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June 18, 2018 edition–ExxonMobil’s Liza development; Hispaniola’s renewables; and PDVSA’s troubles.
Last Week in a Minute or Less
Central America. The IMF expects Guatemala’s economy to grow slowly, but steadily; Fitch maintained El Salvador’s rating; and Panama increased its power offer.
Greater Antilles. Petrojam is awaiting a response from PDVSA about the refinery; Hispaniola pushes for renewables; and Puerto Rico’s power is under scrutiny.
Lesser Antilles. St. Eustatius and Saba bet on renewables; S&P lowered Barbados’ credit rating; and the Bahamians look for a VAT “waiver.”
South America’s Caribbean Coast. ExxonMobil hit the gas on Liza Phase 1 development; Colombia’s vote may compromise oil production; and PDVSA transferred oil at sea and considers refining foreign oil.
Déjà vu all over again. Last week’s readers were particularly interested in Haiti’s energy agenda (English); the IMF visit to Barbados (English); and the confirmation that traveling to Cuba is safe (English).
Political Economy
The IMF has moderate hopes for Guatemala and Barbados. The International Monetary Fund said Guatemala’s growth fell short, slowing to 2.8% in 2017 (English). The government of Barbados and the IMF will continue discussing the IMF-financed economic reform program (English). The IMF recommended that El Salvador make a 2.3% GDP adjustment (Spanish).
The Bahamians look for a VAT “waiver.” Bahamian contractors requested a six-month transition period to 12% VAT to prevent those locked into existing contracts from being affected (English). The Bahamian Contractors Association said the 4.5% point VAT increase could push contractors into a loss.
S&P lowered Barbados’ credit rating and Fitch maintained El Salvador’s. Standard & Poor’s lowered Barbados’ long-term foreign currency rating to “selective default” (English). Fitch maintained El Salvador’s B- risk rating (Spanish) due to the political polarization and the non-payment of the pension debt.
Barbados’ Prime Minister delivered election promises and new taxes. Prime Minister Mia Mottley announced the fulfillment of some election promises, including increasing pensions and scrapping a controversial tax. She also imposed a series of new taxes as part of her US$600m plan to rescue the country’s economy (English).
The IDB Invest and Banco Agrícola will back El Salvador’s small companies. The private sector institution of the Inter-American Development Bank signed a US$30m loan with Banco Agrícola in El Salvador. The goal is to increase access to financing for small and medium enterprises (English).
Oil & Gas Upstream
Canada covered the market left by Venezuela. Heavy Canadian crude was traded at record levels (English) in the US Gulf Coast due to the collapsing Venezuelan exports and the expected Iranian sanctions. The International Energy Agency forecasts that Venezuela’s oil production could fall to 800,000 b/d or lower next year (English).
ExxonMobil hit the gas on Liza Phase 1 development. ExxonMobil started the drilling of three offshore Guyana projects of the Liza Phase 1 development, which could produce more than 500,000 barrels of oil per day (English). ExxonMobil expects to start producing oil from the developments in 2020 (English).
Colombia’s vote may compromise oil production. Investors in Colombia’s oil are concerned about the presidential race, with the frontrunner pledging to revive oil production while the rival wants to end oil reliance (English). Considering current production, Colombia must invest in exploration to replace reserves.
Oil & Gas Downstream
PDVSA transferred oil at sea and considers foreign oil refining… Venezuela started testing sea-borne oil transfers to avoid crude delivery delays, forcing customers to use specialized equipment and pay higher costs (English). Due to Venezuela’s struggle to meet its obligations, PDVSA may process 57,000 barrels per day of foreign crude (English) at the Amuay refinery complex.
… and allegedly suspended oil delivery to Caribbean countries. PDVSA suspended 38,000 b/d of refined products (English) deliveries to eight Caribbean countries, although Antigua and Barbuda denied it (English). Citgo Petroleum plans to buy crude on the open market, compensating for declining supplies from PDVSA (English).
Ecopetrol faced a fuel leak at Río Magdalena. Ecopetrol activated a contingency plan with barriers to contain a fuel leak in the Magdalena River due to a break in the pipeline (Spanish). Ecopetrol is looking into the reason for the tear.
Petrojam is waiting for a response from PDVSA. Jamaica expects Venezuela to discuss the local proposals and inform the Science, Energy, and Technology Ministry on their decision (English). The relationship between Petrojam and PDVSA is under scrutiny regarding the integrity and professionalism of managing the refinery.
Renewables & Electricity
Hispaniola pushes for renewables… A delegation from the Taiwan Power Company met Haiti’s president to discuss the construction of 600km of transmission lines (French). Five institutions of the Dominican Republic power sector formed a team to propel the development of renewable energy, establishing norms for future auctions (Spanish).
…and so does St. Eustatius and Saba. Almost half of the power in St. Eustatius (46%) is sustainably generated. In Saba, it’s 20%, but it is expected to increase to 40% by 2019 (English). In St. Eustatius, the second phase of the solar park became operational in late 2017, while in Saba the first solar park became operational in February this year.
Puerto Rico’s power is under scrutiny. Although the final microgrid rules were published, the construction of microgrids must overcome the Promesa’s bankruptcy-like process, which could take 20 years (English). Puerto Rico’s Justice Secretary warned the Puerto Rico Electric Power Authority that the consulting contract given to Víctor Peña Vargas did not align with jurisprudence (English).
The IDB discussed Colombia’s Hidroituango project. The Inter-American Development Bank private sector arm met with civil society organizations to discuss the situation of the Hidroituango hydroelectric project in Antioquia (English). IDB Invest approved financing for the project, which will supply 17% of Colombia’s power.
Panama increased its power supply. In April, 908 million kwh were generated, a 3.3% increase (Spanish) compared to the same month of the previous year. During the first four months of 2018, 64% of the energy came from hydropower sources, 21% from thermal sources, 10% from wind, 2% from solar, and 2% from self-generation.
Old School Social
Events in the world beyond your screen—go see and be seen!
The Cuba Energy, Oil and Gas Conference will be held June 27-29 at the Meliá Cohiba in La Habana, Cuba.
Lateral Thinking
Seaweed rafts return to the Caribbean. In 2011, rafts of brown seaweed (called sargassum) reached the Caribbean beaches, trapping sea turtles, and they have returned nearly every year (English). Scientists are examining samples to determine if the broad-blade form of sargassum is a separate species.
Quote of the Week
“Nada es más importante que la tranquilidad interior.”
“Nothing is more important than interior serenity.”
-Antonio José de Sucre (1795-1830), Venezuelan politician and military.
We hope you have a productive week. Please send any news, comments, or seaweed uses to CaribbeanWeekly@energynarrative.com.
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