The Weekly Brief: Greater Caribbean

October 23, 2017 edition— Grenada awaits gas discovery confirmation; no oil refinery for Guyana; Puerto Rico’s power will be running by December.




Last Week in a Minute or Less


Central America. El Salvador opened an auction for fuel supply and Nicaragua will enjoy cheaper diesel.


Greater Antilles. The Dominican Republic is all ears on extraction rules; Puerto Rico will be powered up by December; and EGE Haina placed corporate bonds on renewable projects.


Lesser Antilles. Grenada expects results on its natural gas discovery and Trinidad & Tobago suffered an oil spill.


Northern South America. Guyana decided against an oil refinery; a Colombian oil deal is rumored; and Venezuela’s elections may bring further sanctions.



Political Economy


The Greater Caribbean looks abroad for trade. Panamá strengthened its trade with Great Britain, a major source of direct foreign investment (Spanish). Cuba and Norway confirmed “a positive development” in their bilateral relations promoting trade and economic relations between both countries (Spanish).


The WB and IMF discuss disaster recovery with Caribbean finance ministers. Caribbean finance ministers met with the International Monetary Fund (IMF) and the World Bank (WB), issuing a communiqué on climate change action (English). The goal is to ensure post-disaster responses are designed to specific country needs to mitigate the impact of future disasters.


Venezuela’s elections threaten more foreign sanctions. Venezuela’s ruling socialists’ win in gubernatorial elections has increased the risk of further foreign sanctions (English). The victory came despite food shortages, inflation, and a collapsing currency. The opposition Democratic Unity coalition demanded a recount after reports of abuses, including multiple voting and forced attendance at gunpoint.


The IMF forecasts 2.4% growth in the Caribbean… The International Monetary Fund announced that growth in tourism dependent economies is projected to be 2.4%, up from 2.1% in 2016 (English). The IMF advised the Bahamas to save US$200 million per year by cutting the public sector wage bill, reducing subsidies to state owned enterprises, and reforming its pension system (English).


…and the World Bank also trusts the region’s growth. Despite recent disasters, the World Bank believes the Latin American and Caribbean regions are on course to record modest economic growth, a first in six years (English). The Antigua and Barbuda government plans to renegotiate a US$40m loan with the World Bank (English).



Oil & Gas Upstream


The Dominican Republic is all ears on extraction rules. The Energy and Mines Ministry received opinions and proposals to consolidate a new regulatory framework for the extractive industry (Spanish). The goal is to create rules to provide transparency and security to any bidding process.


Grenada expects results on its natural gas discovery. The Grenada government confirmed the discovery of natural gas offshore, but awaited test results to determine the gas quality and its possible benefit for the island (English). Grenada issued an exploration license to Global Petroleum Group.


All eyes set on Colombia’s oil. Tony Hayward and Carlyle plan a major Colombian oil purchase (English). Packers Plus Energy Services partnered with Gran Tierra Energy to optimize well performance, stimulating the targeted reservoir through a horizontal wellbore (English)



Oil & Gas Downstream


No oil refinery for Guyana. After a feasibility study, the Guyana government decided not to build a US$5bn oil refinery, but would stop the private sector from doing so (English). The Minister of Natural Resources could not afford to invest that much on such a facility.


Nicaragua will enjoy cheaper diesel. While premium gasoline and diesel prices will drop by 0.30 and 0.89 cordobas per gallon, respectively, regular gasoline will increase by 0.16 cordobas per gallon (Spanish). Oil prices fell in New York after the US domestic crude reserves increased more than expected.


El Salvador launches tender for fuel supply. The Autonomous Executive Port Commission set a November 10 deadlines for bids to supply gasoline and diesel for 2018 (Spanish). The fuel supply could be arranged through coupons and in bulk to the CEPA company’s facilities.


An oil spill in T&T’s Chaguaramas raised alarms. Environmental groups in Trinidad and Tobago worried over a massive oil spill in Chaguaramas. The Environmental Management Authority (EMA) notified the Office of Disaster Preparedness and Management and the Ministry of Energy and Energy Industries and a team investigated the incident (English).



Renewables & Electricity


The DR reduced funding for electricity subsidies. The Dominican Republic’s 2018 Budget will allocate only RD$23bn (US$479.2m) to cover the electricity subsidy, one third less than the RD$31.5bn spent in 2017 (English) (Spanish). The figure would be 0.6% of GDP in 2018, down from the 1% of GDP allocated for this year.


Puerto Rico will be powered up by December. Puerto Rico’s governor expects 95% of AEE clients to recover service by December (Spanish). The Puerto Rico Energy Commission is developing rules to install and implement microgrids to restore the systems affected by Hurricane María (English).


Debates over the DR electricity pact were closed. The Energy and Mines Ministry announced that debates to define the Electricity Pact closed with 95% of the proposals agreed upon (Spanish). After a final review, the document will be sent to President Danilo Medina for final approval.


EGE Haina placed green corporate bonds. The Power Company Haina placed RD$4.6bn corporate bonds to continue the development of the Dominican Republic’s power sector (Spanish).  The EGE Haina general manager emphasized the bond’s importance in showing investors’ trust in sustainable projects.


Solar microgrids may not be the answer for the Caribbean’s troubles. Some power system experts believe the need to restore power calls for reliable centralized grids and fossil fuels in the Caribbean (English). Several firms are equipping rooftop solar systems with battery storage enabling consumers to operate independently of grids.



Lateral Thinking


Scientists will be part of the first disaster response. The Zooniverse, the University of Oxford, and NGO Rescue Global enlisted thousands of volunteers worldwide to analyze satellite-based information in disaster areas (English). This allowed them to create a series of maps highlighting affected areas, a robust source of information for aid deliveries on the ground.



Quote of the Week


“Un pueblo ignorante es un instrumento ciego de su propia destrucción.”


“An ignorant nation is a blind instrument of its own destruction.”



– Simón Bolivar (1783-1830), Venezuelan military and political leader, colloquially known as El Libertador.



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