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May 13, 2019 edition– Exxon’s massive project; Dominica’s geothermal; and Colombia’s fuel price reform.
Last Week in a Minute or Less.
Central America. Inde’s gas purchase is under scrutiny; the IMF has high hopes for Guatemala; and El Salvador is struggling with higher fuel prices.
Greater Antilles. Puerto Rico will get rid of coal; and Jamaica boosts affordable renewables.
Lesser Antilles. The WB will fund a geothermal project in Dominica; Heritage Petroleum will contract out services; and St Vincent & the Grenadines cut the ribbon on its geothermal project.
South America’s Caribbean Coast. Exxon greenlights Guyana’s massive project; Colombia will undergo the dreaded fuel price reform; and Guyana’s elections may affect oil investments.
Déjà vu all over again. Last week’s readers were particularly interested in Paria’s fuel imports and exports (English); Montserrat’s solar project (English); and the Dominican Republic’s tax break on renewables (English).
Political Economy
The IMF has high hopes for Guatemala. The International Monetary Fund (IMF) expects Guatemala’s economy to grow 3.4% in 2019 thanks to a positive fiscal impulse and exports recovery (English). The main risks for Guatemala are a slowdown in the US and trading partners’ growth, as well as slow implementation of anti-corruption efforts.
The Bahamas’ Central Bank expects lower growth. The Central Bank’s governor said The Bahamas’ medium-term growth projections will be reduced from 2.1% to 1.5% (English). The government reduced its national debt by US$26.4m during the third quarter of the 2018-2019 fiscal year (English).
Nicaragua’s exports sank in the first quarter. By the end of the first quarter of 2019, the volume and value of Nicaragua’s exports dropped by 12.7% compared to the same period in 2018 (Spanish). Exports reached 952,877 tons, while the previous year totaled 1.09 million tons.
Maduro’s regime goes after lawmakers. Venezuelan lawmakers sought refuge in embassies as Maduro’s regime increased its efforts to isolate Guaidó and his closest allies (English). The decision was taken one day after authorities arrested Edgar Zambrano, the opposition-run National Assembly’s vice president.
Oil & Gas Upstream
Exxon greenlights Guyana’s massive project. With Liza Phase 2 given the go-ahead, Exxon and its partners will develop 15 oil production wells, 9 water injection wells, and 6 gas injection wells. The offshore project is expected to produce 750,000 barrels per day by 2025 (English).
Heritage Petroleum will contract out services. As the spillover from Petrotrin’s closure continues, its successors are seeking ways to recover production. Heritage CEO Mikey Wylie outlined the new strategy, which focuses on partnerships to bring in much needed skills and expertise, (English) along with experienced partners for large projects.
Frontera had a good quarter in Colombia. Frontera benefited from a 4% increase in oil production in Colombia compared to the fourth quarter of 2018 (English). The reasons are the completion of the water handling expansion project at the Quifa block and the increase in light oil production from Candelilla-7.
Guyana’s elections may affect oil investments. The Caribbean Court of Justice (CCJ) started adjudicating a no-confidence vote against the government. A government of the opposition PPP would not affect the terms for ExxonMobil’s contracts, but could mean a renegotiation of the agreement with other companies (English).
Oil & Gas Downstream
Colombia will undergo the dreaded fuel price reform. The Colombian government approved a 19 percent value-added tax (VAT) on gasoline and a reduction in diesel to 5 percent to align with international price fluctuations (English). The tax rate will not be passed to consumers, but assumed by Ecopetrol.
Inde’s gas purchase is under scrutiny. The National Power Institute (Inde) will purchase natural gas from City Petén for 15 years (Spanish). The request to purchase natural gas was included in the request to locate future needs.
El Salvador is struggling with higher fuel prices. Due to the conflicting relationship between the US and Iran, fuel prices in El Salvador increased between 0.54% and 1.59% (Spanish). The drop of 11.9 million barrels in crude production and of 4.4 million barrels in refined products have pushed prices up.
Renewables & Electricity
The WB will fund a geothermal project in Dominica. The World Bank will provide US$27 million in funding to help diversify Dominica’s energy sector (English), making it greener and more resilient. The country is highly dependent on diesel to generate electricity, and hurricanes can regularly disrupt the power network.
Puerto Rico will get rid of coal. The island’s government passed an ambitious energy public policy act, aiming to be fully powered by renewable energy by 2050. It aims to shut down its coal power plants as early as next year, and a PACE Program is also a possibility (English).
St Vincent & the Grenadines cut the ribbon on its geothermal project. The drilling activities for the geothermal power project at la Soufriere began on May 6th (English). The project is being developed by Reykjavik Geothermal, with Iceland Drilling Company as the drilling contractor.
Jamaica boosts affordable renewables. The UNDP pilot Energy Performance Contracting (EPC) mechanism will be applied in Jamaica to stimulate the installation of renewable energy and energy efficient technologies in the public sector (English). The goals are to develop a financing mechanism eliminating upfront costs.
The Bahamas’ Freeport energy regulation battle continues. The Utilities Regulation and Competition Authority informed the Grand Bahama Power Company that Parliament was “constitutionally entitled” to override Freeport’s founding treaty (English). The regulator is questioning GB Power’s position in refusing to submit to its supervision, undermining the Electricity Act.
Old School Social
Events in the world beyond your screen—go see and be seen!
The 62º Congreso Internacional de Agua Saneamiento, Ambiente y Energías Renovables is scheduled for May 29-31 at the Centro de Convenciones Hotel las Américas in Cartagena, Colombia.
Lateral Thinking
Cruises plan to go green. Cruise companies are looking to reduce their environmental impact with several initiatives, including a cut in plastic water bottles and alternative fuels such as LNG to power up ships (English).
Quote of the Week
“La misión de un dirigente es ser imprescindible por el menor tiempo posible.”
“The goal of a leader is to be indispensable for the shortest time possible.”
– Omar Torrijos (1929-1981), Commander of the Panamanian National Guard and dictator of Panamá from 1968 to 1981.
We hope you have a productive week. Please send any news, comments, or green solutions while traveling to CaribbeanWeekly@energynarrative.com.
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