The Weekly Brief: Greater Caribbean


May 21, 2018 edition–Antigua and Barbuda’s solar; Guatemala’s pipeline; and the DR oil round.




Last Week in a Minute or Less


Central America. Guatemala okayed a pipeline; Panamá will have a new wind park; and El Salvador could multiply its geothermal capacity.


Greater Antilles. Jamaica will regulate fuel quality; Cuba wants to attract foreign investors; and the Dominican Republic needs experts to prepare its oil round.


Lesser Antilles. ConocoPhillips seized Isla refinery’s products; GreenTech Solar will power up Antigua and Barbuda; and natural gas could be Bermuda’s future.


South America’s Caribbean Coast. The Lima group urged Venezuela to suspend the election; and Maduro bought foreign oil to help Cuba.


Déjà vu all over again. Last week’s readers were particularly interested in the IMF’s view of Guyana’s economy (English); past taxes due to Jamaica’s oil hedges (English); and Puerto Rico’s utility (English).



Political Economy


Growth in the Caribbean is picking up… Thanks to domestic demand and a favorable global environment, growth in Latin America and the Caribbean is picking up, according to the IMF. To sustain the growth, the region must invest in infrastructure and education to boost productivity (English) in the long run.


…and the IMF had a busy week in the Bahamas and El Salvador. The International Monetary Fund (IMF) estimated a 1.3% expansion in the Bahamas GDP in 2017, but fiscal deficits remain a challenge (English). El Salvador grew above potential at 2.3%, but potential growth continues to be below the level desired while the debt level remains high (English).


Cuba wants to attract investors. Miguel Díaz-Canel is intensifying efforts to attract foreign investments, trying to balance the help it needs to solve the economic crisis without weakening the government’s control (Spanish). Negotiations between politicians, diplomats, and foreign businessmen from the infrastructure, agriculture, tourism, and energy sectors are expected.


Latin American leaders urged Venezuela to suspend the election. The Lima Group urged the Maduro government to suspend the presidential election, describing the process as “illegitimate and lacking in credibility” (English). The countries condemned Venezuela’s government and will consider “actions” if the vote goes ahead.



Oil & Gas Upstream


Conoco was authorized to seize PDVSA assets… A Curacao court allowed ConocoPhillips to seize US$636m in assets belonging to PDVSA due to the 2007 nationalization (English). The legal action was the latest to enforce a US$2bn arbitration award by the International Chamber of Commerce (ICC) over the nationalization.


…and Conoco seized Isla refinery’s products. ConocoPhillips seized products belonging to PDVSA from the Isla refinery it runs on Curacao (English). Curacao was planning to meet with PDVSA and Conoco to discuss the dispute and to ensure the fuel supply for the island.


The Dominican Republic needs help to prepare its oil round. The Energy and Mines Ministry offered a tender to evaluate, plan, promote, and execute the oil round (Spanish) to award exploration and exploitation concessions. The goal is to reduce the country’s dependence on oil imports.



Oil & Gas Downstream


Jamaica will regulate fuel quality. The Science, Energy and Technology Minister, Andrew Wheatley, plans to implement more regulations to ensure compliance and to investigate reports of contaminated fuel and faulty gas in the market (English). Regulations started in 2017 with the Ministerial Order that tests and certifies all petroleum products entering the island.


AES and Barrick agreed on a natural gas supply agreement. The companies AES Andrés and Barrick Pueblo Viejo signed a 10-year natural gas supply agreement. The supply will lower the operating costs of the 215 MW Quisqueya I power plant (English).


Guatemala okayed an oil pipeline. The Attorney General approved the process to bid the operation of the pipeline now operated by Perenco Guatemala. The 425km-long pipeline will go from Petén to the terminal at Santo Tomás de Castilla (Spanish).


Maduro bought foreign oil to help Cuba. The PDVSA bought US$440m worth of foreign crude and shipped it to Cuba, the first documented shipments of foreign crude to supply regional allies (English). The deliveries were done despite Venezuela’s need for foreign currency to maintain its economy and import food.



Renewables & Electricity


GreenTech Solar will power up Antigua and Barbuda. GreenTech Solar, a Cayman Islands solar company, won a contract to provide 10MW of renewable power to Antigua and Barbuda’s government buildings, hospitals, schools, and car parks (English). The deal represents 10% of the island’s energy needs.


El Salvador could multiply its geothermal capacity. El Salvador could produce 440MW through geothermal energy (English) on top of the 204MW already obtained, according to the Inter-American Development Bank. Although the country is considered the leader in Latin America in installed capacity, geothermal experts in El Salvador are needed.


The Dominican Republic backed solar and wind projects. The Monte Plata solar plant will expand capacity from 30MW to 69MW (English) thanks to a 20-year PPA with nation utility CDEEE. The Dominican subsidiary of Inkia Energy, IC Power DR Operations, achieved a 4.5-year, US$73.5m loan from Citibank.


Panamá will have a new wind park. Audax Renovables started the construction of the Toabré wind park’s first phase of 66MW (Spanish), with a total investment of more than US$150m. The construction could take 22 months, including the 66MW wind park, two substations, and a 27km transmission line with an average production of 240GWh per year.


Natural gas could be Bermuda’s future. The Integrated Resource Plan Proposal suggests the natural gas scenario could be the most expensive in the first two decades, but afterwards, it could be the lowest-cost power option (English). The study does not explain how the scenario would affect customer rates.


AES Panamá plant will open September 1. The 381MW plant that started construction in May 2016 will have three generators, three gas turbines, and one steam turbine (Spanish). The plant will start operating by September 1 and the ribbon will be cut by August 9.



Lateral Thinking


Insurance companies look into the bottom of the ocean. Coral reefs and mangroves could soon have insurance policies, with the sector looking for new ways to protect those affected by ocean changes and climate change. These “green infrastructures” can act as natural barriers (English) against storms and reduce losses on land.



Quote of the Week


“The greater the talent you have, the less you think of yourself.”



-Brian Burland (1931-2010), Bermudian writer and poet.



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