The Weekly Brief: Greater Caribbean


January 20, 2020 edition– Tullow’s extension; Puerto Rico’s solar; and PDVSA’s fuel sale.




Last Week in a Minute or Less


Central America. Nicaragua cut its power subsidy; Panama’s geothermal production is heating up; and El Salvador is paying less for power thanks to renewables.


Greater Antilles / Northern Islands. Tullow got an extension in Jamaica; Cuba may leave kitchens without gas; and Sonnedix secured funding for Puerto Rico’s solar.


Lesser Antilles / Southern Islands. Antigua got a discount on its Petrocaribe debt; Trinidad & Tobago and Haiti will receive UAE’s support on climate resilience; and BPTT published an EOI for suppliers.


South America’s Caribbean Coast. Noble secured Maersk for Colombia; PDVSA is relying on partners to sell its oil; and Colombia’s energy minister is not a demon.


Déjà vu all over again. Last week’s readers were particularly interested in more US sanctions for Venezuela (Platts – English); Apache and Total’s discovery (Platts – English); and Asia’s thirst for Latin American crude (Platts – English).



Government & NGO


The World Bank has low expectations for Haiti’s economy. The World Bank is pessimistic about Haiti’s economy as its GDP is expected to continue in the red in 2020 at -1.5% and in 2021 at -0.5% (Haiti Libre – English). In 2022, Haiti’s economy is expected to rebound at 1.4% growth.


Guatemala and the US signed an agreement to boost investment. President Giammattei signed a memorandum of understanding with the United States International Development Finance Corporation to receive US$1m to stimulate the private sector (El Periódico – Spanish).


Guatemala will attract Spanish investment. With the new government, Spanish companies are interested in investing in health, infrastructure, and finance (DCA – Spanish). Businessmen are asking for legal certainty to secure their investments.


Nicaraguan businessmen complained about the DUCA cost. The private sector board asked to end the 233% increase in the electronic process cost of the Only Central American Transit Declaration (DUCA) (La Prensa – Spanish). The increase would impact international trade.




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Oil & Gas Upstream


Tullow got an extension in Jamaica. United Oil & Gas said that Tullow Oil reached an agreement with the Jamaican government to extend the initial exploration license period by six months (ProActive Investors – English). The “drill or drop” decision will have to take place before July 31, 2020.


Ecopetrol finished up its first seismic operation in deep waters. Ecopetrol developed a study in an area of 2,000 square kilometers of 3D seismic to obtain information to identify potential oil and gas reserves (World Energy Trade – Spanish). For the operation, the SW Amundsen boat was contracted.


Noble secured Maersk for Colombia. Noble Energy awarded Maersk Drilling a contract for the drillship Maersk Valiant in a one-well campaign offshore Colombia (World Oil – English). The contract will last 65 days, and it has a value of US$18.2m, including mobilization and demobilization.


BPTT published an EOI for suppliers. BP Trinidad & Tobago extended an Expression of Interest (EOI) for qualified and experienced suppliers (Energy Now – English). The goal is to understand the local market capability and local content of suppliers for goods and services in line with their operational demand.


Colombia’s Energy Minister defends fracking. Mines and Energy Minister María Fernanda Suárez said she “is not a demon” for defending fracking. The government will present the benefits of the technique as well as the pilot projects (El Tiempo – Spanish).



Liquid Fuels Mid-Downstream


PDVSA is relying on partners for its oil sales. In order to avoid US sanctions, Venezuela is getting its crude to market through its joint venture partners, including Chevron (Reuters – English). The agreement does not violate sanctions if the sale proceeds are used for paying a venture’s debts.


Antigua got a discount on its Petrocaribe debt. The Antigua and Barbuda government welcomed the 50% debt reduction on PetroCaribe, which could mean the cancellation of EC$250m (English). A government statement said that in June 2018, the assets of the PetroCaribe program were transferred to the ALBA Bank to capitalize it.


