The Weekly Brief: Greater Caribbean


July 9, 2018 edition–Canacol’s gas discovery; Belco’s finance; and Venezuela’s oil trouble.




Last Week in a Minute or Less


Central America. Natural gas ships can cross the Panama Canal at night again; Nicaragua’s crisis affected its economy; and T&T’s ANSA McAL will invest in a Costa Rica wind park.


Greater Antilles. Sunrun is in Puerto Rico; the DR tries to finish up Punta Catalina; and Cuba’s Cienfuegos Bay is almost clean of fuel residue.


Lesser Antilles. T&T and Venezuela negotiated a cross-border gas field; the St. Croix oil refinery will restart by 2019; and Bermuda will enjoy a new solar rebate scheme.


South America’s Caribbean Coast. Venezuela’s drop in oil production hit India; Colombia’s hydrocarbons boosted the value of its exports; and Guyana has the lowest debt-to-GDP ratio in the Caribbean.


Déjà vu all over again. Last week’s readers were particularly interested in Belco’s new power station (English); Russian oil in the Caribbean (English); and the Dominican Republic excess of power (Spanish).



Political Economy


Nicaragua’s crisis takes a toll on its economy. According to Manuel Orozco, Nicaragua is now in the attrition stage of the conflict (Spanish), with all the actors needing to recover their strength. The government said GDP growth has been revised since the start of the crisis, leaving it at between 0.5% and 1.5% (Spanish).


The IMF visited Honduras and negotiated with Barbados. The International Monetary Fund forecasts Honduras will grow around 3.75% in 2018-2019 (English), reflecting worsening external conditions. Barbados’ negotiating team started discussions with the IMF, which will continue through July 12 (English).


The Bahamas cut costs with digital governance. The Bahamas will reduce the time and cost of administrative procedures by encouraging public sector digital transformation with a US$30m loan from the Inter-American Development Bank (IDB) (English). The goal is to raise the use of online government services by 70% by 2025.


Guyana has the lowest debt-to-GDP ratio in the Caribbean. Guyana’s external debt levels are below 50% of the GDP (English). Guyana had a debt level of 45.2% in 2017 and 46.4% in 2016, a healthy level compared to Barbados’ debt-to-GDP ratio of 145% in 2016.


The UNDP’s Barbuda recovery project will help the economy. The United Nations Development Program (UNDP) and the Antigua and Barbuda government’s developing recovery projects in Barbuda are significantly stimulating the national economy (English). The UNDP will invest another US$6m in rebuilding projects with the government of Antigua and Barbuda.



Oil & Gas Upstream


T&T and Venezuela continue negotiating a border gas field. The president of the National Gas Company of Trinidad and Tobago, Shell executives, and the Ministry of Petroleum officials negotiated a resolution for the cross-border gas field (English). A representative agreed to return to Caracas to settle the terms of the agreement.


The Petrojam scandal forced Wheatley out. Jamaica’s Cabinet decided to strip Dr. Andrew Wheatley of the energy portfolio and implemented a raft of changes at Petrojam’s oil refinery to provide transparency in the ongoing investigations (English). Petrojam is under investigation by four state oversight entities for corruption, fraud, and mismanagement.


China gave a hand to Venezuela’s oil production. China’s Development Bank approved a US$5bn loan for direct investments in production (English). The bank has okayed a direct investment of more than US$250m to increase PDVSA production.


Well Services completed T&T’s first West Coast natural gas campaign. Well Services drilled to end three well campaigns for the Iguana field in Block 1 (English), owned by DeNovo Energy Limited. The Well Services Rig 110 was the first local jack up rig and the first rig to install a platform subsea structure.



Oil & Gas Downstream


St. Croix oil refinery will restart by 2019. The owners of the US Virgin Islands’ oil refinery in St. Croix plan to invest US$1.4bn to modernize and restart a portion of the plant (English). The owners have agreed to start fuel production late in 2019 (English).


Venezuela’s falling oil production hit India. Venezuela’s crude shipments to India dropped by 21% in the first half of the year and added pressure to Indian refiners, as they have to diversify oil imports (English). Indian refiners are also preparing for a drastic reduction of oil imports from Iran.


Colombia’s exports value is up. The value of Colombia’s exports increased by 5% in May to US$3.6bn, propelled by oil sales that increased in value by 36.7% (Spanish). Almost 80% of the growth in foreign sales (Spanish) is related to fuel products and coal.


LNG ships can cruise the Panama Canal by moonlight again. The Panama Canal is cancelling the daytime restrictions for LNG ships after October 1st (Spanish). Only seven spaces have been saved for LNG per week and the current demand is 5.5 transits per week.


The Cienfuegos Bay is almost clean of fuel residue. The Oil Refinery Camilo Cienfuegos spilled oily waters in the Jagua Bay and recovery work has started to clean the bay (Spanish). More than 60% of the bay was affected by pollution and only 1% remained to be cleaned.



Renewables & Electricity


T&T’s ANSA McAL bet on Costa Rica’s wind park. MPC Caribbean Clean Energy Fund and ANSA McAL Limited will invest in the 21MW wind park in Costa Rica Tilawind (English). The MPC has also invested in the 51MWp Paradise Park Solar PV greenfield project in Jamaica.


Sunrun is running in Puerto Rico. The residential solar energy firm began operations in Puerto Rico, offering solar-as-a-service and home batteries, and training 40 people (English). The company reached collaborative agreements with Maximo Solar and will try to establish more with others.


The DR tries to finish up Punta Catalina. The Dominican Republic is exploring options to finish the construction of the Punta Catalina thermoelectric plant in the expected period, since the plant’s investment is almost at the limit (Spanish). The project was estimated at US$1.9bn, but the Odebrecht-Tecnimont-Estrella consortium asked for US$708m more.


BPL is working on a renewables framework. Bahamas Power and Light (BPL) plans to complete the framework for utility-scale energy generation (English). Small-scale renewable has been in place since March 2017, and a framework for large scale renewables is needed because there is a lot of interest in the market.


Bermuda will enjoy a new solar rebate scheme. Bermudas’ government plans to re-establish rebates for solar energy installations (English). The goal is to help low-income households reduce their power bills. The past program connected 220 homes in five years.



Old School Social


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


The 5th Geothermal Congress for Latin America and the Caribbean will be held July 17-18 at the Hilton Reforma in Mexico City.



Lateral Thinking


A shipwreck was located with a space map. A map created in the 1960s by NASA identifying more than 100 anomalies in the Caribbean that may be shipwrecks was followed by researchers, who found six cannons from the 1700s (English). The finding indicates that other treasures are close.



Quote of the Week


“Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.”



-Alexander Hamilton (1755-1804), Founding Father of the US, born in Charlestown, Nevis.



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