The Weekly Brief: Greater Caribbean


February 17, 2020 edition– EEGSA’s auction; Colombia’s gas; and New Fortress’ supply.




Last Week in a Minute or Less


Central America. Guatemala’s EEGSA awarded 120MW to seven companies; Nicaragua’s president holds a tight grip on gas distribution; and Guatemala expects to grow 3.6% in 2020.


Greater Antilles / Northern Islands. Haiti cut the subsidies to EDH; The Bahamas solar farm on Ragged Island is almost done; and New Fortress tapped a cheaper line of fuel supply.


Lesser Antilles / Southern Islands. Shell Trinidad & Tobago announced a FID for Barracuda; and the IADB will finance Barbados’ sustainable energy program.


South America’s Caribbean Coast. Shell and Ecopetrol will develop Colombia’s natural gas exploitation; Chevron increased Venezuelan production; and the Maka Central discovery redesigned the Guyana-Suriname basin map.


Déjà vu all over again. Last week’s readers were particularly interested in Staatsolie’s optimism (Energy Now – English); Tullow’s plans in Jamaica (Energy Now – English); and Venezuela’s oil exports (Oil Price – English).



Government & NGO


Guatemala expects 3.6% economic growth in 2020. The Central American nation’s central bank forecasts 3.6% growth for this year and an increase in exports (DCA – Spanish). The main buyer of Guatemala’s products is the US, acquiring products and services worth US$3.6bn in 2019.


Puerto Rico rejected the debt deal with bondholders. Puerto Rico’s governor Wanda Vázquez rejected a settlement announced with bondholders that would reduce the island’s debt by 70% (Jamaica Gleaner – English). The governor said the deal is too heavy a burden on the island’s retirees and requires legislative approval.


Guatemala will take advantage of its green bonds. Guatemala is negotiating the placing of carbon bonds through carbon emission reduction programs in the international market (El Periódico – Spanish). A contract will be signed with the World Bank to place 10.5 million tons of CO2 at US$5 per unit.


The IMF visited Barbados. The International Monetary Fund said Barbados has made good progress implementing its economic reform program, and all indicative targets for the end of December under the Extended Fund Facility (EFF) have been met (IMF – English). The external debt restructuring reduced economic uncertainty.


Haiti’s central bank forecast a mixed outlook. The Bank of the Republic of Haiti said the outlook for the nation’s economy remains mixed, as it depends on the socio-political climate (RJR News Online – English). The unstable political climate led to the layoff of 10% to 25% of the workforce in 65% of the companies surveyed.




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Oil & Gas Upstream


The Maka Central discovery redesigned the Guyana-Suriname basin map. The Maka Central-1 well proves the extension of the Guyana Cretaceous oil play into Suriname’s waters and has convinced Apache and Total to test additional prospects on Block 58 (OGJ – English). The companies formed a 50-50 joint venture in December 2019.


Shell and Ecopetrol will jointly develop Colombia’s natural gas. If the government approves the acquisition of a 50% stake in Fuerte Sur, Purple Angel, and COL-5 blocks from Ecopetrol, Shell will drill an appraisal well in offshore Colombia by 2021 (OGJ – English). The confirmation of gas fields in the area could allow Colombia to develop a gas production-specialized “cluster.”


Parex and Frontera have to discuss future plans in Colombia. Parex and Frontera will consider options to drill one or two additional delineation wells in the VIM-1 block in the Lower Magdalena Valley in Colombia after a recent discovery (OGJ – English). The La Belleza-1 exploration well, drilled to 11,680 ft. TD, encountered 179 ft. total MD.


Shell Trinidad & Tobago announced a FID for Barracuda. Shell Trinidad and Tobago published a Final Investment Decision (FID) on the development of Block 5C (Barracuda) in the East Coast Marine Area (Energy Now – English). The Barracuda is a greenfield gas development that will involve a two-well subsea tie-back to existing infrastructure.


Chevron increased Venezuelan production. Chevron boosted oil production in its joint venture with PDVSA to the highest in almost a year (Oil Price – English). Chevron defended their marketing operations in Venezuela, as they have been approved by Washington (Reuters – English).


Maersk Drilling will work in Colombia. Maersk Drilling was awarded a contract for the 7th generation drillship Maersk Valiant by Noble Energy (Energy Now – English). The contract is expected to start in the third quarter of 2020 and will last 65 days.


Guyana published its local content policy and national oil spill contingency plan. Guyana’s Civil Defense Commission (CDC) has begun to operationalize the National Oil Spill Contingency Plan with a simulation exercise (Pride News – English). Guyana has also published the local content policy for the oil and gas sector (Pride News – English).



