LatinPetroleum NRG Prospector 2Q:17

LATAM NRG PROSPECTOR

LATINPETROLEUM

Since 2000

2Q:17

Maduro Says Ready To Dialogue With USA

Energy Companies To Delay Venezuelan Oil Outlays

Venezuelan Nationalizations Without Compensation Make No Sense

IN THIS ISSUE …

1.July.2017

Pemex Awarded Blocks in Round 2.1

Executive Suite ….. 5-9

Legal ….. 10-12

Financial ….. 13-20

….. 41-42

Peru ….. 46-47

Trinidad and Tobago ….. 48-52

Venezuela

Petrobras SecureS R$7 bn With Banco do Brasil

….. 53-74

….. 15

Oil Nationalizations Without Compensation Make No Sense Whatsoever

Divestments ….. 21-23

Refining ….. 24-25

Pemex Concludes Ethylene E-Auction ….. 24

Top Oil

Venezuela’s oil sector remains in the dumps to say the least. The OPEC country’s investment pool of small-to-large capped services companies, integrated majors and national oil companies has dwindled to just a handful, if that many. ….. 53-56

ON THE COVER …

….. 27-29

Oil Price Stable Due To Fracking, Shale ….. 28

Brazil ….. 31-36

Colombia ….. 37

Guyana ….. 38-39

Mexico ….. 40-45

Venezuela’s President Nicolas Maduro.

Photo credit: PDVSA

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ABBREVIATIONS HYDROCARBON SECTOR B/d: Barrels per day Bbls: Barrels Bcf: Billion cubic feet Bcfe: Billion cubic feet equivalent Bcm: Billion cubic meters Bln: Billion Boe/d: Barrels per day equivalent EHCO: Extra heavy crude oil E&P: Exploration and Production Faja: Venezuela’s Orinoco heavy oil belt Ft: Feet JV: Joint venture LNG: Liquefied natural gas LPG: Liquefied petroleum gas M3: Cubic meters M2: Square meters M: Meters Mbbls: Thousands of barrels Mcf: Thousand cubic feet Mcfe: Thousand cubic feet equivalent MMbbls: Millions of barrels MMBtu: Millions of British thermal units MMcm: Million cubic meters MMcf: Million cubic feet MMcfe: Million cubic feet equivalent Mscf: Thousands of standard cubic feet MMscf: Millions of standard cubic feet MMscf/d: Millions of standard cubic feet per day MTPA: Million tons per annum MTPY: Million tons per year NGLs: Natural gas liquids PPM: Parts per million Tcf: Trillion cubic feet Tcfe: Trillion cubic feet equivalent Tcm: Trillion cubic meters WTI: West Texas Intermediate Note: All monetary figures are in USA dollars unless stated otherwise.

FINANCIAL CAPEX: Capital expenditures DD&A: Depreciation, deletion and amortization LOI: Letter of Intent MOU: Memoranda of Understanding YE: Year end WI: Working interest

STATE OIL ENTITIES (COUNTRY) ANCAP: Administración Nacional de Combustibles, Alcoholes y Portland (Uruguay) Cupet: Cubapetróleo (Cuba) Ecopetrol: Empresa Colombiana de Petróleos S.A. (Colombia) ENAP: Empresa Nacional de Petróleo (Chile) Eni SpA: Ente Nazionale Idrocarburi (Italy) PDVSA: Petróleos de Venezuela S.A. (Venezuela) PEMEX: Petróleos Mexicanos (Mexico) Petrobras: Petróleo Brasileiro S.A. (Brazil) PetroEcuador: Ecuador PetroPeru: Peru Petrotrin: Petroleum Co. of Trinidad & Tobago Ltd. YPFB: Yacimientos Petrolíferos Fiscales Bolivianos (Bolivia)

OTHER OIL & GAS ORGANIZATIONS API: American Petroleum Institute EIA: Energy Information Administration MEEI: Ministry of Energy and Energy Industries (Trinidad and Tobago) MENPET: Ministry of Energy and Petroleum (Venezuela) OPEC: Organization of Petroleum Exporting Countries

