June 8, 2020 edition–Tropigas’ new market; Melbana’s farmout in Cuba; and Colombia’s new dates for the oil round.
Last Week in a Minute or Less
Central America. Tropigas will supply LNG to Panamá and Costa Rica; Nicaragua is making progress on its energy program; and AES worked on El Salvador’s power after the storms.
Greater Antilles / Northern Islands. Melbana Energy farmed out Cuba’s onshore block to Sonangol; United will push through with its drilling plans in Jamaica; and the Dominican Republic’s power relied less on fuel oil.
Lesser Antilles / Southern Islands. Trinidad & Tobago and Venezuela are friends again, but the natural gas cooperation is still out; and the IMF reviewed Barbados’ economy.
South America’s Caribbean Coast. Suriname may soon follow in Guyana’s steps; Colombia’s ANH changed the rules and dates for the next oil round; and Venezuela changed its gas policy.
Government & NGO
Honduras okayed bonds to pay its electricity debts. The Honduran congress approved the issuance of US$600m in bonds to pay debts of the state-owned power company (ENEE) with power generators and local banks (El Economista – Spanish). ENEE faces a US$2.3bn debt.
The IMF reviewed Barbados’ economy and approved The Bahamas’ disbursement. The International Monetary Fund (IMF) concluded Barbados’ extended agreement third review, allowing authorities to draw about US$139m (IMF – English). The IMF approved the request for emergency financial assistance made by The Bahamas of about US$250m (IMF – English).
The COVID-19 pandemic hit Latin American exports. According to the Inter-American Development bank, the value of exports from the region contracted by 3.2% in the first quarter compared to the same period in 2019 (IADB – English). The contraction is explained by the continuation of a 2019 downward trend.
JP Morgan expects Guatemala’s economy to contract 2.9%. JP Morgan forecasts a 2.9% contraction for the Central American nation in 2020. Guatemala’s central bank plans to review its forecast for the year in July (El Periódico – Spanish).
Oil & Gas Upstream
Melbana Energy farmed out Cuba’s onshore block to Sonangol. The Australian company is farming out up to 70% of its stake in an onshore oil block in Cuba to Sonangol. Sonangol will fund 85% of the cost of the drilling and exploration of two wells in Block 9 for a 70% participating interest in the project (Small Caps – English).
Colombia’s ANH changed the rules and dates for the next oil round. Colombia’s National Agency of Hydrocarbons (ANH) established new dates and rules for the next round of oil blocks. The new map will be published in July and the first list of companies will be published on September 21 (Valora Analitik – Spanish).
United will push through with its drilling plans in Jamaica. United Oil and Gas Limited plans to continue looking for a drilling partner despite the exit of Tullow Oil (Jamaica Gleaner – English). United has informed the Jamaican authorities, and discussions have been initiated with the government.
Colombia’s oil production dropped 10.6% in April. The Mines and Energy Ministry said that the Caribbean nation’s oil production in April was 796,164 barrels per day, a 10.6% fall compared to the same month in 2019 (Dinero – Spanish). The reason was the fall in oil prices.
Suriname may soon follow in Guyana’s steps. Preliminary results from the parliamentary elections gave 20 seats to the main opposition Progressive Reform Party (VHP), which pledged to encourage oil development as part of a “reconstruction” of the country’s natural resources (Argus Media – English).
The Bahamas and the Dominican Republic will open up by July 1. The Bahamas will reopen its borders to international travel by July 1 after the COVID-19 lockdown (Travel Market Report – English). In the Dominican Republic, the tourism sector will reopen from July 1, including international flights (Dominican Republic – English).
Liquid Fuels Mid-Downstream
Venezuela changed its gas pricing policy. President Maduro announced that Venezuelans can now buy gasoline at international market prices as well as a limited amount of subsidized gasoline each month (Jamaica Gleaner – Spanish) (El Financiero – Spanish). Subsidized gasoline will be sold at 5,000 bolivars (2.5 US cents) per gallon.
Colombia extended the flexible tariffs for pipeline transportation. Cenit decided to extend the flexible tariffs for pipeline transportation by four months (Diario – Spanish). Cenit also included discounts on the tariffs of between 6% and 21%, depending on the section and the amount of crude transported.
