Ceis petroleum update june 2013

CARIBBEAN ENERGY INFORMATION SYSTEM (CEIS) JUNE 2013 ISSUE

Man aboard oil rig. Image source: http://www.huffingtonpost.com/

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he Caribbean region has always been a major tourist destination for people from all over the world. The turquoise waters, white sandy beaches and the warmth of the region are a few of the factors that draw tourists to our shores. With the exception of Trinidad and Tobago who is naturally blessed with crude oil, the remaining Caribbean depends heavily on tourism as a major foreign exchange earner. As such protecting that which earns income is important to a nation’s economic survival.

In recent years, there has been much talk to explore the waters of the Caribbean for oil. Oil exploration has become important now more than ever as international crude prices have consistently risen and the demand for energy has increased and will expand as industrialization continues to grow. Whilst it is crucial for Caribbean countries to reduce there need to import oil, it is equally important to protect the enTo access CEIS website CARIBBEAN PETROLEUM UPDATE

vironment as the effects of global climate change have placed countries in the region in a vulnerable position. However, despite the Caribbean being blessed with alternative energy sources, it is crucial to keep the oil flowing as sectors such as electricity and transportation requires huge amounts of oil for power generacontinued on page 2/ CONTACT US

Caribbean Energy Information System Scientific Research Council Hope Gardens, Kingston 6, Jamaica 1-876-927-1779 (Telephone) 1-876-977-1840 (Fax) ceis@src-jamaica.org www.ceis-caribenergy.org

is a monthly Bulletin which highlights petroleum issues affecting or relevant to the Caribbean, international developments that may affect the region’s way of life and movements in oil prices and retail prices for fuel regionally.

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Call: 1-876-927-1779 | Caribbean Petroleum Update : June 2013

Highlights of Deep Water Oil and Gas Exploration in the Caribbean…....……..continued from page 1 tion. It would be encouraging if the efforts of oil exploration were to be successful; however are we willing to explore to the detriment of our waters? In this issue of the Caribbean Petroleum Update we seek to identify a few countries in the Caribbean that are exploring or have explored deep sea exploration for oil and gas and the outcome of their attempts.

Recently, a number of countries in the Caribbean region have opened their waters to exploration for oil and gas. With advancements and improvements in drilling technology the possibility now exists for other countries to drill and recover oil and gas from depths exceeding 4000 metres.

As such a number of international oil companies (IOCs) and state companies are showing interest in the bid rounds.

Exploration drilling was to have commenced in April 2013 by Bahamas Petroleum Corporation to depths of 22,000 feet in waters adjacent to Cuba. However, to date nothing new has been forthcoming from these activities.

BARBADOS To date only one well was drilled in the deep waters, miles off the south west coast of Barbados by Conoco Phillips in 2001. Whilst efforts at exploration came up empty, Barbados remains optimistic and in November 2012 passed two acts that will seek to paved the way for offshore licenses to be granted to Australia-based BHP Billiton. Commencement of operations is unknown.

BELIZE CITY In an effort to protect the Meso American reef, the second largest

THE BAHAMAS Following the incident in the Gulf of Mexico on April 20, 2010 where workers perished on the Deepwater Horizon drilling rig operated by BP, the previous administration declared a ban on offshore drilling. However, in March 2013, the Bahamian government decided to allow drilling in their waters only for exploratory purposes. This will first determine if the country possesses viable oil reserves, however this data is not expected to be available until 2015. Based on the outcome of these exploratory activities a referendum will then be issued.

The government however has expressed concern regarding environmental issues and protecting their tourism product.

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barrier reef in the world environmental groups in Belize such as Oceana, COLA and the Belize Coalition to Save Our Natural Heritage presented a case to the Belize Supreme Court. In response to the case the Belize Supreme Court issued a ruling in April 2013 making null and void six offshore drilling contracts granted by the Belizean government in 2004 and 2007. The court found that the contracts were given to companies that were not equipped with the technical expertise to drill safely nor the necessary machinery and equipment needed for offshore drilling.

The first onshore oil well found in Belize was in 2002 in the Spanish Lookout area in the Cayo District; however the Belize Natural Energy Oil Limited commenced successful operations in 2005 and again in 2007

One of Jacques Cousteau’s top 10 scuba sites, Belize’s Blue Hole was scheduled for oil drilling. (Photo by USGS

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Caribbean Petroleum Update : June 2013 | Call: 1-876-927-1779

at the Never Delay #1. BNE invested substantial amount of funds on exploration activities since oil discovery in 2005, however over the years other oil companies came along looking for new frontiers to explore for oil. After BNE exploration licenses expired in January 2012, the government failed to renew the license but instead awarded the exploration blocks to a Guatemalan Company. As such BNE was forced to cease exploration activities.