REGIONAL INITIATIVES ALBA: Bolivarian Alternative for America CELAC: Community of Latin America and Caribbean states Petrocaribe: Petrocaribe oil initiative

LATAM/CARIBBEAN COUNTRIES ARG: Argentina ARW: Aruba BHS: Bahamas BRB: Barbados BLZ: Belize BOL: Bolivia BRA: Brazil CYM: Cayman Islands CHL: Chile COL: Colombia CRI: Costa Rica CUB: Cuba DMA: Dominica DOM: Dominican Republic ECU: Ecuador FLK: Falkland Islands (Malvinas) GUF: French Guiana GLP: Guadeloupe GTM: Guatemala GUY: Guyana HTI: Haiti HND: Honduras JAM: Jamaica MTQ: Martinique MEX: Mexico NIC: Nicaragua PAN: Panama PRY: Paraguay PER: Peru PRI: Puerto Rico KNA: Saint Kitts and Nevis LCA: Saint Lucia VCT: Saint Vincent and the Grenadines SUR: Suriname

TTO: Trinidad and Tobago URY: Uruguay VEN: Venezuela VGB: Virgin Islands (British) VIR: Virgin Islands (USA)

ENERGY ANALYTICS INSTITUTE (EAI) In the USA Energy Analytics Institute (EAI) 2825 Wilcrest Drive, Suite 540 Houston, Texas 77042 Texas Charter No.: 800624190 EIN: 26-0435194 In Venezuela (Representative Office) Editores LatinPetroleum, C.A. Avenida Francisco de Miranda Edificio Galerias Venezias, Local 3 Municipio Chacao Caracas, Venezuela Subscription details:

energy-analytics-institute@hotmail.com Venezuela RIF.: J-31464958-2 Venezuela NIT.: 0493462636 LatAm NRG Prospector is a publication of EAI.

EAI (formerly LatinPetroleum, Inc.), absorbed the operations of LatinPetroleum and continues to operate in Venezuela under its 100 percent owned affiliate Editores LatinPetroleum, C.A. Copyright © 2000-2017. All rights reserved.

EXE SUITE PEMEX BOARD NAMES NEW CORPORATE DIRECTOR The Board of Directors of Pemexx appointed Armando David Palacios Hernández as the company’s corporate director of Joint Ventures and New Business. This appointment will come into effect on July 16.

Palacios Hernández, who substitutes José Manuel Carrera in this position, has a degree in Economics from the Instituto Tecnológico Autónomo de México (ITAM, Mexico’s Autonomous Technological Institute).

He began his long record of accomplishment at the Instituto Mexicano del Seguro Social (IMSS, the Mexican Social Security Institute). Later, he held various positions at the Ministry of Finance and Public Credit, including deputy director of the Retirement Savings Systems and deputy general director of Multiple Banking, as well as coordinator of counselors to the Chief Clerk.

At the IMSS he was the title holder of the Delegations Assessment Unit; director of Financial and Social Benefits, and Management director, which is the position he held until recently. [Pemex, 26.0Jun.2017]

PEMEX BOARD NAMES COMMUNICATIONS DEPUTY Pemex’s Board of Directors approved appointment of Erika Contreras Licea as Deputy Director of Communications and Marketing. In its previous session, the Board approved the restructuring to strengthen the positioning strategy for the Pemex brand, so as to better face the competition conditions in the sector. This change represents budget savings for Pemex, which is in line with the austerity policy that is being promoted by the current administration, by compacting and concentrating structures existing in other areas, thereby eliminating duplicates.

This Deputy Direction will concentrate the functions of corporate marketing and branding, social communications, diffusion, events and public relations, among others. Contreras Licea has been serving as Corporate Communications Manager since February of 2016. [Pemex, 27.Apr.2017]

PETROBRAS REQUEST FOR CANDIDATE REPLACEMENT Petrobras, as stated in Circular Letter CVM/SEP/01/2017, reported it has received a request for the replacement of the substitute candidate to the Fiscal Council (FC) nominated by preferred shareholders Leblon Previdência Fundo de Investimento Multimercado and Ataulfo LLC, whose elections will take place at the Annual Shareholders Meeting to be held on April 27, 2017.

