LATAMNRG PROSPECTOR VOL 5 2019
ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS
Changes To Argentina’s Gas Subsidy Program Raise Eyebrows
To this end, Argentina’s President Mauricio Macri is expected to travel to India in mid-February to analyze how India and Argentina can work together in Vaca Muerta, now that Argentina has started exporting energy, reported online media Ecos Del Neuquen.
(Energy Analytics Institute, Aaron Simonsky, 1.Feb.2019) — YPF and Techint plan to review actual and future investment plans in Neuquén, claiming a recently announced reduction in Argentina's natural gas subsidy program would generate large losses, reported online media Río Negro.
Argentine Energy Secretariat Delays Publication Of Resolution
A recent decision by the Argentine government to not incorporate more developments into the country’s subsidy program related to the production of unconventional gas has generated a wave of questions on part of both oil companies, among others, according to Río Negro. The companies have not only threatened to initiate legal actions, but also have announced they would review whether or not they would continue with planned unconventional investments.
Gas Regasifcation Ship Will Not Return To Bahía Blanca (Energy Analytics Institute, Aaron Simonsky, 28.Jan.2019) — The natural gas regasification ship once anchored in the port of Bahía Blanca will not return to Argentina, while the ship at Escobar will continue in the South America country, reported online media El Diario.
(Energy Analytics Institute, Aaron Simonsky, 28.Jan.2019) — Argentina’s Energy Secretary Gustavo Lopetegui stopped the publication of a resolution filtered to a number of companies last week related to adjustment of Resolution 46. Modification of resoluion could result in judgments to the state for $2,500 million, reported online media Econo Journal Argentina.
Argentina’s Energy Secretary Reportedly Making Changes (Energy Analytics Institute, Aaron Simonsky, 23.Jan.2019) — Alejandro Sruoga will leave the power ministry to assume a board position with the Binational Entity of Yacyretá (EBY). His replacement will be Juan Garade, reported online media Econo Journal Argentina. Additionally, Carlos Casares will be appointed as Hydrocarbons Undersecretary, reported the media.
India Eyes Argentina’s Vaca Muerta Formation
Sánchez Reconfirmed As Bolivia’s Hydrocarbon Minister
(Energy Analytics Institute, Aaron Simonsky, 28.Jan.2019) — India’s Ambassador to Argentina, Sanjiv Ranjan, said his country is seeking work in the unconventional Vaca Muerta formation despite changing headwinds in both countries to reduce the use of hydrocarbons in lieu of renewable energies.
(Energy Analytics Institute, Ian Silverman, 28.Jan.2019) — Bolivia reaffirms Luis Alberto Sánchez as the country’s Hydrocarbon Minister, effective January 23, 2019, reported online media El Diario.
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Bolivia Eyes Exporting Gas to Paraguay And Peru (Energy Analytics Institute, Ian Silverman, 28.Jan.2019) — Land-locked Bolivia is eyeing exports of its natural gas to Paraguay and Peru, reported online media El Diario, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.
Shell And Partners Start DeepWater Production At Lula North In Brazil
Petrobras Kicks Off Production At P-67 Platform In Santos Basin Pre-Salt (Petrobras, 1.Feb.2019) — Petrobras announced it started today, with its partners of the BM-S-11 Consortium, the production of oil and natural gas through P-67 platform, in the Lula Norte area, in the pre-salt of Santos Basin. With capacity to process up to 150,000 barrels of oil and compress up to 6 million m³ of natural gas per day, this is the ninth unit set up in the BM-S-11 block, in line with the company's Strategic Plan. The type FPSO platform, (floating, production, storage and offloading unit of oil and gas) is located at approximately 260 km off the Rio de Janeiro’s state coast, at a water depth of 2,130 meters, and will produce through nine production wells, in addition to being interconnected to its injection wells. Drainage of oil production shall be through lifting vessels, while the production of gas shall be drained by the routes of the pre-salt gas pipelines.
