CEIS Petroleum Update November 2012 by Caribbean Energy Information System

CARIBBEAN ENERGY INFORMATION SYSTEM (CEIS) NOVEMBER 2012 ISSUE Cuba

A look at History, Capacity, Output and Plans

any of the countries in the Caribbean rely heavily on imports of Crude oil and derived products to satisfy their fuel needs for electricity, transportation and other major areas of their economies. The region has imported refined products for most of the last century from countries such as Venezuela, Mexico and the United States. Resulting from cheaper production of refined products in Asian countries, the Caribbean became a central transhipment region and a hub for the storage and sale of crude oil refined products. As a result, a few countries in the region saw the need to build oil refineries mainly for the processing of Crude Oil to satisfy their own consumption of refined products or for sale of refined products to other countries. In this issue of the CEIS Petroleum Update, we will take a look at

the history, the capacity, output and future plans for Caribbean refineries in CEIS member countries. Most of the refineries in the Caribbean are at least 30 years old and were designed to refine sweet crude imported from the United States. However, with deep-drilling, more and more crude available from Venezuela and Mexico is sour and heavy, which the old refineries are not capable of processing.

Cuba, the most populated country in the region owns two major refineriesThe Nico Lopez Refinery, and the Hermanos Diaz Refinery both of which are currently stated owned by Cupet. The Ñico Lopez refinery in Havana harbour was formerly owned by Esso and Shell; and the Hermanos Diaz Refinery in Santiago de Cuba was formerly owned by Texaco. These companies became state owned as they were seized by Cuban Primer Fidel Castro as they refused to refine token shipments of stated owned „Russian‟ crude oil. Over the years, these refineries have undergone several processing upgrades which include: middle distillates and reformer feed hydrotreating, sulphur recovery, and naphtha stabilization. The island‟s refinery system has a capacity of approximately 222,000 b/d. However, recent refinery production has only been running up to around 75-100,000 b/d. Even though most Cuban crude oil production is directly earmarked as electric power plant fuel, about 20 percent (blended with Venezuelan

Regional Production capacity continued on page 2/

This expansion is estimated to cost about $24 billion and will bring the total refining capacity of the region to 580,000b/d. (See Table 1 overleaf.)

CARIBBEAN PETROLEUM UPDATE

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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 : November 2012

Caribbean Oil Refineries - A look at History, Capacity, Output and Plans……………………….................................................... continued from page 1 Plans

Table 1: Refinery Production for the 6 Producing Countries

There are plans for an $860 million overhaul of the plant that will boost gasoline refining capacity in Cuba from the current 22,000 b/d to 50,000 b/d for gasoline production. So far, more than 20 old holding tanks have been replaced, some of them with modern dome-shaped structures.

Barbados Mobil Oil Refinery

crude) has sporadically gone into refinery processing.

day with the ability to increase its crude processing capacity by about 10,000 barrels per day.

Cienfuegos Refinery (Cupet) The Hermanos Diaz Refinery The Cienfuegos Refinery (Cupet), a shareholder of Cubapetroleo (Cupet), has been in operation since 1991 and owns majority share of 51% and Petróleos de Venezuela (PDVSA). The 76,000 barrel-a-day (b/d) Cienfuegos Refinery was built in the years of Soviet influence, but just before becoming operational the Soviet Union collapsed. This attracted a MOU between Venezuela and CubaVenezuela's state oil firm PDVSA and its Cuban counterpart CUPET signed a 2006 a joint venture agreement to reactivate the Refinery.. PDVSA is expected to supply the refinery with Crude oil and other products “needed for its optimum performance.” In addition, products manufactured at Cienfuegos could be sold within Cuba and abroad. It has an average output of 76,000 barrels per

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Currently, the Hermanos Diaz Refinery has an installed capacity of 102,500 barrels per day, while the Nico Lopez Refinery has an installed capacity 122,000 barrels per day. Cienfuegos Refinery.

Cienfuegos Refinery Image source: www.thecubaneconomy.com

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Barbados Oil Refinery, Mobil Oil Refinery, was the sole oil refinery company in the country. It discontinued operations to make way for tourist developments in the prime beachfront property, one mile south of Bridgetown, the capital.. The closure came two years before the company's 35year contract in Barbados expired. When in operation, the Company had the capacity to produce Natural Gas and Crude oil and had the capacity to produce ,000 barrels per calendar day.