Candidates nominated by preferred shareholders Leblon Previdência Fundo de Investimento Multimercado and Ataulfo LLC:

Candidate

Position

Sonia Julia Sulzbeck Villalobos Roberto Lamb

Member of FC - preferred (full member) Member of FC - preferred (alternate)

Source: Petrobras Below are the resumes of the nominated candidates: Sonia Julia Sulzbeck Villalobos, Brazilian citizen, married, administrator, Bachelor of Public Administration (1985) from EAESP - Getúlio Vargas Foundation and Master of Business Administration with specialization in Finance (2005) from EAESP - Getúlio Vargas Foundation. In 1994, she was the First Person in South America to receive the Chartered Financial Analyst - CFA credential, by the CFA Institute. She is Professor of Post-Graduation Lato Sensu, in the matters of Asset Management and Analysis of Financial Statements

by Insper. He holds positions on the Boards of Directors of CEG - Distribuidora de Gas do Rio de Janeiro SA and Telefônica do Brasil SA He has extensive experience in the financial market, having served as Head of the investment analysis department of Banco de Investimentos Garantia SA (1989 to 1996), Where he was voted Best Analyst in Brazil by Institutional Investor magazine in 1992, 1993 and 1994. He served as Senior Vice President of Bassini, Playfair & Associates, LLC (1996 to 2002) and Latin America Manager of Larrain Vial SA (2005 to 2011). She was the founding Partner and Manager of Lanin Partners Ltd., responsible for Long / short and long-only funds of Latin American stocks (2012 to 2016).

Roberto Lamb, Brazilian, physicist. Specialized in Monetary Economics and a holds a Master's degree in Financial Management. Former career employee at Banco do Brasil, he has served as standing Audit Committee member for several Brazilian companies, among which Marcopolo, Gerdau and AES Eletropaulo, AES Tiete Energia, and MARFRIG. Board of Directors member for CADAM S.A. based in Belém, PA, a company whose purpose is the extraction and processing of ultrafine kaolin. It is controlled

by KaMin, a company that operates in the kaolin extraction and processing segment, based in the state of Georgia, USA. He is a Certified Counselor by IBGC, where he coordinated the guidelines for best practices of the Audit Committee and the Auditing Committee and participated in the development of the handbook on best practices in Risk Management. He is a professor of Financial Management at UFRGS. He is the author of the Brazilian version of the book "Fundamentals of Financial Management" by Ross, Westerfield, and Jordan (McGraw Hill-Bookman, 2013) and of the Brazilian version of "Financial Administration" by Ross, Westerfield, and Jaffe (McGraw Hill-Bookman, 2015).

The names nominated above: -- In the last 5 years, they have not been subjected to criminal conviction, conviction in an administrative proceeding of the CVM and a final and unappealable conviction, in the judicial or administrative sphere, that has suspended or disqualified them for practicing professional or commercial activity; -- Do not have a marital relationship, stable union or informationable parentage according to item 12.9 of the Reference Form; -- They have no relationship of subordination with related parties of the company.

-- Meet the independence criteria of the Brazilian Institute of Corporate Governance (IBGC).

-- They had the information provided by the "Fiscal Counselor Registry of the Ministry of Planning, Development and Management" analyzed by Petrobras and the Ministry of Finance, which concluded that the nominees are not subject to any impediment and have all the requirements set forth in the Law 6,404/1976, Law 13303/2016 and Decree 8.945/2016, according to the minutes of the Temporary Eligibility Committee of Petrobras, which will be disclosed at http://www.investidorpetrobras.com.br/en/governancacorporativa/Governing bodies/committees, up to the date of the Annual General Meeting.

[Petrobras, 29.Mar.2017]

PETROBRAS CANDIDATES APPOINTED TO COUNCIL Petrobras, as stated in Circular Letter CVM/SEP/Nº01/2017, informs that has received appointment of candidates by the Controlling shareholder, represented by the Federal Government of Brazil, to Fiscal Council (FC). Elections will take place at the Annual Shareholders Meeting to be held on April 27, 2017.