Petrobras Announces Payment Of $682.6 Million (Petrobras, 30.Jan.2019) — Petrobras, following up to the Press Release of 09/27/2018, informs that, today, it paid the Commitment Assumption Agreement, made with the Federal Public Prosecutor’s Office (MPF) and judicially approved on January 25, 2019, in the amount of $682.6 million, corresponding to 80% of the value of the resolution reached with the Department of Justice (DoJ) and the Securities & Exchange Commission (SEC) in the United States.
(Shell, 1.Feb.2019) — Royal Dutch Shell plc, through its subsidiary Shell Brasil Petróleo Ltda., announces with consortium partners the start of production at the Lula North deep-water project in the Brazilian Santos Basin. Production at Lula North is processed by the P-67 floating production and storage offloading vessel (FPSO) and is operated by Petrobras. The production hub is the seventh FPSO deployed at Lula and the third in a series of standardized vessels built for the consortium. It is designed to process up to 150,000 barrels of oil and 6 million cubic meters of natural gas per day. Shell and its partners began production at Lula Extreme South with the P-69 FPSO in October 2018.
Petrobras Board Approves Election Of Directors And Officers (Petrobras, 31.Jan.2019) — Petrobras, following up on the Press Releases of 4th, 7th and 14th of January of 2019, reports that its Board of Directors approved the appointments of Admiral Eduardo Bacellar Leal Ferreira as Chairman of the Board of Directors of the company, and João Cox as member of the Board. The appointments will be reviewed at the next Shareholders’ General Meeting.
ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS
Petrobras Offers Clarification On Divestment Of Pasadena Refinery
Canadian Solar Secures 295 Million Brazilian Reais Financing
(Petrobras, 30.Jan.2019) — Petrobras clarifies that, according to Petrobras’ Divestment Methodology, the following stages of divestment projects must be disclosed to the market: teaser, beginning of the non-binding phase (if applicable), beginning of the binding phase, granting of exclusivity for negotiation (if applicable), transaction approval by senior management and agreement signature, and transaction closing.
(Canadian Solar, 31.Jan.2019) — Canadian Solar Inc. has secured a 295 million Brazilian reais (US$80 million) financing from Banco do Nordeste S.A. (BNB) for its 114 MWp Salgueiro solar power project in the northeast state of Pernambuco, Brazil. BNB is the largest regional development bank in Latin America.
In this sense, the information on the divestment process related to the sale of the Pasadena refinery (operation) was duly disclosed to the market on 02/06, 03/08 and 05/04 of 2018.
Petrobras Reports Drop In Proved Reserves At YE:18 Vs YE:17 (Petrobras, 30.Jan.2019) — Petrobras discloses the volume of its proved petroleum reserves (oil, condensate and natural gas), estimated as of the end of 2018, according to ANP/SPE (National Agency of Petroleum, Natural Gas and Biofuels/Society of Petroleum Engineers) and SEC (US Securities and Exchange Commission) criteria. According to ANP/SPE criteria, as of December 31, 2018, Petrobras' proved oil, condensate and natural gas reserves reached 11.957 billion of barrels of oil equivalent (boe), as shown in Table 1. At the end of 2017, these volumes amounted to 12.415 billion boe. Petrobras succeeded to replace 96% of the produced volume, disregarding the effects of the divestments carried out in 2018, mainly due to drilling of new wells, positive responses to water injection and to the good performance of reservoirs in the pre-salt of Santos and Campos basins. The ratio between proved reserves and produced volume is 13.9 years.
The 114 MWp Salgueiro solar power project is part of the 478 MWp solar portfolio awarded to Canadian Solar during the past two Brazil A-4 energy auctions in December 2017 and April 2018. The Salgueiro project has a 20-year, inflation-linked power purchase agreement (PPA) with the Brazilian Electric Power Commercialization Chamber (CCEE). Construction is expected to start this year, with the plant entering commercial operations by mid of 2020.
LatinFinance Reveals Winners Of 2018 Deals Of The Year Awards (LatinFinance, 31.Jan.2019) — LatinFinance unveiled its 2018 Deals of the Year Awards in New York on Thursday, at an exclusive awards dinner recognizing stand-out transactions and institutions in the capital markets of Latin America and the Caribbean. Brazil’s state-owned energy company, Petrobras, led the way with awards in three categories, while Mexico and Bank of America Merril Lynch took home two awards each.
