October 16, 2017 edition— Tullow Oil moved to 3-D surveys; T&T increased royalty taxes; and France will back St. Kitts geothermal interest.
Last Week in a Minute or Less
Central America. The World Bank trusts Costa Rica’s economy; El Salvador’s natural gas plant is delayed; and Panama’s bunker sales are up.
Greater Antilles. Tullow Oil moved to 3-D surveys; bureaucracy slows investments in the Dominican Republic; and Puerto Rico is looking for options to reconnect.
Lesser Antilles. T&T increased royalty taxes and France will propel St. Kitts’ geothermal energy.
Northern South America. Venezuela plans a swap with Rosneft and ExxonMobil finished the Turbot-1 well.
Déjà vu all over again. Last week’s readers were particularly interested in solar solutions for the Caribbean after the Hurricanes (English); AES El Salvador’s plans for ten solar farms (Spanish); and Trump’s experience in Puerto Rico (English).
Political Economy
CDB ends St. Kitts and Nevis mission. The Caribbean Development Bank (CDB) discussed the country’s development priorities from 2017 until 2021 (English). The CDB representatives met with government officials and representatives from the private sector and discussed potential support for infrastructure rehabilitation, energy and water investment, and improving project implementation.
The IMF trusts Nicaragua’s growth. The International Monetary Fund (IMF) estimates Nicaragua will grow 4.5%, faster than the 3.8% average expected for Central America (Spanish). Even so, growth between 2017 and 2022 will not exceed 5%, despite analysts warning annual growth needs to increase to 8% to avoid falling behind.
Costa Rica’s economy will grow by 3.9%. The World Bank forecast Costa Rica’s GDP will grow between 3.9% and 3.8% for 2017 and 2018 (Spanish). The percentages are slightly lower than the central bank’s forecast of between 3.8% and 4.1%.
Moody’s lowered Puerto Rico’s rating and Fitch, El Salvador’s. Moody’s downgraded Puerto Rico’s general obligation bonds to Ca from Caa3 considering the economic disruptions caused by Hurricane Maria (English). Fitch lowered the long-term sovereign rating in local currency of El Salvador to restricted default (RD) (Spanish).
Oil & Gas Upstream
Tullow Oil moved to 3-D surveys. Tullow Oil will move to three-dimensional surveying after the findings from two-dimensional seismic surveys offshore in the last 18 months (English). The survey of 3,000 kilometers of blocks off the south coast of Jamaica was part of the program signed with the Petroleum Corporation of Jamaica (PCJ) in November 2014.
ExxonMobil finished the Turbot-1 well. ExxonMobil completed the Turbot-1 well in the southeastern area of the 26,800-sq-km Stabroek block (English). The Stena Carron is now moving to the Ranger prospect. ExxonMobil estimates the Stabroek block contains 2.25-2.75 billion boe in recoverable resources.
Oil producers in the Gulf of Mexico feared Nate. Chevron announced the shutdown of two platforms ahead of tropical storm Nate’s arrival in the Caribbean and was followed by more oil and gas producers (English). The companies which shut production include Shell, Exxon, BP, and Anadarko.
T&T added a hefty royalty tax. The Trinidad and Tobago government announced a 12.5% royalty tax on crude oil production, condensate, and natural gas (English). The decision is expected to affect BP Trinidad and Tobago, operating under exploration and production contracts, but will not impact Shell, EOG, or BHP Billiton operating under production-sharing contracts.
Oil & Gas Downstream
Panama enjoyed cheaper fuel. The National Energy Ministry will maintain gasoline prices at US$0.729 per liter until October 27 (Spanish). The smallest reduction was in diesel prices, falling by US$0.005 to US$0.671 per liter.
El Salvador’s natural gas plant is delayed. The Legislative Assembly must approve a concession law designed specifically for Energía del Pacifico’s project to start building a natural gas in Acajutla port (Spanish). Energía del Pacífico obtained a concession for a 355MW natural gas plant.
Venezuela is negotiating a swap with Rosneft. Venezuela’s government said PDVSA is negotiating to swap Rosneft’s collateral in US-based refiner Citgo for oilfield stakes and a fuel supply deal to avoid complications from US sanctions (English). Rosneft holds a 49.9 percent collateral in Citgo for a US$1.5bn loan.
Panama’s bunker sales skyrocketed in August. Bunker sales in Panama in August rose 11.2% year-on-year pushing year-to-date sales above the 3 million mt mark (English). Fuel oil sales for the month amounted to 331,873 mt while distillate sales were 24,078 mt.
Renewables & Electricity
ICE demanded a 19% rise in power tariffs. Costa Rica’s Power Institute (ICE) asked for an increase of 18.82% in the general tariff for 2018 (Spanish). The request came after a fall in power sales and an increase in debt expenses. In 2016, the ICE requested a 9.75% increase.
Puerto Rico is fighting to power up. The US Army Corps of Engineers awarded the first contract to repair Puerto Rico’s power grid (English). The US solar industry sent rooftop panels and batteries to Puerto Rico as a humanitarian effort, but also to show what solar energy can offer (English).
Jamaica’s priority: energy diversification. The Finance and Public Service Minister Audley Shaw assured that increasing renewable solutions is a strategic priority to contribute to international competitiveness (English). Jamaica’s National Energy Policy of 2009-2030 addresses the need to diversify and supply energy supporting long-term economic development.
Bureaucracy hit the brakes on DR investments. Administrative procedures delay the development of major projects and eroded foreign investors’ confidence in the country (English) (Spanish). The Monte Plata Solar plant business manager is waiting for the Electricity Superintendence and the National Energy Commission to issue the definitive concession for the second phase.
Punta Catalina is damaged, but on time. The Punta Catalina administration announced a rotor was damaged, but the plant’s start day will remain the same (Spanish). The National Committee to Fight Climate Change (CNLCC) said the repairs will take eight months and cost US$3m.
France will push for St. Kitts’ geothermal plant. Prime Minister Dr. Timothy Harris and France’s ambassador to St. Kitts and Nevis, Philippe Ardanaz, met and reaffirmed their support for geothermal energy development (English). The goal is to have nearly 100 percent of the electricity supplied in the federation from renewable energy sources by 2020.
Jamaica’s offshore wind project will be a novelty in the Caribbean. The Petroleum Corporation of Jamaica (PCJ) was awarded a grant to develop an offshore windfarm in Jamaica (English). The feasibility study will evaluate the project’s viability and, if built, will be the first offshore windfarm in the greater Caribbean region.
Lateral Thinking
Hurricanes also hit the marine environment. On top of infrastructure devastation and the cost of human lives, hurricanes mix up coastal sediments, ripping animals and plants from the sea floor (English). This devastation in seagrass meadows can also impact fisheries and reduce coastal protection that humans benefit from in the Caribbean.
Quote of the Week
“No dejes apagar el entusiasmo, virtud tan valiosa como necesaria; trabaja, aspira, tiende siempre hacia la altura.”
“Don’t leave enthusiasm to die, virtue as valuable as it is necessary; work, aspire, tend always towards the height.”
– Rubén Darío (1867-1916), Nicaraguan poet that initiated the modernism movement
We hope you have a productive week. Please send any news, comments, or new marine environment protection strategies to CaribbeanWeekly@energynarrative.com.
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