The Weekly Brief: Greater Caribbean


July 6, 2020 edition–Aruba’s fuel storage; LNG bunkering; and Cascadura-1ST1’s promises.



Last Week in a Minute or Less


Central America. Honduras’ textile industry will be powered up by the sun; and Panamá’s power generation is still down.


Greater Antilles / Northern Islands. Bermuda started bunkering LNG for the cruise industry; the Dominican Republic has 800 more jobs thanks to renewables; and Saharan dust hit Jamaica’s power.


Lesser Antilles / Southern Islands. Touchstone got good news from Cascadura-1ST1; Saint Lucia is going green; and the St. Croix refinery will start working soon.


South America’s Caribbean Coast. Maersk Drilling signed a well exploration contract with Petronas; Colombia has scheduled the Pacific LNG tender; and Venezuela’s crude production dropped to 280,000 barrels per day.


Déjà vu all over again. Last week’s readers were particularly interested in PREPA’s contract with EcoEléctrica (New Energy Events – English); PDVSA’s offer to pay for refinery work (Reuters – English); and Jamaica’s power bills (Jamaica Gleaner – English).



Government & NGO


Moody’s downgraded The Bahamas to Ba2. The international rating agency downgraded The Bahamas’ government long-term issuer and senior unsecured ratings to Ba2 from Baa3 (Moodys – English). The reason is the shock caused by the coronavirus crisis and its effect on funding conditions.


Colombia will get only COL$5bn from oil. The tax income from oil extraction will drop by 0.14% of GDP (COL$1.4bn) in 2020 due to the fall in oil prices and by 0.4% of GDP for Ecopetrol’s income (Dinero – Spanish). 2020 income payments will be at 0.08% of GDP.


The IADB will help Trinidad & Tobago fight the COVID-19 crisis. The Inter-American Development Bank approved a US$100m loan to help Trinidad & Tobago implement fiscal and financial measures and finance its public health response against the COVID-19 crisis (IADB – English).


Jamaica maintained its interest rate. Jamaica’s central bank maintained its key interest rate steady to keep inflation within its target of 4.0% to 6.0% over the next two years (Central Bank News – English). The Bank of Jamaica left its rate on overnight deposits at 0.50%.


Bermuda may take a year to recover. The government expects the island’s economic recovery to take more than a year, and about 9,000 people remain out of work today (Royal Gazette – English). The goal is to have economic growth create job growth.



Oil & Gas Upstream


Venezuela’s crude production dropped to 280,000 barrels per day. Crude production by the state-owned company fell to 280,000 barrels per day because of full storage capacity and the drop in exports (Platts – English). The drop is the largest since 2002.


Touchstone got good news from Cascadura-1ST1. Touchstone obtained very encouraging results from its latest tests on the Trinidadian Cascadura-1ST1 reservoir (Energy New – English). Gas analysis indicated sweet, liquid-rich natural gas with no hydrogen sulfide and no entrained water.


Maersk Drilling signed a well exploration contract with Petronas. The semi-submersible rig Mærsk Developer will be used by Petronas to drill a one-well exploration campaign in Block 52 offshore Suriname (Energy Now – English). The contract will start in the third or fourth quarter of 2020 and will last 75 days.


The fracking debate continues in Colombia. Lawmakers and the Colombia Free of Fracking Alliance filed a complaint that the government is not following the Supreme Court’s conditions to continue with pilot fracking projects (Prensa Latina – Spanish). They argue the decree does not consider the unsolved environmental impacts.



Liquid Fuels Mid-Downstream


Iran clarified its gasoline deal with Venezuela. According to Iranian oil minister Bijan Zanganeh, Iran exported gasoline to Venezuela under a “commercial deal,” with the gasoline being sold at current prices (Platts – English). Depending on the negotiations between both nations, exports could continue.


BP will sell its petrochemical business to INEOS. BP agreed to sell its petrochemicals business to INEOS for US$5bn. The sale would include BP’s 36.9% stake in the Atlas methanol plant in Trinidad (Energy Now – English). The businesses have interests in 14 manufacturing plants in Asia, Europe, and the US.


US removed sanctions on four oil shippers. After promising to put an end to oil trading at Venezuelan ports, the US Treasury Department removed sanctions on four Greece-linked shippers and tankers (Platts – English). In June, the Union of Greek Shipowners said it would stop commercial activity with Venezuela after oil tankers managed by Greek companies were blacklisted.


