The Weekly Brief: Greater Caribbean


July 27, 2020 edition–Heritage Petroleum’s plans at the North West District; Curacao’s new search; and the Payara project’s delays.



Last Week in a Minute or Less


Central America. El Salvador paid less for its power bills; Nicaragua is paying too much for power; and the COVID-19 pandemic hit Guatemala’s fuel demand.


Greater Antilles / Northern Islands. Venezuela’s opposition suspects Cuba is reselling oil; the Dominican Republic and the World Bank will cooperate on energy; and Jamaica will use energy policy to recover from COVID-19.


Lesser Antilles / Southern Islands. Heritage Petroleum is considering the North West district; Curacao and Klesch’s deal is off; and Power52 will finish a project in the BVI.


South America’s Caribbean Coast. Decision delays at the Payara project could cost money; Colombia is pushing to tap offshore oil and gas; and Colombia relaunched the Pacific LNG import terminal.


Déjà vu all over again. Last week’s readers were particularly interested in Guyana’s new oil authorities (Argus Media – English); Venezuela’s illegal tank ships (El Financiero – Spanish); and Trinidad & Tobago’s interest in hydrogen (New Energy Events – English).



Government & NGO


Suriname’s new president faces a difficult economic context. The new president, Chandrikapersad Santokhi, inherited a damaged economy in the South American nation, having to determine what the country owes its creditors, and analysts say it may need to work out a debt rescheduling plan with the International Monetary Fund (Jamaica Gleaner – English).


The Dominican Republic’s exporters want to work with the new government. The Dominican Exporters Association elected a new board of directors and expects to work together with the new government on the first 100-day program for the National Plan for the Promotion of Exports (Dominican Today – English).


Colombia’s economy contracted 16.65% in May. The Caribbean nation’s economy contracted 16.65% in May compared to the same period a year ago due to the measures taken to curb the spread of COVID-19 that hit production (Reuters – English). In April, Colombia’s economy contracted 20.5%.


Cuba celebrated a day without COVID-19 local transmissions. For the first time since the outbreak, the Caribbean island had no new domestic cases of COVID-19 (Reuters – English). Cuba moved into the final phase of resuming normal activities with masks and social distancing.



Oil & Gas Upstream


Decision delays at the Payara project could cost money. If the start of the project is delayed by a year from the original 2023 target date due to delays in sanctioning the ExxonMobil-led Payara project offshore Guyana, the result would be a gap of more than US$1.5bn in revenues for the project partners and the country (Platts – English).


Heritage Petroleum is considering the North West District. Heritage Petroleum has the goal of identifying and exploring opportunities within the onshore North West District area. Heritage Petroleum presented an expression of interest (EOI) for joint venture partners for the area (Energy Now – English).


Colombia is pushing to tap offshore oil and gas. The new deputy energy minister said the Caribbean country is boosting its offshore oil and gas development (BN Americas – English). A series of deepwater wells are scheduled to be drilled next year as operators meet early commitments for exploration and production contracts.


Guyana’s politics may jam oil and gas exploration. The future of Guyana’s oil and gas industry is complicated due to the controversy related to the national elections (Forbes – English). The US Secretary of State urged President David Granger to “step aside” and respect the results of the election.



Liquid Fuels Mid-Downstream


The US Treasury extended Venezuela’s order blocking the Citgo seizure. The US Department of Treasury extended for three months the order preventing creditors of PDVSA from taking control of US refiner Citgo as a result of missed payments on its 2020 bonds (Platts – English).


US has Venezuela diesel swaps in sight. The US government is reassessing diesel-for-crude swaps that have been exempt from Venezuela’s oil sanctions on humanitarian grounds (Argus Media – English). Repsol, Eni, and Reliance have been engaging in these transactions with PDVSA with clearance from the US Treasury.


Curacao and Klesch’s deal is off. Curacao is looking to lease oil storage on the island after the termination of a preliminary agreement with Klesch to take over the operation of its refinery and terminal (Argus Media – English). The 335,000 b/d refinery and Bullen Bay terminal used to be part of the PDVSA network.


The COVID-19 pandemic hit Guatemala’s fuel demand… Fuel demand dropped 11.36% in the first five months of 2020 compared to the same period in 2019 (Prensa Libre – Spanish). In those months, 15,489,750 barrels of fuel were consumed, 1,985,244 barrels less than in the same period the previous year.