PDVSA is putting its fuel on sale. PDVSA negotiated the sale of 6.8 million barrels of 3% sulfur fuel oil in January with large price discounts to reduce its inventories (Platts – English). The Amuay refinery’s inventories are at 9.8 million barrels, close to its 10 million-barrel maximum capacity.


Venezuela oil exports to India are increasing. Venezuela started the year with 730,000 barrels per day of crude exports thanks to India-bound cargoes (Argus Media – English). The cargo came from the PetroMonagas joint venture between PDVSA and Rosneft.



Natural Gas Mid-Downstream & LNG


New Fortress Energy plans to satisfy the Caribbean’s LNG needs. New Fortress is building a 3.6 million gallon-per-day LNG plant in Pennsylvania to export LNG to the Caribbean (Fool – English). S&P said exports to Caribbean countries are increasing and were up 25% year over year in September.


Cuba may leave kitchens without gas. The Cuban government warned its citizens to prepare for cooking gas shortages due to the effect of US sanctions on the island. Liquid petroleum gas could be scarce for Cubans who either buy at state-subsidized prices or market prices (Jamaica Gleaner – English).


Naturgas will keep looking for new gas sources. The CEO of Naturgas said that it is necessary to keep looking for new sources of natural gas to secure fuel reserves in the upcoming years (El Heraldo – Spanish). The company Transportadora de Gas Internacional supports the Colombian government’s Supply Plan and the regasification plant.



Electric Power & Renewables


Panama’s geothermal production is bubbling. Geothermal energy increased between January and November 2019 by 3% compared to the same period in 2018 (Central America Data – Spanish). Renewable energies produced 5.385 million kwh of power, 31% less than the 7.827 million kwh produced in the same period in 2018.


El Salvador is paying less for power thanks to renewables. Siget announced that the price of energy will be 9.74% lower in the first quarter of 2020 due to an increase in renewable energy generation (El Mundo – Spanish). Solar energy has been the main contributor with the incorporation of 10 plants in the Bósforo project.


Nicaragua cuts its power subsidy. Nicaragua made the third cut to power subsidy tariffs (La Prensa – Spanish). The cut will affect clients who consume between 100 and 150kwh per month; up until December, the Nicaraguan government paid between 40% and 30% of the total tariff.


Sonnedix secured funding for Puerto Rico’s solar. Sonnedix obtained US$15m in financing for solar plants in Puerto Rico (New Energy Events – English). The company already has two operational solar plants on the island with a combined capacity of 50MW.


The Dominican Republic is installing car charging stations. The National Energy Commission (CNE) is working on the regulations and requirements to issue permits to install charging stations for electric vehicles (Dominican Today – English) (Acento – Spanish). The commission will also decide on location, installation, and maintenance.


Trinidad & Tobago and Haiti will receive UAE’s support on climate resilience. The UAE-Caribbean Renewable Energy Fund (UAE-CREF) continues with the plan to build climate-resilient renewable energy projects in 16 Caribbean countries, including the Dominican Republic, Haiti, Guyana, Grenada, Saint Kitts & Nevis, Trinidad & Tobago, and Suriname (New Energy Events – English).



Old School Social


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


The SPE Latin American and Caribbean Petroleum Engineering Conference is scheduled for March 17-19 in Bogotá.



Lateral Thinking


Archaeologists have found proof of Caribs presence in the Bahamas. A new study analyzed more than 100 skulls from the Caribbean dated between 800 and 1542, and the researchers concluded that the Carib people were present in the Bahamas as early as A.D. 1000 (Live Science – English).



Quote of the Week


“Sólo la unidad del pueblo y la solidaridad de sus dirigentes garantizan la grandeza de las naciones.”


“Only the unity of the people and the solidarity of their leaders guarantee the greatness of nations.”



-Andrés Bello (1781-1865), Venezuelan philosopher, poet, and educator.




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