Venezuela is exporting oil like it was 1943. The Caribbean nation’s oil exports fell to their lowest level since 1943, with 17 cargoes in June carrying 379,000 barrels per day of crude and refined products (Economic Times – English). The low volume was 18% below May exports.


Guyana is considering 19 companies for its oil. Guyana’s government made a list of 19 companies from which to select an agent for marketing its share of crude production (Economic Times – English). The list includes oil majors, and was drawn from more than 30 oil firms that submitted expressions of interest for the contract in April.


The St. Croix refinery will start working soon. Limetree Bay Ventures is finishing construction at the St. Croix plant (Reuters – English). The repairs produced a more than US$1bn cost overrun and delayed production to late summer.


Aruba is considering an oil storage lease. The Caribbean nation is evaluating bids from three parties for an oil storage lease. Aruba has 10 storage tanks available for leasing, with capacity for 665,000 barrels of clean products (Argus Media – English).



Natural Gas Mid-Downstream & LNG


Bermuda’s LNG bunkering for the cruise industry started. The Kairos, a new breed of ship managed by a company with offices in Bermuda, transferred LNG fuel to one of the first LNG-fueled cruise ships (Royal Gazette – English).


Colombia has scheduled the Pacific LNG tender. The contract to build and operate the second LNG import terminal in the Caribbean nation will be awarded in April 2021 (BN Americas – English). The presentation of financial and technical proposals was programmed for February 17, with counteroffers scheduled on March 23.


Natural gas is now powering more of the Dominican Republic. The Gasoducto del Ese complied with their natural gas conversion schedule with the first interconnection section with the Quisqueya I and II power plants. The work for the interconnection of the San Pedro de Macorís Electric Company (CESPM) is almost completed (Dominican Today – English).



Electric Power & Renewables


Saint Lucia is going green. Saint Lucia and the Institute for Environmental Analytics partnered up to support the island’s transition from fossil fuels to renewable energy (Energy Now – English). Saint Lucia is one of six Small Island Developing States (SIDS) to benefit from a £3.8 million investment from the UK Space Agency IPP in RE-SAT.


Saharan dust hit Jamaica’s power. JPS warned utility customers that Saharan dust could contaminate power production infrastructure, causing short circuit conditions (New Energy Events – English). JPS is working to restore service to affected customers. Solar panels may reduce power production due to the effect of the dust.


Panamá’s power generation is still down. Due to the restrictions caused by the COVID-19 pandemic, power generation in May reached 859 million  kWh, 11% less than the amount reported in the same period in 2019 (Central America Data – Spanish).


Honduras’ textile industry will be powered up by the sun. The EPC company and SMA partnered in a solar self-supply project for the textile company Pinehurst MFG (PV Magazine – Spanish). The 1,687KWp project has 4,440 solar panels installed and 21 investors.


Ingeteam will update its Caribbean plants. The Spanish company will optimize the performance of various renewable energy plants in the Caribbean and Central America (PV Magazine – Spanish). The application is ongoing and will start optimizing the performance in six months.


The Dominican Republic has 800 more jobs thanks to renewables. According to the National Commission of Energy, renewable energy power generators created 872 direct jobs between January and June in 2019 (PV magazine – Spanish). The research showed that projects boost economic development in the area.



Old School Social Goes Viral


(Editor’s note: For the duration of the COVID-19 outbreak, this section will refocus on announcements of event delays or cancellations, events that are moved online, and scheduled webinars and public conference calls. Stay safe!)


The Virtual Panel: Caribbean Energy Security will be held July 22.


The SPE Latin American and Caribbean Petroleum Engineering Conference was rescheduled to July 28-30 at the Ágora Convention Center in Bogotá.



Lateral Thinking


The IADB expects Latin American and the Caribbean to suffer tourism shocks. According to a report by the Inter-American Development Bank, Latin America and the Caribbean will suffer an unprecedented economic shock due to the sharp downturn in tourism (IADB – English).



Quote of the Week


“Pero el tiempo es terco y pasa y todo vuelve…”


“But time is stubborn and goes away and everything comes back…”



-Augusto Monterroso (1921-2003), Honduran-Guatemalan writer.



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