The Weekly Brief: Greater Caribbean


August 26, 2019 edition– Guatemala’s oil contracts; Bonaire’s energy storage; and Staatsolie’s offshore project.



Last Week in a Minute or Less


Central America. Guatemala will hand over oil contracts in extremis; Etesal will invest in a transmission line; and Guatemala’s solar auction offers were disqualified.


Greater Antilles. Haiti published an RFQ for a power grid, solar, and LNG plants; JPS bets on its infrastructure; and Puerto Rico businesses got an investment from the REAP.


Lesser Antilles. Trinidad and Tobago’s Methanol to Dimethyl Ether project was discussed; Bonaire will count on a smart battery energy storage system; and permeability is still missing at St Vincent and the Grenadines geothermal site.


South America’s Caribbean Coast. Staatsolie is looking for financing on offshore projects; ONGC Videsh will leave three Colombian blocks; and Oleoducto de Colombia is ready for fracking.


Déjà vu all over again. Last week’s readers were particularly interested in St. Kitts and Nevis’ solar and storage project (English); the Dominican bank’s free power station (English); and Guatemala’s solar auction troubles (Spanish).



Political Economy


Moody’s forecasts a fiscal deficit overshoot for the Bahamas. The international rating agency estimates that the Bahamas government will overshoot its 2019-2020 deficit target by B$82m (English). Moody’s forecasts that the deficit for this fiscal year will be at 1.6% of economic output.


Belize and Taiwan formalized their friendship. The governments of Belize and the Republic of China signed a letter of intent (LOI) in Taiwan to start the negotiation of a partial scope agreement to formalize trade relations between both countries (English). The LOI will conform to the World Trade Organization’s rules of trade.


The IMF trusts the Dominican Republic’s growth. The International Monetary Fund (IMF) said the Dominican Republic’s economy grew 7% in 2018, which carried over into the first part of 2019 (English). The reason is a strong response from investment and private consumption.


Puerto Rico businesses got investment from the REAP. The US Department of Agriculture (USDA) awarded additional grants for projects in Puerto Rico to reduce energy costs for farmers, agricultural producers, and rural businesses (English). The agency will invest US$9.3m in the Rural Energy for America Program (REAP).



Oil & Gas Upstream


Guatemala will hand over oil contracts in extremis. The Energy Ministry will contract services to operate and manage the Las Casas, Huapac, and LA-9-92 blocks located in Alta Verapaz (Spanish). The oil contracts for the wells expired on February 7, and the wells are closed mechanically without protection.


Shell and Trinidad and Tobago signed their agreement. The Energy Ministry said the agreements among the government, Shell, National Gas Company Ltd, and Heritage Petroleum Company Ltd were signed at its office and will result in improved economic and financial benefits to Trinidad and Tobago (English).


Staatsolie is looking for financing on offshore projects. Suriname’s state-owned oil company plans a bond sale to obtain financing for offshore oil exploration (English). Staatsolie could also list some of its shares on the New York or London stock exchange to raise between US$1bn and US$2bn.


ONGC Videsh will leave three Colombian blocks. ONGC Videsh plans to exit three exploratory blocks in Colombia, RC-9, RC-10, and GUA OFF-2, due to the adverse hydrocarbon prospectivity in these blocks (English). ONGC Videsh has participating interests in seven projects in Colombia, including the three blocks.


Venezuela’s oil production keeps falling. Venezuela’s oil production continued its drop, falling 32,000 barrels per day to 740,000 barrels per day (English). The figures represent a 4% decrease from June production.



Oil & Gas Downstream


Trinidad and Tobago’s Methanol to Dimethyl Ether project was discussed. Senator Franklin Khan met the Japanese Ambassador Mr. Tatsuo Hirayama to discuss the ongoing Methanol to Dimethyl Ether project, the largest foreign direct investment from Japan in the Caribbean nation (English). Khan said that the government valued downstream investment.


New Fortress is raising US$185m for Jamaica’s Clarendon LNG Project. New Fortress plans to raise US$185m from a bond issue to finance the construction of the Clarendon plant, targeting institutional investors from the region (English). The offer will close on August 29.


Russia became the main Venezuelan crude trader. The Russian state oil company Rosneft has become the main trader of Venezuela’s crude, shipping oil to China and India (English). Taking 40% of PDVSA’s exports in July and 66% so far in August, Rosneft is helping Venezuela as traditional dealers fear breaching US sanctions.


Oleoducto de Colombia is ready for fracking. The pipeline company said it is prepared to move crude production from the center of Colombia to the coast if the use of fracking is approved (English). The decision is pending an administrative tribunal that will rule on whether the technique will be allowed.



Renewables & Electricity


Bonaire will count on a smart battery energy storage system. Bonaire added a new smart, battery-based energy storage system (BESS) to the power grid (English). The island of Bonaire has a hybrid wind and fuel-based power grid and aims to transition to 100% renewable energy.


Nicaragua’s solar energy could be cheaper. Although Nicaragua has a positive market to develop solar energy considering the increase in power tariffs, the country has certain obstacles to its development: the taxes on solar equipment and the charges to consumers involved in power self-production (Spanish).


JPS bets on its infrastructure. The Jamaican power utility plans to invest more than US$500m in five years in its infrastructure (English). The project includes new initiatives such as a network of charging stations for electric vehicles and micro-grids to incentivize large customers to remain with the utility.


Guatemala’s solar auction offers were disqualified. After complaints caused delays in the auction (Spanish), the offers of the two participating companies were rejected, as it was determined that neither comply with the auction’s requirements (Spanish).


Etesal will invest in a transmission line. El Salvador’s Transmission Company (Etesal) will invest US$23.7m to expand the transmission line in Tamanique, La Libertad (Spanish). The project includes the construction of a substation in the same municipality that will connect to the Talnique substation with a 115kV transmission line.


Permeability is still missing at St Vincent and the Grenadines geothermal site. Although heat was found after drilling the first well, bedrock with sufficient permeability has not been found yet (English). The company will address the permeability issue after drilling the second well.


Haiti published an RFQ for a power grid and solar and LNG plants. The Haiti National Regulatory Authority for Energy made a Request for Quotations (RFQ) public for the concession of one of the country’s power grids (English) (French). The power grid will serve seven cities, covering 65,000 customers after five years.



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


A microbe turns oil into gas. During a cruise in the Gulf of Mexico, scientists collected sediment samples from the Chapopote Knoll, a 3,000m-deep oil and gas seep in the ocean. They found a new organism, Methanoliparia, which uses novel enzymes to transform unreactive oil into methane (English).



Quote of the Week


“The world is what it is; men who are nothing, who allow themselves to become nothing, have no place in it.”



– V. S. Naipaul (1932-2018), Trinidadian-British writer.



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