The IMF Says Chilean Economy To Grow In 2019 And 2020 (Energy Analytics Institute, Aaron Simonsky, 28.Jan.2019) — The International Monetary Fund projects the Chilean economy will grow 3.4% in 2019 and then 3.2% in 2020.
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The IMF also projects GDP growth in 2019 of 3.8% in Peru,; 3.2% in Colombia; 2.1% in Mexico; 2.5% in Brazil, while in Argentina the economy is expected to contract 1.7%.
Mexico Says Not Considering Importing More Crude Oil
“Growth in Chile will remain solid in 2019-2020 thanks to the strength of private consumption and the dynamism of investment,” reported online media Emol, citing an IMF report.
(Reuters, 28.Jan.2019) — Mexico is not considering importing any more crude oil after it imported from the United States at the end of last year, Energy Secretary Rocio Nahle told lawmakers on Monday.
Frontera And CGX Energy Execute Farm-In JV Deal, Bridge Loan
“We are not considering importing oil,” Nahle said, adding that Mexico would not import from Venezuela or anywhere else.
(Frontera, 1.Feb.2019) — CGX Energy Inc. and Frontera Energy Corporation announced execution of a farm-in joint venture agreement covering CGX’s two shallow water offshore Petroleum Prospecting Licenses in Guyana, the Corentyne and Demerara Blocks. These agreements remain subject to Guyanese government approval.
Weatherford Provides 4Q:18 Highlights On Colombia, Mexico (Weatherford, 1.Feb.2019) — Weatherford International plc released operational highlights from the Western Hemisphere during the quarter, including highlights on Colombia and Mexico. -- A major operator in Colombia awarded Weatherford a four-year contract valued at $100 million for drilling and completion activities. -- A Weatherford Integrated Services and Projects team with members from multiple disciplines – including flow assurance, formation evaluation, and completion design – developed a program for an unconventional onshore well in Mexico.
Mexican state-run oil company Pemex in October purchased four shipments of 350,000 barrels of light crude oil from the United States for delivery in November to be used at its refineries.
Is Guyana In Control Of Its ‘Oil Dorado’? (Stabroek News, Phil Miller, 28.Jan.2019) — Guyana’s High Commission in London threw open its doors on Thursday night to tell investors about the country’s newly discovered oilfields. Tellingly, the event was dubbed “Oil Dorado”. British companies Tullow Oil and Stena Drilling are already involved in Guyana’s energy industry, along with US giant Exxon and others. The head of Guyana’s energy department, Dr. Mark Bynoe, spoke to the event via Skype. He said Guyana was “open for business” and could become one of the world’s top 10 oil producers.
Sanctions Put Squeeze On Venezuela’s Output: Wood Mackenzie (Wood Mackenzie, 2.Feb.2019) — The sanctions the US government has imposed against Venezuela aim to curb the Maduro government’s access to revenue from crude export. But impact could they have on state-run oil producer PDVSA and the country’s energy sector? Ann-Louise Hittle, vice president Macro Oils, at global natural resources consultancy Wood Mackenzie said: “We estimate Venezuela’s production currently stands at 1.1 million barrels of oil per day (b/d).
ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS
“We believe production will likely fall to around 900,000 b/d under pressure from sanctions and a lack of materials for workovers, but we expect waivers will ease the full impact of the sanctions until they expire.”
Venezuela Taking Steps To Prevent U.S. From ‘Stealing’ CITGO
Chevron has four joint-venture operations for exploration and production with PDVSA, as the Venezuelan company is known. The Trump administration has banned U.S. companies from doing business with PDVSA but allowed a six-month grace period for companies with ongoing operations in the South American country.
Venezuela Oil Sanctions Pose A Challenge For Chevron And Valero (Barron’s, Evie Liu, 29.Jan.2019) — New U.S. sanctions on Venezuela’s state-owned oil giant not only place more pressure on Venezuelan President Nicolás Maduro’s regime, but also on some U.S. refiners that rely on crude imports from the country. The Trump administration said late Monday the U.S. will impose sanctions on Petróleos de Venezuela SA, or PdVSA, just one week after the U.S. recognized opposition leader Juan Guaidó as the country’s legitimate president.
