January 7, 2019 edition–Dominican wind; Colombian biofuel; and Saudi Aramco’s refinery.
Last Week in a Minute or Less
Central America. El Salvador received 18 renewable energy offers; the OEA suspension threatens Nicaragua’s economy; and the US will send US$5.8bn in aid to Central America.
Greater Antilles. The Dominican Republic cut the ribbon on a 48.3MW wind farm; the Cuban economy grew in 2018, but faces challenges; and the Dominican Republic and Wood Mackenzie partnered up over an oil round.
Lesser Antilles. Saudi Aramco’s subsidiary will face challenges in Curaçao; Trinidad and Tobago discussed oil and gas agreements over the break; and the Cayman Islands debated the price of thermal energy conversion.
South America’s Caribbean Coast. CGX Energy offered a rig contract in Guyana; Colombian biofuels were affected by US imports; and Venezuela and Guyana argued over the holidays.
Déjà vu all over again. Last edition’s readers were particularly interested in Punta Catalina power plant’s coal (English); Russia’s boost to Venezuelan oil output (English); and Crystallex’s auction plans (English).
The IMF had a busy break. The International Monetary Fund (IMF) said Costa Rica’s economic growth slowed down in the second half of 2018, rising by 2.7% in 2018Q3 (English). Panama’s economy also slowed down, but the outlook remains positive for 2019, projected to reach 6.3% (English).
US will send US$5.8bn in aid to Central America. The US pledged US$5.8bn in aid and investment for strengthening government and economic development in Central America (English). The goal is to promote better security conditions and job opportunities to allow Central Americans to remain in their countries and reduce migration.
S&P checked on El Salvador and the Bahamas. The international rating agency increased El Salvador’s rating from CCC+ to B- (Spanish), after the Legislative Assembly agreed to pay US$800m in bonds that expire in 2019. S&P maintained the Bahamas’ current BB+/Stable/B credit rating with a stable outlook, and the government hailed the perpetual cycle of credit rating downgrades (English).
The Cuban economy grew in 2018 but faces challenges. The Cuban Economy Minister announced cuts on fuel consumption and imports, including raw materials, equipment, and food in 2019 (English). The Cuban GDP was expected to grow 1.2% in 2018, implementing policies to reduce the country’s external debt (English).
The OEA suspension threatens Nicaragua’s economy. If Nicaragua is suspended from the Organization of American States, the government will lose all access to funds from the Inter-American Development Bank and the World Bank (Spanish). Nicaragua would be isolated and the population would pay the consequences.
Oil & Gas Upstream
Trinidad and Tobago discussed oil and gas agreements over the break. The Trinidad and Tobago government signed a new agreement with BP Trinidad and Tobago (BPTT) as the approval for two new gas developments offshore was announced (English). Trinidad and Tobago and Barbados are considering the possibility of a partnership on energy, including joint petroleum exploration (English).
CGX Energy offered a rig contract in Guyana. CGX Resources, a subsidiary of CGX Energy, offered a single-well contract to Rowan Cos. for the rig in the Corentyne block offshore Guyana. The drilling of Utakwaaka-1 will begin on or before November 2019 for an estimated 60 days (English).
The Dominican Republic and Wood Mackenzie partnered up. The Energy and Mines Ministry signed a contract with Wood Mackenzie to develop an oil round in the Dominican Republic (Spanish). The Ministry decided not to intervene in the gas emanation in Villa Tapia to discard the biogenic origin of the gas (Spanish).
Colombian biofuels were affected by US imports. From January to October, Colombian ethanol production amounted to 341.87 million liters, a 10.5% increase compared to the same period last year, but still low due to US imports. Sugar-based ethanol producers said US ethanol imports affect their business, as it is made at a lower cost from corn (English).
Venezuela and Guyana argued over the holidays. An oil exploration ship run by ExxonMobil was intercepted and stopped by the Venezuelan navy in Guyanese waters (English). The Guyana government plans to present a formal complaint to the United Nations, considering the actions an “illegal, aggressive, hostile act” (English).