An aerial view of the sprawling Mobil complex, at Needhams Point before the refinery ceased to exist. (FP) Image source: www.nationnews.com

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(CEIS)

Caribbean Petroleum Update : November 2012 | Call: 1-876-927-1779

Dominican Republic Dominican Petroleum Refinery (Refidomsa) is located close to the Haina Occidental port in the Dominican Republic. Commissioned in early 1973, the refinery imports 30 million barrels of crude and related products each year. The refinery was formed as a joint venture between the Dominican Government and Shell International Petroleum with equal shareholdings. In December 2008, the Dominican State acquired Shell's 50% stake for $110m. The Company is state owned with 51% of shares belonging to the Government and 49% to Petroleos de Venezuela (PDVSA). In November 2009, the Dominican Government sold a 49% stake in the refinery to Petróleos de Venezuela (PdVSA), for $131.5m. The sale was in lieu of part payment of $1bn owned by the Dominican Government to Venezuela for the crude oil supplied. Capacity and Output REFIDOMSA produces Gasoline, LPG, Gasoil, Jet Feul and fuel oil. Out-

puts amount to 33,000 bbl/d barrels per day.

on the company‟s profitability and viability well into the future.

Trinidad & Tobago

The Refinery generates products such as Aviation Gasoline, Avjet/Kerosene, Diesel/Heating Oil, Fuel/Oil, Liquified Petroleum Gas (LPG), Motor Gasoline and Sulphur and has the capacity to produce 175000 barrels per day and an average output of 127,650 barrels per day.

The Pointe-a-Pierre Refinery PETROTRIN‟ began operations in 1993 as a the result of a series of mergers and acquisitions prior to its coming into being. Located on the West coast of Trinidad and Tobago, it has the capacity to process a wide variety of Crude oil supplies with varying gravity and sulphur specifications, thus giving the Company the ability to purchase Crude oil from a range of suppliers.

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Recently, PETROTRIN began exploring bunkering opportunities in the Panama Canal in a strategic move to position the Company as a key international transit point.

Jamaica

The refinery recently engaged in a Clean Fuels Program at Pointe-aPierre, which involves the Gasoline Optimisation Program (GOP) and the Ultra Low Sulphur Diesel (ULSD) project in an effort to improve the company‟s international marketability. These projects will assist in ensuring full conversion capability of 168,000 bpd, enabling the company to produce cleaner and more environmentally friendly products – gasoline and diesel to both for regional and international markets which will impact positively

The Petrojam Refinery has its main business in refining Crude oil into finished products. it is jointly owned by Petroleum Corporation of Jamaica (PCJ) and PDVCaribe (a subsidiary of Petróleos de Venezuela). Established in 1982 when the Government of Jamaica purchased the Esso Kingston Refinery, it was built, owned and operated by Esso since March 1964. By 2006 the continued on page 7

PETROTRIN oil refinery in Trinidad & Tobago. PHOTO/File Image source: www.thehabarinetwork.com

La Refinería Dominicana de Petróleo Image source: www.almomento.net

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The Petrojam oil refinery in Kingston file photo. Image source: www.jamaicagleaner.com

Y S T E M

(CEIS)

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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2012

PETROLEUM NEWS & HAPPENINGS Barbados government planning to award offshore oil exploration licences [...]..Read more Barbados to award offshore drilling licences [...]..Read more St Lucians paying more for petroleum products [...]..Read more LNG AND FUTURE POWER GENERATION [...]..Read more

Cuba’s oil top priority [...]...Read more

NO CABINET DECISION YET TO APPEAL JPS RULING [...]..Read more

AES Andres, InterEnergy Holdings to develop natural gas in Dominican Republic’s east region [...]..Read more St Lucia opposition calls on PM to answer ten questions on oil exploration deal [...]..Read more Fuel Bills: An Impending Disaster [...]..Read more BP Makes Trinidad Gas Discovery [...]..Read more BP discovers 1 trillion cubic feet of gas offshore Trinidad [...]..Read more Russian oil company close to offshore Cuba drilling [...]..Read more Trinidad wins $1.3 billion offshore patrol vessels settlement [...]..Read more

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(CEIS)

Caribbean Petroleum Update : November 2012 | Call: 1-876-927-1779

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REGULAR UNLEADED GASOLINE AVERAGE PRICES AT THE PUMP November 2012 Analysis of retail prices for Regular Unleaded Gasoline in the following selected seven (7) Caribbean countries at the end of November 2012 revealed that two countries had price increases (Barbados and St Lucia), four countries saw decreases (Bahamas, Belize, Dominica and Jamaica) while prices in Antigua/Barbuda price remained stable since the start of the year.