The following candidates have been appointed by the controlling shareholder: Candidate

Position

Adriano Pereira de Paula Paulo José dos Reis Souza Marisete Fátima Dadald Pereira Agnes Maria de Aragão da Costa Luiz Augusto Fraga Navarro de Britto Filho Maurycio José Andrade Correia

Miembro del CF (titular) Miembro del CF (suplente) Miembro del CF (titular) Miembro del CF (suplente) Miembro del CF (titular) Miembro del CF (suplente)

Source: Petrobras Curriculum of the appointed candidates: Adriano Pereira de Paula, Brazilian, economist and public servant. It was approved in the first selective process carried out for General Coordinator in the Treasury (April 2010). He was the head of the General Coordination of Credit Operations, responsible for the budgetary, financial and accounting management of Official Loan Operations - OOC, aimed at the promotion of agricultural, agroindustrial and export activities.

In addition, to manage the economic subsidies for programs to promote the productive infrastructure, industry, housing, individual productive credit related to the Financial Charges of the Union (EFU), and the payments of indemnities and restitutions of the Program of Guarantee of the Agricultural Activity (PROAGRO).

In August 2016, he assumed the position of Undersecretary of Fiscal Policy of the National Treasury, having at his charge the planning and financial programming of the federal government, the management of federal funds, risks and assets of the Union, control of Treasury participation in state companies Subsidies and subsidies directly responsible to the Treasury.

Paulo José dos Reis Souza, Brazilian, a business administrator. Director of Programs of the National Treasury Department (STN) of the Ministry of Finance since August 2016. He held the following positions STN/MF: Undersecretary of Fiscal Policy; General Coordinator of Financial Programming; Coordinator of Financial Programming; and Manager. He joined the STN as Finance and Control Analyst in 1991, current Federal Auditor of Finance and Control. He has a postgraduate degree in Administration in the following areas: Public Policies and Government Management (Public Administration) and Public Sector Economics (Economy). He was Fiscal Counselor in the following companies: Infraero S/A (Airport Infrastructure); SERPRO (Technology and Information Systems); Eletropaulo S/A (Energy Distributor); Petrobras Distribuidora SA (Distribuidora de Combustíveis); INB - Nuclear Industries of Brazil S/A (Nuclear Fuel Production); Petrobras (Exploration and refining of Petroleum); and Banco do Brasil (Financial Sector).

Currently, he is also Fiscal Council member of VALE (Mining Sector).

Marisete Fátima Dadald Pereira. She has been a member of the Fiscal Council of Petrobras since 2011 and currently holds the position of head of the Special Advisory for Economic Affairs of the Ministry of Mines and Energy, a governmental entity, since August 2006, where she has held the position of special adviser to the Minister of Mines and Energy from August 2005 to July 2006. Her main professional experiences include: (i) manager of the Economic and Financial Department of Eletrosul Centrais Elétricas SA from 1987 to 2005; And (ii) Accounting and Fiscal Specialist of the Accounting and Fiscal Counsel David Rafael Blochtein, accounting advisory company, from 1973 to 1987. She is an accountant, graduated from Vale do Rio dos Sinos University, and holds a postgraduate degree in Accounting University of Vale do Itajaí and post-graduate in Auditing and Economic Sciences by the Federal University of Santa Catarina.

Agnes Maria de Aragão Da Costa, Brazilian, economist. She is a director and senior economist at the Ministry of Mines and Energy, with special emphasis on Energy and Mining Economies. She acts in the formulation of public policy recommendations and in the monitoring of the results of these policies, and has been in the Economic Advisory Service of MME for 10 years. She holds a bachelor's degree in Economics from the Federal University of Rio de Janeiro (UFRJ) and a master's degree in Energy from the University of São Paulo (USP). Her professional experience also includes having worked in a Brazilian bank in the area of Project Finance in the energy sector. She is currently a PhD student at the Technical University of Berlin. Fiscal Counselor of Eletrobras, servant of the career of Specialist of Public Policies and Governmental Management.

