The Weekly Brief: Greater Caribbean


May 27, 2019 edition– Colombia’s LNG imports; Tullow Oil’s drilling; and the T&T oil round.



Last Week in a Minute or Less.


Central America. Panamá’s power generation is up by 3.9%; and Fitch got bad news about Nicaragua’s growth.


Greater Antilles. Tullow Oil plans to drill for Jamaican oil in 2020; the IEEFA wants more info on Prepa’s privatization; and Cuba received the IAEA.


Lesser Antilles. BPTT and Shell partnered up to bid in Trinidad and Tobago; Belco cut the ribbon on its new Battery Energy Storage System; and the CDB backed St Vincent and the Grenadines’ geothermal plant.


South America’s Caribbean Coast. PDVSA offered crude on sale; Colombia may speed up LNG imports; and Tullow Oil and partners will be exempt from Guyana’s taxes.


Déjà vu all over again. Last week’s readers were particularly interested in the Orinoco Belt crude production (English).



Political Economy


Fitch gave bad news about Nicaragua’s growth. The international rating agency forecast that Nicaragua will not grow until 2020 (Spanish). Fitch expects Nicaragua’s GDP to contract by 2%.


The EU removed Aruba, Barbados, and Bermuda from its blacklist. The three nations were removed from the blacklist of tax havens: Barbados and Bermuda have been moved to a grey list of jurisdictions and Aruba has been completely cleared (English).


The IMF visited Colombia, Panamá, and Barbados. The International Monetary Fund (IMF) congratulated Barbados on meeting all of its targets (English). The IMF praised Colombia’s (English) and Panamá’s economic achievements and recommended they continue with fiscal discipline (English).


Cuba received the IAEA. Miguel Díaz-Canel received the general director of the International Atomic Energy Agency and discussed the state of relations between the international agency and the island (Spanish). They also discussed the execution of cooperation projects and possible strategies to strengthen them.


The Dominican Republic’s direct foreign investment jumped. Direct foreign investment increased by 28.2% in the first quarter of 2019 (English) compared to the same period in 2018. Investments reached US$803.7m, mainly directed to the communications, tourism, and real estate sectors.



Oil & Gas Upstream


Tullow Oil plans to drill for Jamaican oil in 2020. Tullow Oil wants to drill for oil in Jamaica after finishing a 3D seismic survey (English). Preliminary findings suggest there is a one-in-five chance of finding oil.


Tullow Oil and partners will be exempt from Guyana’s taxes. Guyana’s National Assembly approved a tax concession for Tullow Oil and its partners (English). Tullow will drill two wildcat wells on its Orinduik license after June 2019 with the Stena Fort drillship.


BPTT and Shell partnered up to bid in Trinidad and Tobago. BP Trinidad and Tobago and Shell submitted a joint bid for the 2018 Shallow Water Competitive Bid Licensing Round. The round that includes six offshore shallow water blocks was opened for six months (English).


Trinidad and Tobago must work on its petroleum tax. The Finance Ministry should follow through on the commitment to review the Supplemental Petroleum Tax’s structure (SPT) to become attractive (English). The SPT goes in at its full amount when prices average above US$50 per barrel of oil in a quarter.


US oil production is filling Iran and Venezuela’s shoes. The IEA said the OPEC states produced about 440,000 barrels per day less than the agreed amount (English) in April. US production of oil and condensates was expected to rise by 1.7m barrels per day in 2019.



Oil & Gas Downstream


GB Energy trained staff on LPG. GB Energy St Maarten offered a Liquid Petroleum Gas (LPG) training session for its employees, distributors, and personnel from its office and representatives of United Petroleum Company from the Dominican Republic. The goal was to offer training on LPG’s safe handling, including transportation and storage (English).


The Venezuelan crisis may leave Haiti in the dark. Due to the crisis, Venezuela has stopped sending oil to Central America and the Caribbean, including Haiti, and the Bureau of Monetization of Development Aid Programs warned it could run out of funds and stop fuel delivery to power stations. Haiti has power for just three hours a day (English).


PDVSA offered crude on sale. The Venezuelan state-owned PDVSA offered 6.4m barrels of discounted crude oil to Russian, Chinese, and Indian companies (English). Crudes are being priced at Dated Brent discounts between US$15 per barrel and US$17 per barrel.


Colombia may speed up LNG imports. Due to a decline in natural gas reserves and an increase in domestic demand, Colombia would have to increase LNG imports between 2021 and 2023 (English). Colombia’s gas reserves fell 2.9% to 3.782 Tcf in 2018.



Renewables & Electricity


The CDB backed St Vincent and the Grenadines’ geothermal plant. The CDB secured US$27m in financing for the project (English) thanks to the contributions of the Inter-American Development Bank, the UK Department for International Development, the EU’s Caribbean Investment Facility, and New Zealand’s government.


The Dominican Republic’s industry complained about power tariffs. The Santiago Business and Industries Association pointed to high power costs and the lack of infrastructure as the main problems to boosting development (Spanish). The Dominican power industry met financial institutions to discuss ideas on development opportunities for the country (Spanish).


Trinidad and Tobago needs to work on power workers’ performance appraisals. The Public Service Association offered a 2½-week deadline to the Phoenix Park Gas Processors Limited (PPGPL) and the T&T National Gas Company Ltd (TTNGL) to resolve issues with workers’ performance appraisals (English).


The IEEFA wants more info on Prepa’s privatization. The nonprofit Institute for Energy Economics and Financial Analysis (IEEFA) filed a mandamus action to learn more about the Puerto Rico Electric Power Authority’s system and its privatization process (English). The information may include cost benefit studies to justify the concession.


Belco cut the ribbon on its new Battery Energy Storage System. Belco launched its new Battery Energy Storage System, which will provide reserve capacity and will go into operation within 50 milliseconds of a problem with the power supply. The goal is to cut fuel and maintenance costs by BMD$2m a year (English).


Panamá’s power generation is up by 3.9%. In the first quarter of 2019, Panamá has produced 2.719m kWh, a 3.9% increase compared to the 2.618m offered in the same period in 2018. While renewable power generation has dropped by 38.3%, power generation by thermal sources has increased 161% (Spanish).



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


Water temperature determines the amount of Bermuda’s lionfish. Surveys in Bermuda have shown that the density of invasive lionfish on reefs is affected by water temperature and the abundance of prey organisms (English). The divers investigated 11 sites at a depth of 60 meters.



Quote of the Week


“La diferencia entre el sistema comunista y el capitalista es que, aunque los dos nos dan una patada en el culo, en el comunista te la dan y tienes que aplaudir, y en el capitalista te la dan y uno puede gritar.”


“The difference between the communist and the capitalist system is that, although the two kick you in the ass, in the communist system they kick you and you have to applaud, and in the capitalist system they kick you and you can scream.”


– Reinaldo Arenas (1943-1990), Cuban poet and writer.



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