In March 2013, Maranco Energy Belize Limited discovered an oil deposit in the Orange Walk District. Since the projection for the production of crude oil at BNE is on the decline, it would be encouraging to the Belizean government if Orange Walk District yields commercially viable amounts of oil, this would make Maranco Energy Limited the second company operating an oil field in Belize. Testing of the Orange Walk District area has commenced and is ongoing.

CUBA Cuba’s offshore explorations efforts so far have proved futile. Analysts have said that Cuba’s most promising areas appear to be towards the Gulf of Mexico and Southwest coast of Florida, and the foreland basin from the Yucatan Straits to the Western Florida Straits.

Additionally, recent developments have shown that a Russian state oil firm that was drilling in the northern areas of Cuba has ceased operation temporarily due to geological problems but will resume exploration in the year 2014. Another factor that may have contributed to this withdrawal was that the drilling platform that the Russian company was using

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was leased from a Norwegian company who decided to leave Cuban waters.

GUYANA In May 2013,a licence was issued to Repsol to continue oil exploration in Guyana’s exclusive economic zone.

This licence was original issued in November of 2012, however this new updated licence will last for up to four years. In the past, Guyana had a number of offshore licenses to companies such as Pacific Rubiales (Canada), CGX Energy, Tullow, Shell, Repsol, Exxon Mobile and Anadarko. However, exploration efforts have been unfruitful.

JAMAICA Jamaica formally offered 19 offshore and four onshore blocks for licensing for oil and gas exploration, at the launch of the Second Round bid in 2010-2011, however, no acceptable bids were received.

In September 2010 Canadian firm Sagres Energy, the parent of Canadian firm Rainville Energy, had the rights to explore three blocks offshore Jamaica for oil, as they identified "seismic bump" that could have oil.

Sagres however did not commit to the next phase of exploration as a partner was being sought. The timeframe indicated by the PCJ to verify their licence was March 2011. During this period the firm was seeking a partner to either drill or provide the capital for operating.

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as a consequence of the company’s failure to meet its financial obligations and, after granting pervious extensions. Under the agreement, which dates back to 2006, the necessary funding should have been secured for the second phase of the programme which began in May 2012 and for the commencement of drilling by November 2013.

TRINIDAD & TOBAGO Trinidad and Tobago has 39 deepwater blocs (12,000 feet or more). In 2006, BPTT sank the Ibis Deep well to 19,068 feet subsea in the South East Coast tapping the crustaceous horizon. EOG Resources sank its own deep well, Pelican Deep, to around 17,000 feet, in the same block in 2010. Neither found the productive zones for which they were looking. In 2012 T&T bid rounds were successful and majority of the blocs were taken

by BHP Billiton. A new deep water bid round began in April 2013.

CONCLUSION With oil prices rising and the demand for oil surging, it would be encouraging to believe that with the explorations taking place there is a possibility the region could one day become a net exporter of oil and gas. Noone is of the expectation that the Caribbean will become oil rich like Venezuela, but it is something worth envisioning. However, while this is encouraging there are also important issues relating to the environment that must also be explored, as the environment directly affects the tourism product of many of

An extension was granted to Sagres Energy up to April 2012 to seek a drilling partner in its quest for oil off the shores of Jamaica. However, their exploration licence was later revoked

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Call: 1-876-927-1779 | Caribbean Petroleum Update : June 2013

PETROLEUM NEWS & HAPPENINGS Plans for Petrojam’s expansion to be announced this weekend. [...]...Read more New diesel fuel now at pumps. [...]...Read more Gov’t to Schedule Expansion of Petrojam Refinery. [...]...Read more Ultra Low Sulphur Diesel hits the market today. [...]...Read more

Diesel smuggling racket uncovered in Trinidad.

Cuban First Vice President Attends Petrocaribe Summit [...]....read more Petrocaribe: Central America and the Caribbean’s Energy Dilemma [...]...Read more New World Oil and Gas expands working stake in Blue Creek [...]...Read more St Lucia seeking to take advantage of PetroCaribe [...]...Read more Paulwell’s Petrojam plan – Upgrade to be done by 2016 [...]...Read more Petrojam gasolene prices ... [...]….Read more Fears over Venezuelan oil aid sparks interest in Caribbean region’s energy [...]...Read more Jamaica to raise Petrojam upgrade at PetroCaribe summit. [...]...Read more 360 mw energy project delay irks PSOJ. [...].

