December 3, 2018 edition–Guatemala’s shrinking oil; St. Vincent’s geothermal; and T&T LNG exports.
Last Week in a Minute or Less
Central America. Guatemala’s oil production dropped 5%; Fitch lowered Nicaragua’s rating; and Guatemala published policies on mining and natural resource exploitation.
Greater Antilles. The Dominican Republic had a busy week in the power sector; Spain and Cuba strengthen their ties; and Jamaica maintained its growth.
Lesser Antilles. Trinidad & Tobago, Shell, and BP will collaborate on LNG exports; St. Vincent and the Grenadines will have a geothermal project; and the deadline for Bermuda’s renewable projects arrived.
South America’s Caribbean Coast. Venezuela turned down BP for Total’s stake; and Eco Atlantic Oil & Gas finished Total’s farmout transaction.
Déjà vu all over again. Last week’s readers were particularly interested in Caricom’s decision on oil taxes (English); and Trump’s decision to add Venezuela to the list of state sponsors of terrorism (English).
Jamaica maintained its growth while Barbados adjusted corporate taxes. Jamaica’s economy may close 2018 with 2% growth (English). Barbados will coordinate its domestic and international corporation tax regimes by the end of the year, cutting the tax burden for some companies by 29% (English).
What will the future hold for China’s influence in the Caribbean? The Center for Strategic & International Studies published a report examining how China’s growth could transform Latin America and the Caribbean by examining different economic sectors (English). The report found China’s expansion plans threaten the region with limited economic opportunity and personal liberty.
Fitch lowered Nicaragua’s rating. Fitch has lowered the rating for Nicaragua from B to B-, following Standard & Poor’s decision a couple of weeks ago (Spanish) (English). Nicaragua is close to the lowest rating level above default, suggesting a poor repayment outlook and increasing risk.
Spain and Cuba strengthen their ties. The Spanish Prime Minister Pedro Sanchez and the Cuban President Miguel Díaz-Canel plan to strengthen the political connections between both countries. The two leaders agreed to have annual high-level political dialogue meetings (English).
The US imposed sanctions on Nicaragua’s vice president. The Trump administration imposed financial sanctions on Rosario Murillo, Nicaragua’s vice president, pressuring the Sandinista government to end its violence against a popular uprising (English). Protests and confrontations between student protesters and the police have been ongoing since April.
Oil & Gas Upstream
Guatemala oil production dropped by 5%. Guatemala reported production of 2.78 million barrels from January to October, 5% less than the same period in 2017 (Spanish). The lack of incentives for the extractive activity is one of the reasons for the production drop.
Eco Atlantic Oil & Gas finished Total’s Guyana farmout transaction. Total paid US$12.5m to Eco and has received a 25% working interest in the Orinduik exploration project offshore Guyana (English). Tullow Oil will be an operator at the Orinduik project with a 60% stake, Total with 25%, and Eco with 15%.
Venezuela turned down BP’s bid for Total’s stake. Last month, Venezuela’s oil ministry rejected a proposal by BP to buy Total’s stake in an inactive natural gas project at the maritime border with Trinidad & Tobago (English). BP owns the rights to the Trinidad side of the field.
Guyana and the North Sea are besties. The Guyanese ambassador to the UK and the British high commissioner to the country led a delegation to strengthen the relationship between Guyana and North Sea operators to support the country’s oil and gas sector. The goal is to learn from Aberdeen’s experience with North Sea oil development (English).
Oil & Gas Downstream
Petrotrin workers don’t know about their retirement. Thousands of Petrotrin employees that expected to be pensionable as of December 1 still have questions about the security of their retirement funds (English). The Oilfields Workers’ Trade Union (OWTU) will file contempt of court proceedings against Petrotrin for not discussing the criteria used to staff the Heritage Petroleum Company (English).
Venezuela avoided a Citgo default. Venezuela reached a settlement with Crystallex to retain its US refiner Citgo (English). Venezuela will have to make payments through early 2021 to protect the refining assets.
PDVSA considers a second ship-to-ship operation. Venezuela’s state-run oil firm is negotiating with shipping firms to do a second ship-to-ship operation to increase crude exports (English). PDVSA began seaborne oil transfers to move crude and fuel oil to Asia.
Trinidad & Tobago, Shell, and BP will collaborate on LNG exports. Trinidad & Tobago signed an agreement with BP and Shell to set new pricing arrangements, extend the Atlantic LNG Train 1, and give NGC the ability to export liquified natural gas for Trinidad & Tobago (English).
Renewables & Electricity
St. Vincent and the Grenadines will have a geothermal project. The St. Vincent Geothermal Company and the Icelandic Drilling Company signed a contract to drill four wells for a geothermal power project (English). The project will deliver a 10MW geothermal power plant to the island.
The deadline for Bermuda’s renewable projects arrived. The deadline for submissions arrived after the Bermuda Engineering Company received overwhelming support in the public consultation (English). Eight proposals were submitted, including wave energy, a floating ship-based regasification power and water plant, wind and solar energy, multi-fuel power, biomass technology, and hydrogen-based steam generation.
Guatemala published policies on mining and natural resource exploitation. The Energy and Mines Minister implemented the National Energy Policy to control and supervise community development by the energy and mining sectors (Spanish). Guatemala will also work to provide power to the 8% of the population without power before 2032 (Spanish).
The Dominican Republic had a busy week. AES will supply 3.6 TBTUs of natural gas for the operation of a 51MW power plant in base operation and an additional 22MW for peak demand (English). The Dominican Republic is also courting investments in renewable energy from the United Arab Emirates (Spanish).
Barbados and the Bahamas are working on renewables. The Inter-American Development Bank (IDB) said renewables penetration in The Bahamas is slow and that Bahamas Power & Light’s 1MW renewable self-generation projects fall far short of what is needed (English). Williams Industries is developing renewables to save Barbados from having to export foreign exchange (English).
Old School Social
Events in the world beyond your screen—go see and be seen!
The 3rd Caribbean Infrastructure Forum is scheduled for December 4-5 at the Grand Hyatt Baha Mar in Nassau, Bahamas.
Cuba Energy Oil and Gas will be held December 4-7 at the Melia Cohiba Hotel in Havana, Cuba.
Smokers launched the Agricultural Revolution in North America. Native American groups used tobacco for complex and varied reasons, changing over time, and from one community to the next. Archaeologists found smoking implements excavated in Alabama from around 1685 BC, around the time when indigenous people started domesticating crops (English).
Quote of the Week
“Your path lies across the stars.”
– Maryse Conde (1901-1979), Salvadoran-French writer and artist.
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