Luiz Augusto Fraga Navarro de Britto Filho, Brazilian, lawyer. He graduated in Law in 1991 and holds a post-graduate degree in Law and State in 2001 - both from the University of Brasília (UnB) - has served as a career counselor for the Federal Senate since 2004. He is Counselor of the Ethics of the Presidency of the Republic. He is a member of the Senior Committee of the International Anticorruption Academy. He was a member of the Executive Committee of the International Association of Anti-Corruption Authorities.

He was Chief Minister of the Office of the Comptroller General of the Union (CGU) from March to May 2016. At CGU, where he served for approximately ten years, he held the positions of Deputy Corregidor of the Economic Area (2003/2006), Secretary of Prevention of Corruption and Strategic Information (2006) and CGU Executive Secretary (2006/2013). Still in the Federal Executive Power, he held the position of specialist in Public Policy and Government Management, Ministry of Planning and Budget (MPOG) in 1998, and Market Regulation Manager of the National Sanitary Surveillance Agency (Anvisa) between 2000 And 2002. He was a member of the Financial Activities Control Council (Coaf) from 2003 to 2006. He served as a senior consultant for Veirano Advogados in the anticorruption area and was a member of Petrobras' Board of Directors from March 2015 to March 2016.

Maurycio José Andrade Correia, Brazilian, he holds a bachelor's degree in Law from the Federal University of Pernambuco - UFPE. In the Regional Electoral Tribunal of Pernambuco - TRE, from 1996 until August 03, 2007: effective positions of Judicial Technician and Judicial Analyst - Judicial Area; Advisor to the Presidency of the TRE/PE; Legal Adviser of the TRE/PE General Directorate and Head of the Jurisprudence Section of the TRE/PE Judicial Secretary. In the Attorney General's Office (AGU), as Lawyer of the Union, from August 2007 to the present date: from August 2007 until January 2010: exercise in the Ministry of Social Development and Fight against Hunger and from January 2010 onwards Ministry of Mines and Energy - MME: Appointed to the position in advisory committee - DAS 102.4 at 09/26/2011 to date; Appointed in May 2016 to act as Deputy Legal Consultant and as Lawyer of the Union in Conjur of the MME acting in the areas of oil, natural gas biofuels, electricity, mining.

The names nominated above: -- In the last 5 years, they have not been subjected to criminal conviction, conviction in an administrative proceeding of the CVM and a final and unappealable conviction, in the judicial or administrative sphere, that has suspended or disqualified them for practicing professional or commercial activity; -- Do not have a marital relationship, stable union or informationable parentage according to item 12.9 of the Reference Form;

-- They have no relationship of subordination with related parties of the company.

-- Meet the independence criteria of the Brazilian Institute of Corporate Governance (IBGC).

-- They had the information provided by the “Fiscal Counselor Registry of the Ministry of Planning, Development and Management� analyzed by Petrobras and the Ministry of Finance, which concluded that the nominees are not subject to any impediment and have all the requirements set forth in the Law 6,404/1976, Law 13303/2016 and Decree 8.945/2016, according to the minutes of the Temporary Eligibility Committee of Petrobras, which will be disclosed at http://www.investidorpetrobras.com.br/en/governancacorporativa/Governing bodies/committees, up to the date of the Annual General Meeting.

[Petrobras, 27.Mar.2017]

REELECTION OF PETROBRAS CEO Petrobras' Board of Directors approved the reelection of CEO Pedro Pullen Parente for a two-year term in the company's Executive Office.

Mr. Pedro Parente had been elected CEO as of May 31, 2016, following the term in office of the previous CEO, Mr. Aldemir Bendine. A new two-year term begins with this reelection.