Read more

[...]...Read more

Paulwell mulls increasing ethanol fuel mix. [...]...Read more

Paulwell launches new diesel fuel tomorrow. [...]...Read more

Diesel Day [...]...Read more Nigeria, Qatar, T&T lead LNG export diversification. [...]...Read more Energy Minister Hints at Increasing Ethanol in Fuel. [...]...Read more RUBiS goes the ULSD way. [...]...Read more Oil prices climb above $98 before US Fed meeting. [...]...Read more Colour Change for Petrojam Diesel Takes Effect Today [...]...Read more Germany’s RWE buys 40% stake in Suriname oil block partly owned by Petronas [...]...Read more continued on page 7/

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Caribbean Petroleum Update : June 2013 | Call: 1-876-927-1779

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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP JUNE 2013 Retail prices for Regular Unleaded Gasoline in the twelve Caribbean countries reviewed at the end of June 2013 showed marginal increases in prices for Belize, BVI, St.Kitts and Nevis with St.Kitts and Nevis experiencing the highest increase of 6.59 % from May to June 2013. Prices in Antigua and Barbuda, Bahamas, Dominica, Monsterrat, St.Vincent and the Grenadines and Trinidad and Tobago remained stable while minimal decreases in prices from May to June were seen in three countries; Grenada, Jamaica, St.Lucia between 0.6% and 3%.

Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2013 6 Mths AVG

COUNTRIES

JAN FEB MAR APR MAY JUN

ANTIGUA/ BARBUDA

1.23 1.23 1.23

1.23 1.23

1.23

1.23

BAHAMAS [91 OCT]

1.37 1.41 1.52

1.50 1.43

1.43

1.44

BELIZE [87 OCT]

1.33 1.33 1.54

1.54 1.53

1.54

1.47

B.V.I [87 OCT]

1.21 1.21 1.30

1.25 1.23

1.29

1.25

DOMINICA

1.18 1.20 1.28

1.28 1.28

1.28

1.25

GRENADA (95 OCT)

1.29 1.29 1.35

1.35 1.33

1.31

1.32

JAMAICA 87 Octane[E10]

1.25 1.28 1.26

1.23 1.10 1.097

1.20

MONTSERRAT

1.38 1.47 1.23

1.30 1.29

1.29

1.33

ST. KITTS/ NEVIS

1.35 1.33 1.35

1.22 1.17

1.24

1.28

ST. LUCIA

1.26 1.26 1.28

1.30 1.32

1.28

1.28

ST. VINCENT/ GRENADINES

1.22 1.22 1.15

1.15 1.17

1.17

1.18

TRINIDAD/ TOBAGO [92 OCT]

0.42 0.42 0.42

0.42 0.42

0.42

0.42

NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.

See prices for all products at www.cippet.org

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Call: 1-876-927-1779 | Caribbean Petroleum Update : June 2013

Comparative Retail Pump Prices Regular Unleaded Gasoline JUNE Avg vs 6 Mths Avg (Jan - June 2013)

1.80

US$/Litre

1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00

12 Caribbean Countries

Image source: http://todaymalaysia.wordpress.com/

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JUNE NEWS continued from page 4/ Belize Petroleum Association Wants Standardized Industry [...]...Read more Geological problems cause suspension of Cuban oil exploration [...]...Read more T&T Ministry probe: 30 boats, 3 gas stations named in fuel racket [...]...Read more Brent Crude Oil Rises Back to Level Before OPEC Meeting [...]...Read more Shale oil revolution touches Japan [...]...Read more

Image source: www.thepriceoffuel.com and www.green.autoblog.com

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Call: 1-876-927-1779 | Caribbean Petroleum Update : June 2013

Average Weekly & Monthly Crude Oil Prices (Jan June 2013)

98

US$/BBL US$/BBL

96

96.65

95.07 95.84

94 92 90 88 86 84

Apr-13

May-13

Jun-13

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WK1

Analysis of the International Crude Oil prices over the three months period April - June 2013 saw prices in June averaging, US $95.77/BBL. When compared to the average prices seen in April and May this average price was approximately 4.3% and 1.2% higher respectively. The highest weekly price seen in June for the product was US$96.65/ BBL - reflected in week three while the lowest price recorded was US$94.25 seen in week one. An average of the three month’s average prices reflected US$94.10/BBL.

WK2

WK3 Period

WK4

MTH AVG

Average Monthly World Crude Oil Prices (2010 - 2012)

US$/BBL

109.61

106.0

110 100

88.14

90 80

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Caribbean Energy Information System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries.

Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.

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2010 Jan

Feb Mar Apr May Jun

Jul

2011

2012

Aug Sep Oct Nov Dec

Period

Yr Avg

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