Liquid Fuels Mid-Downstream


Despite refinery maintenance, the Dominican Republic will have no fuel supply shortage. The Dominican Petroleum Refinery PDV stopped activities due to plant maintenance (Dominican Today – English). The company assured that the supply of fuel to its customers would not be affected by the maintenance work.


A new bomb attack hit Ecopetrol’s Caño Limón. The state-owned company halted pumping on the Caño Limón pipeline after a bomb attack caused a fire and crude spillage into the La Petra ravine and the Sararito and Margua rivers in the Toledo municipality (Reuters – English).


I Squared is interested in Colombia’s pipelines. I Squared Capital bought an indirect equity interest in Oleoducto Central (OCENSA) (Kallanish Energy – English). OCENSA operates the largest crude oil pipeline in Colombia, with a capacity of 680,000 barrels per day, transporting 75% of the oil produced in the country.


Citgo executives moved to prison. Six oil executives who had been under house arrest for more than two years were moved to prison “without warnings or judicial order.” The change was made hours after Juan Guaidó met with President Donald Trump (CNN – English).



Natural Gas Mid-Downstream & LNG


New Fortress tapped a cheaper line of fuel supply… The LNG infrastructure and supply company signed a long-term supply agreement for the purchase of 27.5 million MMBtu per annum of liquified natural gas (Loop Jamaica – English). The agreement covers eight cargoes a year.


…and most LNG cargoes will go to Puerto Rico. Leaving from Miami, most of New Fortress Energy’s cargo will go to Puerto Rico, where the company regasifies natural gas for two converted units at the San Juan power plant (Gas to Power Journal – English).


Nicaragua’s president holds a tight grip on gas distribution. President Ortega created four new state-owned companies to control oil exploration and exploitation as well as natural gas and fuels storage, distribution, and sale (Central America Data – Spanish). The goal is to transfer the market control that Alba de Nicaragua had before the US sanctions.



Electric Power & Renewables


The Bahamas solar farm on Ragged Island is almost done. The Bahamas solar project on Ragged Island, which was expected to be finished by January 2020, suffered delays due to the after-effects of Hurricane Dorian. Constructing overhead transmission lines, finishing the ground wiring, and installing the energy storage equipment are still pending (New Energy Events – English).


The Caribbean’s future is electric vehicles. The Dialogue published a report on the region’s potential for electric vehicles due to the current dependence on oil imports and abundant renewable energy resources (The Dialogue – English). The challenges are a lack of public awareness and insufficient charging stations.


Guatemala’s EEGSA awarded 120MW to seven companies. Empresa Eléctrica de Guatemala (EEGSA) awarded 120MW to seven companies with a power auction. The contract with Energías San José, a coal plant, will be substituted by hydroelectric, biomass, and biogas plants (El Periódico – Spanish).


Haiti cut the subsidies to EDH. Haiti’s Finance Minister confirmed that the government suspended US$7m in subsidies per month to Électricité d’Haïti (EDH) (New Energy Events – English). EDH is currently owed $230 million dollars and 60% of the debt belongs to residential customers.


The IADB will finance Barbados’ sustainable energy program. The Barbados government signed two loan deals with the Inter-American Development Bank that will allow the country to leverage renewable energy on government properties (New Energy Events – English). Barbados spends US$400m per year on fuel.


International power sector investors have the Dominican Republic in sight. International electricity sector executives and the Dominican Republic’s central bank met to discuss the confidence of foreign markets in the Dominican Republic’s projects and macroeconomic stability (Dominican Today – English). Inkia Energy already announced new investments in the country.



Old School Social


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


The ECPA Ministerial will be held February 27-28 at Montego Bay Convention Center in Jamaica.


The REFFLatAm 2020 is scheduled for March 16 at 1 Hotel South Beach in Miami, Florida.


The SPE Latin American and Caribbean Petroleum Engineering Conference will be held March 17-19 in Bogotá.



Lateral Thinking


The IDB is looking for regional projects in Latin America and the Caribbean. The Inter-American Development Bank (IDB) launched the Regional Public Good (RPG) Initiative in Latin America and the Caribbean, which will boost projects involving three or more countries (IADB – English). Since 2004, the RPG Initiative has financed 180 projects.



Quote of the Week


“La enfermedad más contagiosa es la desesperanza.”



“The most contagious sickness is despair.”



-Carlos Solorzano (1919 – 2011), Guatemalan born Mexican playwright.




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