested in participating more in the new projects. so this is not what we heard from them in venezuela. but anyway, there are different companies from different parts of the world, in the process of competition among themselves. i would say that as i said to you at the beginning, it was a completely unbalanced situation we had in the past in venezuela so everybody understands there should be a process of balancing the interests of companies, the interests of consumers but also the needs of the―fiscal needs of the owner of the natural resources. i mean, the countries.
>> on the subject of iran, reports this week that venezuela rejects the notion of iran as a terrorist state. the u.s. subsequently, as you know, slapped an arms ban on venezuela. what impact does this have on your country?
>> actually, what we have said is that venezuela complies, venezuela has never encouraged, never used terrorism in its domestic or international policies. there is no one presenting any evidence of venezuela doing anything regarding terrorism. there is no international organization whatsoever who has any problem, any claim about venezuela participating in terrorist activities. so sometimes we feel this is only a matter that concerns some people in the state department. so we don’t qualify countries. we are against any kind of terrorist act and this is why, for example, we have been asking for over a year the u.s. to extradite a terrorist, venezuelan citizen accused of bombing a cuban aircraft back in 1976 and he has been in this country for one year, we have asked the u.s. government to extradite, according to a treaty we have with the u.s. and we don’t have a response.
>> mr. ambassador, we’ll have to leave it there for time constraints. thank you very much for joining us.
>> thank you.
>> bernardo alvarez is the ambassador from venezuela to the united states. back in a moment.
点击播报
Listen On the market--Suzy (fast)
NYSE---Allan (fast)
NYSE market --- Julie (slow)
Nasdaq --- Robert (slow)
>> and good morning, everybody. this is “ on the markets .” i’m suzy assaad. your top stories this monday morning, it’s the nyse which is making a bid for europe’s second biggest exchange. the board of the paris-based euronext is meeting today to weigh in on the $10 billion proposal. and the rival bid from the deutsche boerse. and appliance sales helped to the biggest profit gain in over three years and lowe’s raised us earnings outlook for the full year. the u.s. could be in for some stagnation, at least according to some economists who see a growing risk that inflation will accelerate at the same time that the fed tightening policy is starting to slow growth. as for the major markets here, hay continue to―they continue to sell off as the sell-off did act―is accelerating from the open today. we’re seeing a 1% decline on the nasdaq right now half a percent on the s&p and the dow is down .3%. the rest of the markets , we are seeing buying action going on in the bond markets today. the 10-year treasury note up 5% even. emerging markets have been selling off and you’re seeing a migration from the e.m. world into the safety of the treasury markets here in the u.s. the two-year note is giving a yield of 2.92. dollar/yen is up over 112 this morning and the euro is rising to 1.28. gold though is selling off, down half a percent while silver advances 1%. platinum is down almost 2% so far this morning. and the top story that we’re watching today, among them is the new york stock exchange group which is making a $10 billion bid for europe’s number two stock exchange. our own alan dodds frank is giving us more on that.
>> it is an attempt to build what new york stock exchange’s c.e.o. john thain says is a global conference market .
>> we’re very excited about this transaction which will create a new company, nyse euronext. really it satisfies our vision of building the world’s first truly global marketplace. our market will be multiproduct, multicurrency, multitime zone, geographically diversified, truly global.
>> the nyse bid comes against the backdrop of nasdaq making an offer for the london stock exchange and the deutsche boerse trying to take over euronext, the second largest trading platform. the shareholders will be there at the annual meeting to consider the competing offer. that offer is 4% below the closing price for euronext last friday. today, euronext is down four euros or $5. keep in mind, shares of euronext have run up 20% over the last few months on speculation of a deal. during the conference call, thain talked about the deal as though it’s practically done. although he conceded there is little the nyse can do to prevent a competing offer. in other words, the deutsche boerse deal is still in play and some nyse shareholders are unhappy about the possibility of buying euronext. the deal could create more than $250 million in savings by combining electronic trading capabilities and he also said the combination would enable the nyse to add new products, especially in derivatives and futures. under the deal, the european operations would still be run by euronext and would trade u.s. equities in euros. overall, the deal would combine seven exchanges in six countries and even if the deal g goes through it is not expected to be completed until next year.
>> thank you very much. in the meantime, as the markets do take a tumble now, let’s check in with robert gray at the nasdaq, we’re watching his index go down .8%. and julie has more on the nyse offer and the stocks on the move today. julie?
>> thanks, suzy. well, i have been talking to the floor traders here, folks who are now shareholders who were once seat holders about their reaction to this deal, this potential deal. most the folks i talked to are fairly satisfied with the fact that the offer has been made. the main concern among the folks i surveyed was that the offer could be too high. they were saying this before the actual number came out. but nonetheless, we have seen the euronext shares really surge this year to date, but also they have more than doubled over the past 12 months. i talked to folks like randy post who is a floor broker here. he thought that if this euronext offer was john thain’s likeliest move and he says it’s natural move but he was concerned like the others about overpayment. if you look at price to book, that is one measure of how you value these various exchanges, euronext is more lower valued at a lower value than some of the other major exchanges. if you look at euronext, it’s valued at 4.6 times book, and the nyse 6.8 times book. if you look at the nasdaq and l.s.e., there’s takeover talks surrounding them, nasdaq 5.6 times book and l.s.e., 10.3 times per book. caldwell securities owns 3 million nyse shares and he says it looks like a marriage of equals but under no circumstances is it a marriage of equals. i do see them as the equal of the new york stock exchange. that’s something that the shareholders have been talking about, that the two have a comparable market value, but on the other hand, the nyse has the biggest names, more of a reputation in the world of exchanges. so therefore, it has a higher currency when it is dealing with active issues here. let’s find out what’s going on at the nasdaq and send it to robert gray.
>> off the lowest levels of the session, but down .7% still in today’s session. we are seeing the selling continuing. suzy talking of the emerging markets positions being unwound. if you look at some of the exchange traded funds, you can see the likes of the india fund, south koreaing lower in today’s session. we have latin american markets . they’re moving lower. the exchange traded funds all moving lower as well. reflecting that a lot of the traders use the vehicles to trade the markets as well. we also have some more concern, fallout from stock options granting juniper, related to the stock option granting. they said they received request from the usda in eastern new york and said they’ll fully cooperate. trident is falling on the stock option pricing practices and the company saying that the article does not offer any evidence of wrongdoing and referred it to the audit committee for review. another company, saying they paid two batches of stock options at a time when the options were particularly advantageous. suzy, back to you.
>> thank you very much. when we continue, emerging markets , their longest losing streak in years.