(Energy Analytics Institute, Piero Stewart, 2.Feb.2019) — Nicolas Maduro, no longer recognized by the U.S., among numerous other countries worldwide as Venezuela’s president, announced the country was “taking actions to defend the interests of the country” and to defend PDVSA’s U.S. refining arm Citgo Petroleum. “We’re not going to let them steal Citgo,” said Maduro in a broadcast on Venezuelan state television. “This company belongs to the Venezuelan people,” he said.
Chevron Says Ops In Venezuela Will Continue For The “Foreseeable Future” (AP, 1.Feb.2019) — Chevron Corp. says its operations in Venezuela will continue normally for the “foreseeable future” despite newly imposed U.S. sanctions on Venezuelan state-owned oil company Petroleos de Venezuela SA.
Citgo Considers Bankruptcy Amid Venezuela Turmoil: Report (Fox Business, Brittany De Lea, 31.Jan.2019) — Venezuela’s opposition leader Juan Guaidó sits down with FOX Business’ Trish Regan to discuss the future of Venezuela and how long it will take to transition into a democratic country. U.S. oil refiner Citgo, which is majority owned by Venezuela’s socialist government, is considering filing for bankruptcy amid an ongoing fight over control of oil revenues – and political leadership – in the povertystricken country. Bankruptcy is one option executives and advisers at the large U.S. refiner are weighing to protect its assets as control over funding stirs global tensions between Washington and Caracas, The Wall Street Journal reported on Thursday, citing people familiar with the matter.
ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS
PDVSA, Oil Ministry Officials Analyze Declaration of Partial Force Majeure
Phillips 66 said in an email it is confident it could obtain alternative sources of oil to lessen any disruption to its operations. The company said it complies with all U.S. laws, and noted that Venezuelan crude historically has made up a small percentage of its oil supply. Chevron Corp said it actively manages its crude supplies to be able to furnish customers with fuels and lubricants, and continues to comply with U.S. laws.
U.S. Refiners To Feel Consequences Of Trump’s Venezuela Crackdown (CNN, Matt Egan, 29.Jan.2019) — The United States and Venezuela are going through a painful divorce that will have sweeping consequences for the global oil industry. (Energy Analytics Institute, Piero Stewart, 29.Jan.2019) — Officials from PDVSA and Venezuela’s Oil Ministry continue to evaluate the different options they can take to counter the recent sanctions announced by the U.S. against PDVSA, including the declaration of a partial force majeure, announced PDVSA President Manuel Quevedo in an official company statement.
Factbox – U.S. Energy Companies Respond To Sanctions On PDVSA (Reuters, 25.Jan.2019) — U.S. oil refiners said they would comply with the Trump administration's new sanctions announced on Monday on dealings with Venezuelan state-run oil company Petroleos de Venezuela (PDVSA) and take steps to lessen any impacts on consumers. Companies that provide oilfield services declined to comment on operations in Venezuela. Many have taken write-offs on Venezuelan holdings in recent years and some have opted to reduce operations in the South American country.
US oil prices surged 3% on Tuesday after the Trump administration imposed sanctions on PDVSA, Venezuela’s state-owned oil company. The penalties are meant to speed the demise of Venezuelan President Nicolas Maduros regime by starving his government of cash.
Oil Industry Braces For Turmoil From U.S. Crackdown On Venezuela (Reuters, 30.Jan.2019) — More than 24 hours after the United States announced large-scale sanctions on Venezuela’s nationally owned oil company, merchant trading firms and refiners were still deciphering what the measures prohibited. The sanctions, announced on Monday, are aimed at driving President Nicolas Maduro from power, the strongest U.S. measures yet against the socialist president who has overseen economic collapse and an exodus of millions of Venezuelans in recent years. _____________________________________ ENERGY ANALYTICS INSTITUTE Visit www.energy-analytics-institute.org to read the complete articles, among others.
ENERGY ANALYTICS INSTITUTE | LATAMNRG PROSPECTOR | HOUSTON • CARACAS