The election process followed the rules of Petrobras Nomination Policy for the Members of the Fiscal Council, Board of Directors and Executive Office, including the review of integrity analyzes and the fulfillment of such other requirements for the position. The Nominating, Compensation and Succession Committee of Petrobras' Board of Directors evaluated all relevant documentation and recommended the approval of the new term in office to the Company's Board of Directors. [Petrobras, 27.Mar.2017]

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LEGAL COURT IN PDVSA’S FAVOR IN CRYSTALLEX LAWSUIT A Federal Court in the state of Delaware in the United States, dismissed a lawsuit filed by Crystallex International Corp. against PDVSA objecting to the payment of dividends from the PDVSA subsidiary in the United States.

Crystallex challenged the $2.8 billion dividend payment on the basis that the transaction prevented the execution of Crystallex’s arbitration award against Venezuela.

The Federal Court ruled that PDVSA has jurisdictional immunity under the US Foreign Sovereign Immunities Act. The decision was rendered on May 1, 2017, the same day that the US Supreme Court ruled in favor of PDVSA and the Republic in the case of Helmerich & Payne, a case related to the nationalization of drilling rigs in Venezuela.

[PDVSA, 3.May.2017]

PEMEX, PANAMERICANA SIGN COOPERATION AGREEMENT Pemex and the Universidad Panamericana signed a cooperation agreement that allows students from the university to perform professional legal practices in various areas of the company.

The agreement was signed by the rector of the Universidad Panamericana, José Antonio Lozano Díez and Pemex's legal director, Jorge Eduardo Kim Villatoro, who pointed out that the Energy Reform opens great opportunities for law students interested in the field.

The Universidad Panamericana was founded in 1967. It currently has three campuses and hosts over 12 thousand students studying 33 degrees.

With this agreement, Pemex opens its doors to prepare future lawyers at an early age through professional practices, said Kim. Rector Lozano Díez thanked Pemex for its cooperation in signing the agreement, which will allow Law School students of this University to participate in legal practices to strengthen the graduates' legal knowledge.

[Pemex, 4.Jul.2017]

PRISON FOR PERSONS IN FUEL THEFT IN MEXICO Pemex celebrated a recent ruling issued by the Supreme Court of Justice of the Nation, which confirmed a sentence of eight years in prison for five persons who were arrested in Guanajuato while stealing hydrocarbons from ducts that are the property of Pemex. The resolution by the first chamber of the SCJN, was made after several years of litigations.

For Pemex, this ruling represents an important step forward in fighting fuel theft, as it establishes a crucial judicial precedent in punishing this offence. Likewise, it confirms the commitment of the productive stateowned company in facing a problem that constitutes a grave danger to people's lives, affects communities and the environment, and damages the national patrimony.

Pemex will continue working closely with the inter-institutional group, which is formed by the Ministry of Finance, Sedena (Ministry of Defence), PGR (Office of the Attorney General) and Profeco (Office of the Federal Prosecutor for the Consumer), as well as state governments, to face and solve this problem.

[Pemex, 18.May.2017]

PETROBRAS SETTLES INDIVIDUAL ACTION IN US On June 19, 2017, Petrobras’ Board of Directors approved the signing of an agreement to end an individual action brought before the Federal Court of Pennsylvania, in the United States, by a group of affiliates of The Vanguard Group, Inc. Vanguard is one of the company’s largest shareholders, after the Federal Government and related entities.

Petrobras had already signed agreements to settle 19 other individual suits filed at the Federal Court of New York, United States, as announced on October 21, 2016, November 23, 2016, and on February 24, 2017.

Including the 19 individual suits with agreements previously entered into, a total of 27 individual lawsuits had been consolidated, for purposes of sentencing, in conjunction with a class action suit before the Federal Court of New York. The Vanguard lawsuit was the only individual lawsuit filed outside of New York.

To reflect the agreements entered into, as well as the ongoing negotiations with plaintiffs of other individual actions, the estimated total provisions amount to $445 million for the second quarter of 2017, of which the company had already accrued the amount of $372 million in the result for the year 2016.

It is not possible to make a reliable estimate of the outcome of the class action at the moment.

