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January 28, 2019 edition–Bonaire’s power storage; Curaçao’s refinery operator; and Venezuelan tensions.
Last Week in a Minute or Less
Central America. Guatemala is fighting over its transmission plan; Panama, Nicaragua, Costa Rica, and Guatemala lost power; and the Nicaraguan crisis hit gasoline demand.
Greater Antilles. A&A Lime Hall Development will challenge Jamaica’s expropriation; Trump threatens to tighten the US embargo on Cuba; and a new renewable energy park would be up and running soon in the Dominican Republic.
Lesser Antilles. Curaçao postponed picking a refinery operator; and Wärtsilä will help Bonaire with power storage.
South America’s Caribbean Coast. ExxonMobil continues drilling the first of two wildcat wells in Guyana; Venezuela and Colombia fight over fuel restrictions; and Venezuelan sanctions affect crude oil futures.
Déjà vu all over again. Last edition’s readers were particularly interested in Guyana’s solar (English); the Dominican Republic’s inclusion in Irena (Spanish); and ExxonMobil’s resumed drilling (English).
Political Economy
Trump may cut aid to Central America over the migrant caravans… Almost 1,000 Central American migrants crossed the southern Mexican border (English). President Trump threatened to cut off aid to Honduras, Guatemala, and El Salvador over a new wave of caravans (English).
…and threatened to tighten the US embargo on Cuba. The Trump administration is considering strengthening the US trade embargo on Cuba (English), and President Díaz Canel condemned the threat (Spanish). The decision could unleash lawsuits against foreign companies that invested in Cuba.
The ELN claimed responsibility for a deadly bombing. The rebel group, National Liberation Army (ELN), took responsibility for the car bomb that killed 20 policemen at a police academy (English). The ELN said the attack was part of its fight with the government after more than a year of peace talks.
Tensions are running high in Venezuela. The US recognized the Venezuelan opposition leader Juan Guaidó as interim president (English). The head of Venezuela’s armed forces has backed President Maduro, warning that the country could end up in a civil war (English).
Oil & Gas Upstream
ExxonMobil continued drilling the first of two wildcat wells in Guyana. ExxonMobil started drilling the Haimara-1 exploration well offshore Guyana, which is 19 miles east of the Pluma-1 discovery, southeast from the Stabroek block. The Noble Tom Madden drillship will drill the second well, Tilapia, 1.3 miles west of the Longtail-1 discovery (English).
Citgo suspended operations at its oil refinery in Texas. The Venezuelan PDVSA’s treasure, Citgo, has idled the unit for “non-operational reasons,” according to the company, while sources point to economic reasons (English). Citgo has been running its refineries at lower rates due to the lack of spare parts and low flows of light crude.
Oil and gas divided the Caribbean on Venezuela. The divisions between the Caribbean countries was made clear in a vote by the Organization of American States to not recognize the government of president Maduro. Guyana, Jamaica, and the Dominican Republic voted in favor, while Trinidad and Tobago, negotiating natural gas deals with Venezuela, abstained (English).
Oil & Gas Downstream
Venezuelan sanctions affect crude oil futures. US sanctions on Venezuela’s oil sector lowered crude oil futures in the Asian market (English). US Gulf Coast refiners would have to replace 500,000 barrels per day of heavy crude (English).
A&A Lime Hall Development will challenge Jamaica’s expropriation. The company that offered US$100m for Venezuela’s 41% share of Petrojam’s refinery plans a challenge against the legislation to retake the stake (English). The legal argument would be a breach of the Constitution’s fundamental charter of property rights freedoms.
The Nicaraguan crisis hit gasoline demand. The political crisis has affected the country’s economic activity and fuel demand. Between January and November 2018, gasoline demand dropped to 7.22% compared to the same period in 2017 (Spanish).
Curaçao put off choosing a refinery operator. The government of Curaçao suspended the selection of a new operator for the Isla refinery until a study into corruption allegations during the search concludes (English). The Isla refinery started the search for a PDVSA replacement last year.
Haiti denied that fuel prices were going up. The Economy and Finance Minister published a statement denying the rumors circulating on social media that prices of petroleum products would increase. Taxi drivers protested, blocking streets over the shortage (English).
Venezuela and Colombia fight over fuel restrictions. Venezuela invoked the World Trade Organization’s (WTO) dispute settlement mechanisms against Colombia over restrictions placed on Venezuelan liquid fuels (English). Colombia had imposed measures limiting the distribution of liquid fuels from Venezuela to border municipalities and towns.
Renewables & Electricity
The IEEFA is not happy with PREPA’s new natural gas deal. The Institute for Energy Economics and Financial Analysis questions the way Puerto Rico’s government awarded New Fortress Energy contracts to convert two units at the San Juan power plant from oil to natural gas (English).
A new renewable energy park would be up and running soon in the Dominican Republic. The Renewable Energy Park of Ciudad Juan Bosch will be working in the first quarter of 2019 (Spanish). The park, covering 25,000 square meters, will have five energy production stations.
Wärtsilä will help Bonaire with power storage. The group was awarded a 6MW energy storage project contract for Bonaire (English). The energy storage system will enable the island to increase the use of renewables, providing the required grid stability and reliability.
Panama, Nicaragua, Costa Rica, and Guatemala lost power. A power cut left most of Panama and certain regions in Costa Rica, Guatemala, and Nicaragua without power. The Panamanian company explained the cut was due to an “event” in the national system (Spanish).
Guatemala is fighting over its transmission plan. The Constitutional Court found the agreement related to the Transmission Plan of Power Energy to be unconstitutional (Spanish). The Expansion Plan of the Power Transportation System was approved on March 20, 2013.
Old School Social
Events in the world beyond your screen—go see and be seen!
The 2nd Puerto Rico Grid Revitalization & Investment Forum is scheduled for January 28-29 at the Verganza Hotel San Juan, in Puerto Rico.
Puerto Rico 2019: What Lies Ahead will be held February 1 at the Inter-American Dialogue, in Washington, DC.
Lateral Thinking
The extinction of coral species put surviving corals in danger. Mary Hay, a regents professor in Georgia Tech’s School of Biological Sciences, noticed how quickly the Caribbean reefs decreased from a live coral cover of 60% in the 1970s to 10% throughout the Caribbean (English), with the extinction weakening reef systems.
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 its leaders guarantee the grandeur of nations.”
– Andrés Bello (1781-1865) Chilean-Venezuelan humanist, poet, and legislator.
We hope you have a productive week. Please send any news, comments, or coral protection strategies to CaribbeanWeekly@energynarrative.com.
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