Questions surround Venezuela’s production and the PDVSA leadership. Major General Quevedo enacted controversial measures that are questioned by oil industry experts, such as soldiers boarding tankers through inspections, workers risking arrests for mistakes operating PDVSA equipment, and contracts going to small firms with no experience in the sector (English).
Oil & Gas Downstream
Trinidad and Tobago banned regular gasoline. Trinidad and Tobago banned the supply of regular gasoline on the local market after it became uneconomical due to the closure of Petrotrin’s oil refinery (English). The fuel is not a standard grade and is not commonly produced by most regional refineries.
Saudi Aramco’s subsidiary will face challenges in Curaçao… Motiva Enterprises was chosen by the government of Curaçao to operate the Isla refinery (English). Management of the Curaçao refinery presents some opportunities and challenges, like the investment of at least US$3.5bn to meet Curaçao’s requirements (English).
…and PDVSA plans to restart the refinery and run it through the lease’s end. PDVSA is trying to restart the refinery and operate it until the end of the lease and its transfer to another operator (English). The refinery has been hit by a shortage of Venezuelan crude oil, lack of power, and lawsuits by creditors.
Ecuador’s pipelines will transport Colombian fuel. Petroecuador signed a contract with Amerisur Exploración Colombia to transport 5,000 barrels per day of Colombian oil in the Transecuatorian Pipeline System from Lake Agrio to the Balao Maritime Terminal (Spanish). The contract will last 15 years.
Renewables & Electricity
The Cayman Islands debated the price of thermal energy conversion. Cayman OTI challenged the Utility Regulation and Competition Office’s statement that a floating power plant in North Side would not produce energy at a reasonable price. Cayman OTI said the energy price offered is “substantially lower” than the current rates (English).
El Salvador received 18 renewable energy offers. In El Salvador, 18 offers compete for the auction of 28MW of renewable energy, 12 for solar projects, and 6 for biogas projects (Spanish). Independent experts will evaluate the legal, financial, and technical aspects of the 18 offers (Spanish).
The Dominican Republic cut the ribbon on a 48.3MW wind farm… President Danilo Medina opened the second phase of the Larimar Wind Farm, adding 48.3MW to the national grid. The second stage of the wind farm was built in one year at a cost of more than US$100m (English).
…and a 40MW solar plant contract was awarded. The Dominican government awarded the license to develop a solar project in Azua, with an investment of US$45m and a generation capacity of 40MW. The company Levital Group Inversor won and signed the contract (Spanish).
The Caribbean has geothermal power in sight. The Sustainable Energy Facility for the Eastern Caribbean plans to reduce the financial, technical, and institutional barriers to geothermal energy development (English) in six countries. Dominica will start the construction of a geothermal energy power plant by the third quarter of 2019 (English) (French).
Old School Social
Events in the world beyond your screen—go see and be seen!
The S&P Global Platts 19th Annual Caribbean Energy Conference is scheduled for January 24-25 at the Renaissance Santo Domingo Jaragua Hotel & Casino, in Santo Domingo, Dominican Republic. Every year, attendees gather from all over the Caribbean, the Americas, and Europe to discuss the events and trends in Caribbean energy. Meet with private and public energy companies working in the Caribbean, plus investors and project financiers. For more information, including an agenda and speaker lineup: www.platts.com/caribbean.
Scientists boosted distant coral populations. Scientists from the Smithsonian Conservation Biology Institute and partners in Florida and Curaçao used cryopreserved coral sperm to encourage gene migration of coral populations (English). Live corals are difficult to move between locations for breeding.
Quote of the Week
“I set myself rather high standards: that unless the story is at once as unputdownable to a taxi driver as to a university professor, it is not good enough; that unless a novel is, at the end, quite clearly an epic poem, as well as a story, it is not good enough.”
– Brian Burland (1931-2010), Bermudian writer, who was the author of nine acclaimed novels.
We hope you have a productive week. Please send any news, comments, or frozen coral populations to CaribbeanWeekly@energynarrative.com.
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