Regular Unleaded Gasoline Average Retail Price (US$/Litre) 2012 COUNTRIES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV

ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] DOMINICA JAMAICA 87 Octane[E10]

1.23 1.33 1.55 1.41 1.12 1.27 1.21

ST. LUCIA

1.23 1.35 1.59 1.45 1.14 1.30 1.22

1.23 1.44 1.66 1.51 1.19 1.32 1.22

1.23 1.46 1.72 1.54 1.25 1.37 1.24

1.23 1.47 1.77 1.55 1.30 1.32 1.25

1.23 1.46 1.78 1.49 1.29 1.26 1.27

1.23 1.39 1.70 1.47 1.22 1.26 1.28

1.23 1.41 1.70 1.58 1.17 1.31 1.25

1.23 1.52 1.70 1.59 1.17 1.33 1.22

1.23 1.52 1.73 1.61 1.28 1.29 1.23

1.23 1.42 1.76 1.44 1.27 1.27 1.25

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.

CHART OF RETAIL PUMP PRICES FOR NOVEMBER 2012

Comparative Retail Pump Prices Regular Unleaded Gasoline NOVEMBER Avg vs 11 Mths Avg (Jan - November 2012)

US$/Litre

2.00 1.80

NOV

1.60

AVG

1.40 1.20 1.00 0.80 0.60 0.40 0.20 BARBADOS

BELIZE

BAHAMAS

DOMINICA

JAMAICA

ST. LUCIA

ANTIGUA

7 Caribbean Countries

See prices for all products at www.cippet.org .

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Y S T E M

(CEIS)

11 Mths AVG 1.23 1.44 1.70 1.51 1.22 1.30 1.24

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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2012

Image source: http://www.guy-sports.com

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Caribbean Petroleum Update : November 2012 | Call: 1-876-927-1779

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Caribbean Oil Refineries - A look at History, Capacity, Output and Plans……………………….................................................... continued from page 3 Government of Jamaica had sold 49% of its shares to PDVCaribe. Petrojam now supplies Jamaica with a full range of domestic, transportation and industrial petroleum products. The company focuses primarily on meeting the needs of the national market, and does this through a mix of refining and importation of finished products. It also operates a laboratory which provides quality control and certification services for products manufactured and imported by the refinery to Jamaican businesses and the scientific community. The Refinery maintains high standards for quality; health and safety, environmental protection. Petrojam has an installed capacity of 35,000 barrels per day with output production at 28,000 to 30,000 barrels/ day. Products generated comprise Liquefied Petroleum Gas (LPG), E-10 Gasoline (87 and 90), Automotive Diesel Oil, Jet/Turbo Fuel, Kerosene,

Heavy Fuel Oil (HFO) 2 wt% and 3 wt% Sulphur, Asphalt, Intermediate Fuel Oil (IFO 380) and Marine Diesel Oil.

the local market and sulphuric acid for export. The basic products generated by the refinery include Crude oil, Gasoline, Diesel, Fuel oil and Bitumen. Average Crude oil production is 16,000 barrels per day and the refinery has a processing capacity of 7,350 barrels of crude oil per day. Output last year totalled 2.74Mb, up 8% from 2008.

Plans are in place to upgrade the facilities to increase its capacity from 35,000 barrels per day to 50,000 barrels per day.

Suriname Staatsolie Maatschappij Suriname N.V is a state-owned oil refinery company that was established in 1980 with the operation of a Thermal power plant since 2006. The refinery is about 5km south of capital Paramaribo in Wanica district. It has undergone several upgrades and expansion in 2004 and 2005, with further expansion in 20082012 as part of a strategic plan that aims to double the refinery's capacity to 15,000b/d in 2013. The overhaul aims to produce high-quality end products including diesel and gasoline for

Staatsolie's refinery Image source: www.devsur.com

Image source: www.supplychain n.blogspot.com Source: http://www.kentonline.co.uk/kentonline/news/2011/april/19/nu-venture_supports_charter.aspx?theme=print

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(CEIS)

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Call: 1-876-927-1779 | Caribbean Petroleum Update : November 2012 Average Weekly & Monthly Crude Oil Prices (September November 2012)

100.0

97.56

98.0

94.6

US$/BBL US$/BBL

96.0

94.0

91.59

92.0 90.0

87.34

88.0 86.0 84.0

Sep

82.0

Oct

Nov

Mth Avg

80.0

WK 1

Assessment of International Crude Oil prices over the three months period September - November 2012 saw prices in November averaging at US$91.7/BBL. When compared to the average prices seen in September and October, this average price was approximately 0.64% higher and 1.17% higher respectively. The highest average price seen in November was US$87.34/BBL seen in the third week. This price was approximately 1.17% lower than the highest price seen in September and 0.49% lower than October‟s average price. Although prices for the three months were seen at an all time low in November, the price went down to US$85.87/BBL in the second week of the same month.

WK 2

WK 3

WK 4

Period

Average Monthly World Crude Oil Prices (2009 - 2011) 109.61

108

US$/BBL

88.14

88 78

76.19

58 48

2009

2010

2011

Featured Offers:

Jan

Feb Mar Apr May Jun

Jul

Aug Sep Oct Nov Dec

Period

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.

Yr Avg

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