The Weekly Brief: Greater Caribbean

August 21, 2017 edition— Eleven companies entered the DR energy contract tender; T&T’s Juniper gas production started; and Caribbean FDI is trending down.





Last Week in a Minute or Less


Central America. Fuel prices shoot up again in El Salvador; Panama’s inflation reached 1.1%; and power subsidies were reduced in Nicaragua.


Greater Antilles. The Dominican Republic handed over energy credentials while certain the electric pact will be signed; Russian and Cuban nuclear energy officials met; and Jamaica and Puerto Rico’s energy will get a makeover.


Lesser Antilles. Gas production started at Trinidad and Tobago’s Juniper development and BP updated the country’s gas reserves in the Columbus basin.


Northern South America. The Guyana Revenue Authority will monitor exploration companies; CARICOM discussed Venezuela’s political crisis; Colombia moves forward with new oil and gas rules; and Venezuela’s inflation reached 249%.


Déjà vu all over again. Last week’s readers were particularly interested in Dominica’s interest in geothermal energy projects (English); Suriname’s exploration activity (English); and Jamaica’s LNG demand (English).



Political Economy


Caribbean banks focus on regional financial industry issues… The Caribbean Association of Banks (CAB) visited the CARICOM Secretariat in Guyana and Guyana’s central bank to discuss the region’s growth and development (English). The United Nations Economic Commission for Latin America and the Caribbean noted that Caribbean foreign direct investment is on a downward trend (English).


…and Taiwan has the region in sight. Nicaragua and Taiwan will review their free trade agreement in September (Spanish). Twenty-four Taiwanese companies are also exploring business opportunities and investments in the Dominican Republic (English).


Barbados enjoyed 2.2% growth in the first semester. The Central Bank of Barbados registered an “uneven performance” in the first semester of 2017 with an estimated growth of 2.2% (English). The fiscal deficit narrowed moderately and the stock of international reserves fell below 10 weeks of import cover (English).


Venezuela’s inflation is more than 200x Panama’s. From January to July, inflation has surpassed 1.1% in Panama driven mainly by the education and health sectors (Spanish). Venezuela’s inflation has reached 249%  in July and the International Monetary Fund thinks inflation will skyrocket to 720% by the end of 2017 (Spanish).


CARICOM discussed Venezuela. At a special emergency meeting, the heads of government of CARICOM discussed the ongoing situation in Venezuela (English). The United Nations Secretary, General António Guterres, encouraged the Venezuelan government and the opposition to negotiate for the sake of the Venezuelan people.



Oil & Gas Upstream


BP updated T&T’s Columbus basin’s gas reserves… In Trinidad and Tobago, BP declared 12.578 tcf of 3P natural gas reserves in the Columbus basin. According to the Natural Gas Master Plan (NGMP), BPTT has 6.728 tcf in proved reserves and 5.597 tcf in identified exploration resources (English).


…and Juniper started gas production. The Juniper development of BP Trinidad & Tobago began producing natural gas offshore the Caribbean nation. The project will increase BPTT’s gas production capacity by 590 MMscfd and will maintain the country’s gas production at more than 2 Bscfd (English).


The GRA is watching. The Guyana Revenue Authority (GRA) will regulate bodies for the emerging oil and gas sector in Guyana (English). The GRA will impose rigid systems to monitor exploration companies, maintaining its confidentiality and avoiding leaks.


Range acquired Trinity’s assets. Range Resources acquired producing assets from a subsidiary of Trinity Exploration and Production for US$4.55m (English). The company came into possession of “significant interest” in two producing licenses offshore the West Coast of Trinidad, with a combined production of 200 bpd.


Colombia moves forward with new oil and gas rules. The Colombian National Hydrocarbon Agency (ANH) published its new regulations for awarding oil and gas blocks or areas, following a trend of increasingly open energy markets across Latin America (English). The new rules include positive advances, but investors expected more.



Oil & Gas Downstream


Fuel prices rise again in El Salvador… According to the Economy Ministry, special and regular gasoline and diesel will increase by US$0.10 per gallon (Spanish). The reason is a rise in fuel prices due to a decrease of 6.5 million barrels in US inventories.


…and the Dominican Republic got a break from fuel prices hikes. The Industry and Commerce Ministry published the fuel prices from August 12 to 18 with a reduction of RD$1.00 per gallon in premium and regular gasoline (English). Natural gas prices and propane maintained the price of the previous week.


Should all fuels be offered in Dominican gas stations? The Dominican Association of Fuel Industry Companies (ADEIC) assured that the sale of all fuels in the same gas station could promote fuel sector liberalization (English). The proposal to unify fuel sales follows common practices in many other countries.



Renewables & Electricity


Central American power subsidies suffered a blow. El Salvador’s government has not yet paid the US$30m debt in power subsidies it sustains with power distributors (Spanish). Nicaragua has reduced its power subsidy, even with an increase in the number of clients (Spanish).


Jamaica invests in electricity distribution, but Puerto Rico’s projects are faltering. JPS invested US$3.4m to modernize its power delivery system installing new infrastructure on the power grid (English). Among the 68-renewable power-purchase and operating agreements (PPOAs) signed in Puerto Rico, only 58 remain in effect and construction on 47 is up in the air (English).


The DR government is certain the electricity pact will be signed. The Economy Minister, Isidoro Santana, assured that the electric pact could be signed soon, despite disagreement from the “social sector” (Spanish). The social sector said their 31 proposals are being ignored by the government.


Russian nuclear energy officials met Cuban counterparts. Representatives from Russia’s State Nuclear Energy Corporation met Cuba’s Agency for Nuclear Energy and Advanced Technologies (AENTA) (English). The goals were to strengthen collaboration between the institutions and to study the potential of future projects in the Caribbean.


Eleven companies are interested in the Dominican Republic 5-year power contracts. The bidding committee in charge of the energy market received initial information from eleven companies interested in selling power to EdeNorte, EdeSur, and EdeEste (EDE) (Spanish). The process will end by August 28 with the allocation of five-year contracts.



Lateral Thinking


More Caribbean students are interested in a prestigious science program. The Caribbean Science Foundation (CSF) announced 24 students graduated from the Student Program for Innovation in Science and Engineering (SPISE) (English). The studies include skills in areas such as robotics, renewable energy, and computer programming (English).



Quote of the Week


“But no matter what the truth, remember: Dominicans are Caribbean and therefore have an extraordinary tolerance for extreme phenomena.”



-Junot Díaz (1968), Dominican American writer, winner of 2008 Pulitzer Prize for The Brief Wondrous Life of Oscar Wao




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