These agreements, the terms of which are confidential, are intended to eliminate uncertainties, burdens, and costs associated with the continuation of such disputes, and they do not constitute any acknowledgment of liability on Petrobras’ part. The company will continue to vigorously defend itself in other ongoing lawsuits.

[Petrobras, 26.Jun.2017]

NY COURT PARTIALLY ACCEPTS PETORBRAS APPEAL Petrobras announced the United States Court of Appeals for the Second Circuit overturned the class certification decision on July 7 and ordered that the lower court review the matter.

The Court partially accepted Petrobras' appeal, rejecting certain aspects of the decision and confirming others. Among other issues, the Court held that the judge should have considered the need to prove the location of the transactions in the United States through evidence common to the class members.

Petrobras plans to continue to take measures needed to defend its interests.

[Petrobras, 11.Jul.2017]

PETROBRAS INFORMS ON EIG GROUP LAWSUIT Petrobras announced that, on March 30, 2017, the United States District Court for the District of Columbia granted in part Petrobras’s preliminary defense (motion to dismiss) in the lawsuit filed by funds of the EIG Group, related to its investment in Sete Brasil Participações S.A. (Sete Brasil).

The court dismissed the claim of the plaintiffs that Petrobras engaged in a conspiracy to defraud the EIG Group. The court also dismissed all claims brought by EIG Management, one of the plaintiffs in the case.

In the same decision, the court denied Petrobras’ motion to dismiss the entire lawsuit and ordered that the remaining claims in the case could proceed against Petrobras beyond the motion to dismiss stage.

However, the court’s ruling is not a decision about the merits of EIG’s claims. The court only denied a motion to dismiss the entire case at its very beginning stages.

Petrobras intends to take an appropriate appeal of the court’s decision to the United States Court of Appeals for the District of Columbia Circuit to protect its rights.

[Petrobras, 3.Apr.2017]

FINANCIAL CHINESE, OTHER LOANS CONSIDERED DONATIONS Funding procured by the government of Venezuela’s President Nicolas Maduro from China, Russia and other countries will be considered donations if not approved by the National Assembly and will be treated as such, according to a Venezuelan lawmaker.

“All investments in the country will be considered a donation if they are not approved by the National Assembly,” announced Venezuelan economist Jose Guerra during an interview on Con Penzini y Todos broadcast via Globovision on April 18, 2017.

Not surprisingly, Chinese investors appear unwilling to inject more capital into Venezuela given the ongoing economic, political, and humanitarian crises affecting the OPEC member country with the world’s largest crude oil reserves.

“We understand that the Chinese are conscious of the situation here and they are not willing to loan more money to this government until they respect the National Assembly,” said Guerra.

Guerra, also an opposition lawmaker, said that Article 30 of Venezuela’s Organic Hydrocarbon Law states that any modification to petroleum contracts must be approved by the National Assembly.

“Article 312 states that all public indebtedness in Venezuela and international currencies has to be approved according to the law. Currently there is no validly approved budget or indebtedness law in Venezuela. So, investment banks, multilateral funds and bilateral accords need to be conscious that if they bring dollars to Venezuela that will not be able to recuperate those funds legally,” concluded Guerra.

[Piero Stewart, Energy Analytics Institute, 20.Apr.2017]

MADURO FACES ISSUES ATTRACTING INVESTMENTS Venezuela’s President Nicolas Maduro will not have it easy in terms of attracting investments, according to an expert on the Venezuelan petroleum sector.

“Recent announcements by the government of President Nicolas Maduro will have limited effectiveness in terms of attracting new investments despite the significant pragmatism that we are seeing in the government,” said Francisco J. Monaldi, Ph.D. and Fellow in Latin American Energy Policy & Lecturer in Energy Economics at Rice University’s Baker Institute for Public Policy in an interview broadcast by Rice University’s Baker Institute. [Piero Stewart, Energy Analytics Institute, 19.Apr.2017]

PEMEX PROTECTS ITS FINANCIAL BALANCE Pemex recently concluded the process to subscribe to an annual petrol coverage program, which will allow the company to protect its financial balance in the event of possible drops in the prices of the Mexican Export Blend, should they drop below the price established in the Income Law of the Federation. Thus, for the first time in eleven years, Pemex has its own coverage program, which will contribute to the compliance with its operation and investment commitments and will increase the certainty regarding its income, when faced with the possibility of a drop in hydrocarbon prices.