…and fuel demand also dropped 39.2% in the Dominican Republic. Fuel demand fell 39.2% during April and May as a result of the COVID-19 lockdown and the halt of non-essential activities (Dominican Today – English). The level plummeted to 151.74 million gallons in April and May of 2020; there were 249.69 million gallons spent in that time frame last year.


Venezuela’s opposition suspects Cuba is reselling oil. The US envoy of the Venezuelan opposition leader pledged to investigate the possibility that Cuba is reselling oil and fuel that Venezuela ships to the Caribbean island (WKZO – English). According to President Nicolás Maduro, Venezuela was “getting nothing back” from its shipments to Cuba.



Natural Gas Mid-Downstream & LNG


The NGC and BHP reached an agreement on gas sales for the Ruby field. The National Gas Company of Trinidad and Tobago Limited (NGC) and BHP announced the completion of negotiations of a Gas Sales Agreement for the Ruby Field (Energy Now – English). The Ruby field is expected to be commissioned in the fourth quarter of 2021.


Andalusian Energy has the Latin American gas market in sight. Andalusian Energy has a compressed natural gas export project set to start in 2022 (BN Americas – Spanish). The company belongs to NBR Global and Nearshore Natural Gas, focused on the CNG project and technology development.


The US may ease its LNG export burdens to control the Caribbean market. The US Department of Energy is considering a proposed rule change that will eliminate unnecessary red tape and increase exports to the Caribbean region (Real Clear Energy – English). The region is expected to replace oil-based and other high-polluting electricity sources.


Colombia relaunched the Pacific LNG import terminal. The Colombian government published a new timetable for the tender for the design, construction, and operation of an LNG regasification facility in the Pacific seaport city of Buenaventura (JDSUPRA – English). The project will ease the gas shortage Colombian internal demand is expected to cause in the coming years.



Electric Power & Renewables


The Dominican Republic and the World Bank will cooperate on energy. The new Dominican Republic authorities and representatives of the World Bank met to discuss strengthening governance in the electricity sector and expanding efforts in mechanisms of greater transparency (Dominican Today – English).


Power52 will finish a project in the BVI. The US-based solar energy company was awarded the contract to finish the Anegada Hybrid Renewable Energy & Battery Energy Storage System project on the sister island (BVINews – English). Power 52 was the successful bidder from among four other competitors.


COVID-19 weakened the region’s utility liquidity. Lower electricity demand and government programs introduced to provide relief during the COVID-19 pandemic are hitting the liquidity of some generation companies and distribution companies in Central America and the Caribbean (Dominican Today – English). Electricity demand declined 13% across all of Central America and the Dominican Republic year over year in May.


El Salvador paid less for power. Energy prices in El Salvador will go down from July to October due to an increase of the share of renewable generation (El Mundo – Spanish). Another given argument for the reduction was the drop in oil prices, although the government denied it (El Mundo – Spanish).


Jamaica will use energy policy to recover from COVID-19. Jamaica will boost its energy policy to create a recovery package after the COVID-19 pandemic (PHYS – English). The goal is to cut emissions from the forestry and farming sectors by almost one-third over the next decade.


Colombian rural families will use solar energy. The Energy Ministry approved resources for almost US$72m to finance 33 rural power projects for 14,472 families (PV Magazine – English). The projects will use solar energy to power up their homes.


Nicaragua is paying too much for power. According to a study, the government is forcing consumers to assume the inefficiency of the Disnorte-Dissur energy distribution company, as 12% of the losses were included in their bills that have now increased by 14% (La Prensa – Spanish).



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



Lateral Thinking


The Caribbean coral reefs should learn resilience from the Eastern Tropical Pacific ones. A recent study by Colombian researchers analyzed coral cover data for the area from Baja California to the Galapagos Islands from 1970 to 2014 and found that the coral there, unlike reefs in the Caribbean and Indo Pacific, recovered from El Niño-induced bleaching (Eureka Alert – English).



Quote of the Week


“Beware, my body and my soul, beware above all of crossing your arms and assuming the sterile attitude of the spectator, for life is not a spectacle, a sea of griefs is not a proscenium, and a man who wails is not a dancing bear.”



– Aimé Césaire (1913-2008), Afro-Caribbean author and politician from the region of Martinique.



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