March 18, 2019 edition– Guatemala’s pipeline; Colombia and Shell’s oil contracts; and El Salvador’s power auction.
Last Week in a Minute or Less
Central America. Guatemala extended the period to bid on its pipeline; and El Salvador awarded 8.48MW.
Greater Antilles. Trump has Cuba in sight; Jamaica will cut taxes; and the Dominican Republic finished 2018 with 7% growth.
Lesser Antilles. The Bahamas’ largest solar project is up and running; Trinidad Petroleum got bank; and the BEWU wants Bahamians to run the new power plant.
South America’s Caribbean Coast. Shell has new contracts in Colombia; Venezuela will have to pay ConocoPhillips; and renewables in Colombia may be in trouble.
The IMF had a busy week… The International Monetary Fund said Colombia’s economic activity is speeding up in 2019 (English), and the Dominican Republic ended 2018 with 7% growth (English). The IMF said Haiti could get US$229m to help with its economic troubles (English).
…and Jamaica’s economy was checked out too. The IMF recommended a reduction in the surplus target to 6.5% to ease higher spending in social assistance (English) for Jamaica. The Finance and Public Service Minister announced a reduction of J$14.032bn in taxes to stimulate growth and economic activity (English).
Moody’s warned The Bahamas on its budget goal. The international rating agency thinks The Bahamas will probably miss its target of a small budget surplus by 2020-2021 and will experience a deficit equal to 1% of GDP (English).
Trump has Cuba in sight. The Trump administration plans to “financially strangle the Cuban regime” due to its support of Venezuelan President Maduro. The goal is to create “a completely inhospitable foreign investment environment for Cuba, to pressure it economically” (English).
Venezuela considered China’s help to restore power. China offered to help Venezuela put an end to its worst blackout (English). Power returned in many parts of the country although there were still protests in the country’s second largest city.
Oil & Gas Upstream
Shell signed two E&P contracts in Colombia. The government and Shell signed two exploration and production contracts in offshore areas (English). The contracts will require an initial investment from Shell of US$100m.
Trinidad Petroleum avoided a cash crunch. Trinidad Petroleum Holdings (TPH) (aka Petrotrin) secured new loans of US$1.4bn on oil reserves to ease a US$859m bond maturity in August (English). TPH met ratings agencies to design a plan to prioritize oil and gas exploration and production.
Russia burnt billions on Venezuelan oil projects. The Russian state-controlled oil company Rosneft has spent around US$9bn on Venezuelan projects since 2010 (English), according to documents reviewed by Reuters. The investment has yet to break even as oil output at the projects was lower than expected and they struggled to obtain basic drilling equipment.
Venezuela will have to pay ConocoPhillips billions. The World Bank Group’s International Center for Settlement of Investment Disputes ordered Venezuela to pay almost US$4.5bn to compensate for the Hamaca project’s seizure and nearly US$3.4bn to compensate for the Petrozuata project (English). The tribunal also demanded Venezuela pay more than US$562m for the Corocoro projects.
The IEA does not expect much from Venezuela after sanctions. The International Energy Agency predicts Venezuelan crude production will drop from 1.31 million barrels per day in 2018 to 750,000 barrels per day in 2019 (English). The IEA warned that OPEC’s capacity could fall by more than 1.5 million barrels per day.
Oil & Gas Downstream
Citgo and Valero try to return Venezuelan oil. Citgo Petroleum Corp and Valero Energy plan to return 2 million barrels of crude loaded (English) before sanctions that they now cannot accept. More than 6 million barrels of Venezuelan crude remain in limbo.
Guatemala extended the period to bid on its pipeline. Guatemala extended the period to bid on the pipeline due to the lack of quorum of the Bidding Board to discuss the offers to operate the Station System of Hydrocarbons Transportation (SETH) (Spanish). The bidding that was postponed was for the pipeline connecting La Libertad refinery in Petén to the Piedras Negras terminal.
Colombia’s pipeline continues to be under attack. Ecopetrol said two bomb attacks caused a fire on the Mansoya Orito pipeline and damaged the Caño Limón pipeline, spilling crude into a ravine (English). Ecopetrol recommended residents not approach the area or drink from the ravine.
The Venezuelan blackout affected oil export operations. PDVSA was unable to continue crude exports at the José port due to the blackout (English). The port resumed operations on March 13, but shipments had not yet resumed (English).
Renewables & Electricity
El Salvador awarded less than one-third of the power it was asking for. El Salvador offered 28MW on a power auction and only 8.48MW were awarded (Spanish). Most of the companies that participated went over Siget’s price limit and were disqualified from the process.
The Bahamas’ largest solar project is up and running. The Environment and Housing Ministry cut the ribbon on the 900kW solar car park (English), the largest solar project on the island. The goal is to show Bahamians the economic and environmental benefits of solar.
The BEWU expects Bahamians to work on New Providence’s new power plant. The Bahamas Electrical Workers Union’s (BEWU) president said BPL must prepare locals to run the 132MW of capacity acquired from Wärtsilä (English). BPL contracted Wärtsilä to install seven new engines to reduce energy costs and reduce blackouts.
Renewables in Colombia may face troubles. Despite the country’s high solar radiation, renewable projects require infrastructure construction and support from technological communities, which are in short supply (English). Colombia’s first solar and wind auction finished without a result after many companies could not meet the requirements.
Old School Social
Events in the world beyond your screen—go see and be seen!
The 2nd Annual Guyana International Petroleum Business Summit & Exhibition 2019 is scheduled for March 26-28 at the Guyana Marriott Hotel in Guyana.
Caribbean kids are connected to nature through birds. As part of the Bird Sleuth Caribbean program, almost 50,000 people on 22 islands have learned about birds and nature in the past five years (English). The goal is to promote the protection of the region’s birds and nature in English, Spanish, and French.
Quote of the Week
“La gente comenta que la infancia es una especie de patria. Las experiencias que se viven, los espacios de los que te apropias van creando raíces profundas.”
“People say childhood is a kind of homeland. The experiences lived, the places that you appropriate create deep roots.”
– Consuelo Tomás (1957), Panamanian poet and novelist.
We hope you have a productive week. Please send any news, comments, or bird songs to CaribbeanWeekly@energynarrative.com.
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