The Weekly Brief: Greater Caribbean


August 12, 2019 edition– Guatemala’s solar; Ecopetrol and Occidental’s partnership; and BHP’s investment.



Last Week in a Minute or Less


Central America. Drought hit hydroelectricity in Guatemala; Costa Rica is 100% powered by renewables; and two will fight over Guatemala’s solar auction.


Greater Antilles. Jamaica is considering Total’s acquisition of Epping Oil; Cuba’s renewables grow; and the Dominican Republic will bring light to 40,000 remote inhabitants.


Lesser Antilles. BHP okayed US$283m investment in Trinidad and Tobago; and a committee was appointed to evaluate the Petrotrin refinery sale.


South America’s Caribbean Coast. Ecopetrol and Occidental partnered up in Midland Basin; Apache prepares to spud a well in September; and US sanctions pressured Venezuela’s production and crude flows to Asia.


Déjà vu all over again. Last week’s readers were particularly interested in NuStar Energy’s sale (English); and PDVSA’s production of Orinoco crude (English).



Political Economy


Puerto Rico changed governors…twice. After Ricardo Rosselló’s resignation, his replacement, Pedro Pierluisi, was named governor and removed by the Supreme Court on constitutional grounds. Justice Secretary Wanda Vázquez has been sworn in as the new governor, promising to bring political stability (English).


South Korea and El Salvador sealed the trade deal. South Korea announced ratification of the free trade agreement with El Salvador, and Nayib Bukele celebrated the news (Spanish). The agreement was signed in February 2018 with the expectation to increase sugar, coffee, and clothing exports.


Bolton warned foreign governments over Venezuelan sanctions. US National Security Adviser John Bolton warned foreign governments and companies that they could face retaliation in the US if they continue doing business with Venezuela (English). The White House has frozen all Venezuelan government assets in the US, and the country has been added to the list of US adversaries.


ECLAC is pessimistic about Latin American GDP growth. The Economic Commission of Latin America and the Caribbean (ECLAC) reduced its growth forecast for 2019 from 1.3% to 0.5% (English). The reduction in the growth outlook was caused by lower growth in certain key regions, such as Brazil and Mexico.



Oil & Gas Upstream


Ecopetrol and Occidental partnered up in Midland Basin. Ecopetrol and US Occidental petroleum will together develop 97,000 net acres of Midland Basin properties in the Permian Basin (English). Ecopetrol will own 49% of the joint venture and Occidental will be the operator of the JV, owning the remaining 51%.


Apache prepares to spud a well in Trinidad & Tobago. Apache will drill a well in block 58 in September, and the Noble Sam Croft will complete the work (English). The Noble fleet contract starts in September and goes through late November.


Tullow will have results from Jethro-Lobe in August. The results of the Jethro Lobe wildcat drilling will be available in mid-August, according to Eco Oil & Gas (English). Tullow expects to share ExxonMobil’s success in the area, as the field may share some common geology to Exxon’s Hammerhead field.


US sanctions pressured Venezuela’s production and crude flows to Asia. The escalation of US sanctions against Venezuela could reduce production and reduce exports to India. Platts forecast a fall in Venezuela’s output to 750,000 barrels per day (English).


The ICC dismissed Conoco’s claim against PDVSA. The International Chamber of Commerce’s arbitration tribunal dismissed ConocoPhillips’ US$1.5bn claim against PDVSA regarding Venezuela’s breaking of a contract in the Corocoro oil project. PDVSA will have to pay only US$33.7m, plus interest for a loan to Conoco (English).


BHP okayed US$283m investment in Trinidad and Tobago. BHP approved a US$283m investment to develop the Ruby project in Trinidad and Tobago. The project includes five production wells tied back and the total investment to develop the oil and gas project is US$500m (English).



Oil & Gas Downstream


Clark bets US$25m on Puerto Rico. The gas station brand will invest US$25m as part of its expansion plan on the island (English). The company expects to open more gas stations to solidify its presence on the island (it has 14 gas stations already).


Jamaica is considering Total’s acquisition of Epping Oil. Jamaica’s Fair Trading Commission (FTC) is investigating the effect on oil products  competition from Total Jamaica Limited’s purchase of Epping Oil Company, including the regions that could be adversely affected by the merger (English).


US sanctions could protect Citgo… Venezuela’s opposition is confident the new measure would protect Citgo from seizure by creditors as it allowed for restructuring negotiations with bondholders, prohibited under previous sanctions (English).


… and Chevron will not suffer US sanctions for a while. Thanks to the waiver, Chevron and other US oil service companies could continue working with PDVSA despite President Trump’s executive order banning all crude and commercial trade with Venezuela. Analysts expect the waiver will not be renewed when it expires on October 25 (English).


A committee to evaluate Petrotrin refinery’s sale was appointed. The Trinidad Petroleum Holdings Limited announced the appointment of a 10-member committee to evaluate the offers for the sale or lease of Petrotrin’s former oil refinery (English). The committee will make recommendations to the Cabinet on the preferred bidder.



Renewables & Electricity


Cuba’s renewables grow. Sancti Spíritus has six solar parks that generate 75MW on average, 3.6% of the energy required in the region. Sancti Spíritus is working on six more solar plants, which could increase solar energy generation with 63.4MW more (Spanish), covering half of the demand at peak hour.


The Dominican Republic will bring light to 40,000 remote inhabitants. The Unit of Rural and Sub Urban Electrification (UERS) said the government will power up the most remote places in the country with clean energy with the construction of 51 micro hydroelectric power stations (English).


Two will fight over Guatemala’s solar auction. Total Eeren Guatemala and Corporación Klondike handed in their proposals for the power auction of 110MW through solar systems. The power supply will be divided into five projects with different capacities (Spanish).


Drought hit hydroelectricity in Guatemala. Due to the lack of rain during the first half of the year, Guatemala’s hydroelectric generation dropped by 27% compared to the same period in 2018 (Spanish). The situation could result in even higher power prices, which have increased again this month (Spanish).


Costa Rica is 100% powered by renewables. During the month of May, Costa Rica generated 984.19GWh of power, 99.99% coming from renewable sources. The Costa Rican Institute of Electricity (ICE) stopped power purchases and started selling electricity to other Central American nations (English).


China gave Colombia 3,000 solar panels. The Chinese government handed 3,000 solar panels to the Mines and Energy Minister for domestic use among Catatumbo, the Colombian Pacific, and La Guajira families (Spanish). The donation will power up 1,500 homes, which together with 500,000 families, do not have access to a power supply.



Old School Social


Events in the world beyond your screen—go see and be seen!


The Dominican Republic Grid Investment Forum will be held September 5 at the Intercontinental Santo Domingo, in Santo Domingo.



Lateral Thinking


BHP will invest big on climate. BHP announced a US$400m Climate Investment Program to develop technologies to cut emissions from its operations (English). The goal is to increase low carbon technologies to decarbonize their operations.



Quote of the Week


“Moss Park is where life stretches out itself on its back, prostrate in filthy, hopeless bouts of heroism and stardom, for these men who lie on the benches and the dying grass are heroes to themselves and to one another.”


– Austin Clarke (1934-2016), Barbadian novelist, essayist, and short story writer.




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