The Weekly Brief: Greater Caribbean

August 28, 2017 edition— ExxonMobil hired drillship for Guyana; Guatemala’s PET delayed again; and geothermal energy can help Central American economies.




Last Week in a Minute or Less


Central America. Guatemalan PET is behind schedule again; Guatemala could import 300MW from Mexico; and geothermal energy can boost Central America’s development.


Greater Antilles. Barbados’ smart energy project reached phase two; the Dominican Republic is discussing a draft for the electricity pact; and Jamaica’s inflation reached 4.4%.


Lesser Antilles. Guyana applied to join EITI; Shell focused on Trinidad and Tobago’s development; and ExxonMobil hired Noble to drill in Guyana.


Northern South America. Ecopetrol has a new president and the US issued new sanctions on Venezuela.


Déjà vu all over again. Last week’s readers were particularly interested in  CDEEE’s 5-year contract tender (Spanish); JPS investment in to power delivery system upgrades (English); and Taiwan’s investment in the Dominican Republic (English).



Political Economy


The DR Green March demands Odebrecht’s expulsion. The team organizing the Green March demands Odebrecht’s expulsion from the Dominican Republic and indictments against people linked to Odebrecht’s bribes (English). Besides the bribes, the team also protested the allegedly inflated cost of the coal plant.


Jamaica’s economy had a mixed week. Jamaica plans to raise US$1bn through two international bond transactions with placements led by Citigroup, Merrill Lynch, and Pierce, Fenner & Smith (English). In the second quarter, Jamaica recorded a 4.4% inflation rate, up from 4.1% in the first quarter (English).


Moody’s met with Panama’s Economy Ministry. Moody’s representatives met with officials from the Economy and Finance Ministry as part of the annual visit to discuss the 2018 national budget and the national investment plan (Spanish). Moody’s maintains a Baa2 rating with a stable perspective for Panamá.


Nicaragua’s commerce industry demands a lower power tariff. For the past few years the Nicaraguan Chamber of Commerce and Services (CCSN) has been demanding  lower tariffs to increase its regional competitiveness (Spanish). The electricity cost for Guatemala’s businesses is 190% lower than in Nicaragua.


Honduras and the DR bring power and transparency into government. Honduras will create a power ministry in charge of developing and supervising the country’s electricity wholesale strategy and integration with the regional electrical market (Spanish). The DR Energy Ministry opened a website with public information on contracts and income (Spanish).


Caribbean nations signed an economic cooperation agreement with the DR. Curaçao, Aruba, San Martin, and the Netherlands signed an economic cooperation agreement with the Dominican Republic (Spanish). Meanwhile, Puerto Rico is reviewing its trade exchange with the Dominican Republic through a constant dialogue between trade offices (Spanish).



Oil & Gas Upstream


Guyana submitted its EITI application. The Ministry of Natural Resources officially submitted the application for membership in the Extractive Industries Transparency Initiative (EITI) (English). The EITI is a worldwide standard for the good management of oil, gas, and mineral resources and will ensure “transparency” in its handling.


ExxonMobil hired a Noble drillship for Guyana… ExxonMobil signed a three-year contract with Noble Corp to hire the Noble Bob Douglas drillship in Guyana, while using the Stena Carron to drill in Liza and Payara (English). Before moving to Guyana, the drill ship has a brief contract with Tullow in Suriname.


…and Shell hired a semi-submersible rig in Trinidad and Tobago. Shell hired the deep-water semi-submersible rig Maersk Developer to start drilling the first of three wells in Block E in January 2018 (English). Shell contracted the rig for eight to nine months with an option to extend it for two years.


Ecopetrol named new president. The Colombian oil and gas company Ecopetrol named Felipe Bayón Pardo, a mechanical engineer with more than 25 years of experience, as its new president (English). The former president, Juan Carlos Echeverry Garzón resigned due to family reasons. The transition will be made on September 15, 2017.



Oil & Gas Downstream


LP gas prices are up in the DR, while gasoline caught a break… The Ministry of Industry, Commerce and Small business increased LP gas prices by RD$1.30, while premium and regular gasoline prices were reduced by RD$2.5 (Spanish). Although US oil reserves keep decreasing, the reduction was below the forecast amount.


…but Panamá and Grenada were not so lucky. The National Ministry of Energy announced a national fuel price increase, with gasoline reaching US$0.732 per liter and a liter of diesel increasing to US$0.634 (Spanish). Grenada’s retail prices of gasoline and diesel will increase to EC$14.5 and EC$13 per imperial gallon, respectively.


US issued new sanctions on Venezuela. The Trump administration is considering another round of sanctions to punish the Venezuelan government (English). Analyst warned that restrictions on oil exports could provide the Venezuelan government the perfect excuse to default on its bonds (English).



Renewables & Electricity


Barbados’ smart energy project reached phase two. The government company Solar Watt Systems signed a deal worth US$5.5 million to install photovoltaic systems on government buildings (English). The Public Sector Smart Energy Program was created to promote the use of renewable energy in the public sector with a US$24.6bn budget.


Guatemala’s PET is behind schedule again. The Colombian company Trecsa will not finish the electric expansion project (PET) in Guatemala in time with a third extension (Spanish). The 850km grid was expected to be in operation in 2013, but only 66% of the construction was completed by August.


The draft of the DR electricity pact is being discussed. The members of the plenary sessions to sign the National Pact for the Reform of the Electrical Sector discussed a draft to include comments and be ratified in the following meetings (Spanish). The document will then be sent to President Danilo Medina to receive final comments from the Executive Power.


Guatemala could now import 300MW. Powertech Labs published a report estimating that Mexico and Guatemala can trade 295MW of baseload electricity, and as much as 400MW in the summer (Spanish). The report was requested by Energía del Caribe, a gas generator located in Monterrey which holds a 120MW contract with Guatemala since 2016.


IRENA thinks geothermal energy can boost Central America’s economic development. The International Renewable Energy Agency (IRENA) considers Central America’s geothermal potential is a key tool for economic development with a low-carbon footprint (English). Central American countries have the potential to multiply by 20 the current installed capacity.



Lateral Thinking


The solar eclipse hit Martinique’s power production. On August 21, the solar eclipse lowered Martinique’s power generation by 20MW in an hour, 10% of the total power production in the country (French). EDF Martinique foresaw the impact of the solar eclipse, increasing its geothermal generation at the same time.



Quote of the Week


“Peace cannot exist without justice, justice cannot exist without fairness, fairness cannot exist without development, development cannot exist without democracy, democracy cannot exist without respect for the identity and worth of cultures and peoples.”



-Rigoberta Menchú (1959), a K’iche’ political activist from Guatemala who won a Nobel Peace Prize in 1992



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