The Dominican Republic hit the gas on fuel demand. Fuel consumption increased by 30% in May compared to April (Dominican Today – English). The restrictions on mobility during the COVID-19 pandemic caused a drop of between 16% and 19% in fuel tax collections (Dominican Today – English).
Iran plans to continue helping Venezuela. Iran said more cargoes will be sent to Venezuela or any other customer on demand, despite the US threats to stop shipments of its fuel (Platts – English). Iran sold 210,000 mt of gasoline to Venezuela.
Libre Abordo will no longer swap oil for food in Venezuela. The Mexican company said it was bankrupt and that President Maduro ended the oil-for-food agreement exchanging Venezuelan crude for water trucks (Reuters – English). Mexico and the US are investigating the company for the exchange agreement with Venezuela (El Economista – Spanish).
Natural Gas Mid-Downstream & LNG
Tropigas will supply LNG to Panamá and Costa Rica. Tropigas Natural signed a contract with Colón LNG Marketing to supply LNG through tanker trucks for the Panamanian and Costa Rican markets (ANPanamá – Spanish). The agreement started June 1 (La Estrella – Spanish). The plant is located on the island Telfers.
Colombia’s natural gas demand keeps peaking. The Colombian Association of Natural Gas said they increased their service to 10 million clients (Valora Analitik – Spanish). Thermal plants increased their natural gas demand by 36%, as did refineries by 23% (Valora Analitik – Spanish).
Trinidad & Tobago and Venezuela are friends again, but the natural gas cooperation is still out. Trinidad and Tobago offered explicit support for Venezuela’s government, but will not revive the natural gas cooperation in the near term due to a drop in industrial demand (Argus Media – English).
Jamaica bets on natural gas and biodiesel. The Jamaica Urban Transit Company (JUTC) plans to introduce a biodiesel project and electric buses together with the compressed natural gas (CNG) project to power five buses within its fleet (JIS – English). The JUTC has also built a CNG terminal at the Portmore Depot to fuel the buses.
Electric Power & Renewables
Shell requested an IPP license in The Bahamas. The company became the first to apply for an independent power production (IPP) license in the Caribbean nation (Tribune 242 – English). The permission is needed to own and operate its new multi-fuel power station at Clifton Pier and the LNG regasification terminal.
Colombia allowed imports of renewable equipment and self-supply projects. Private ports can import equipment required to build renewable energy projects. The ports will have to request the permission before the National Agency of Infrastructure (PV Magazine – Spanish). More than 650 families will finally have power through a solar system (PV Magazine – Spanish).
Nicaragua is making progress on its energy program. The Energy and Mines Minister said Nicaragua has reached 97.69% coverage in the country’s electricity supply (Prensa Latina – Spanish). Between 2020 and 2021, 18 new power substations will be awarded.
AES worked on El Salvador’s power after the storms. AES El Salvador re-established power service in different parts of the country hit by tropical storm Amanda (El Economista – Spanish). The company recommended citizens stay away from cables and power equipment and not touch them if found on the ground.
The Dominican Republic’s power relied less on fuel oil. Power generation companies in the Caribbean nation reduced their use of fuel oil to produce energy in the last year but increased their coal consumption with the operation of the Punta Catalina plant (Diario Libre – 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 Latam Mobility Summit will be held June 10-11 at Orquideorama, Botanical Garden, in Medellín.
The South America Energy Series is scheduled for June 20 at JW Marriott in Bogotá.
The SPE Latin American and Caribbean Petroleum Engineering Conference was rescheduled to July 28-30 at the Ágora Convention Center in Bogotá.
Caribbean DNA studies speak of migration and mingling. Genetic anthropologists have studied ancient Caribbean DNA of 52 individuals in Cuban sites from 3,200 years ago to 700 years ago; it suggests how descendants of the first migration waves of inhabitants interacted with newcomers arriving 2,800 years ago (Science Mag – English).
Quote of the Week
“Without commitment, you cannot have depth in anything, whether it’s a relationship, a business or a hobby.”
– Judith Neil Strauss (1973), Amereican-Kittitian author, journalist, and ghostwriter.
We hope you have a productive week. Please send any news, comments, or DNA findings to CaribbeanWeekly@energynarrative.com.
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