The coverage strategy for this year consisted in the partial protection of the cash flow of the company, considering a maximum of 409 thousand barrels per day for the months of May to December, at a price of $42/barrel, in accordance with the level approved by the Hon. Congress for 2017. The coverage that was subscribed provides Pemex with protection, should the average monthly price of the Mexican blend drop to between $42/barrel and $37/barrel. This is the range corresponding to the most likely scenarios regarding a downward trend of prices. Should the price drop below the $37/barrel limit, Pemex will receive the maximum amount of the protection subscribed. The investment of this operation was of $133.5 million.

This kind of coverage is usual among the great oil companies worldwide, and thus, Pemex continues to align its strategy to the best international practices. Additionally, this measure adds itself to the efforts being made to attain financial discipline, as per the 2017-2021 Business Plan, whose central axis is profitability and the commitment to comply with the goal of financial balance.

The coverage subscribed to by Pemex complements the one subscribed to by the Ministry of Finance and Public Credit. While the latter insures the oil income of the Federal Government, the one used by Pemex protects the balance of the company. [Pemex, 25.Apr.2017]

PETROBRAS ON SALE OF ASSETS IN PARAGUAY Petrobras commenced the stage of divulging the Teaser related to the sale of its assets in Paraguay. In this project, the company’s objective is to fully divest of the shareholding in Petrobras Paraguay Distribución Limited (PPDL UK), Petrobras Paraguay Operaciones y Logística SRL (PPOL), and in Petrobras Paraguay Gas SRL (PPG).

In Paraguay, Petrobras operates through the companies listed above on the fuel, LPG, and lubricant distribution and trade market, and has a network of 197 service stations and 113 convenience stores.

Petrobras also operates in the aviation, with operations at three airports, and major consumer (B2B) segments, and are the largest fuel distributor in the country. In terms of logistics, Petrobras also has a distribution terminal in the city of Villa Elisa.

In addition to the Teaser, the main subsequent stages of each of the company’s divestment projects will be disclosed as follows: - Beginning of the non-binding phase (where applicable); - Beginning of the binding phase; - Granting of exclusivity for negotiation (where applicable); - Transaction approval by the senior management (Board of Executive Officers and Board of Directors) and signing of the contracts; - Closing of the transaction.

This disclosure to the market is in line with Petrobras’ divestment system, which has been reviewed and approved by the Board of Executive Officers and is in line with the guidelines of the Federal Court of Auditors (TCU).

[Petrobras, 10.Jul.2017]

PETROBRAS NEW BANK OF NOVA SCOTIA FUNDING On June 30, 2017, Petrobras carried out a transaction with the Canadian bank The Bank of Nova Scotia, making the prepayment of $500 million in debt due to expire in 2019, and simultaneously hiring new funding in the amount of $750 million scheduled to mature in 2022 and without unsecured guarantees.

Petrobras will continue to evaluate new funding opportunities pursuant to its liability management strategy, which aims at improving the amortization profile and reducing the cost of debt, considering the deleveraging target set forth in its 2017-2021 Business and Management Plan.

[Petrobras, 4.Jul.2017]

PETROBRAS SECURES R$7 BN WITH BANCO DO BRASIL Petrobras executed a funding operation with Banco do Brasil in the form of an Export Credit Note (ECN) for R$7 billion, maturing in 2022. Simultaneously, the company settled in advance ECNs in the amount of R$6 billion, scheduled to mature in 2019, with the same financial institution.

Petrobras plans to continue evaluating new funding opportunities pursuant to its liability management strategy, which aims at improving the amortization profile and reducing the cost of debt, considering the deleveraging targets set forth in its 2017-2021 Business and Management Plan.

[Petrobras, 20.Jun.2017]

PETROBRAS REDEEMS SECURITIES DUE IN 2018 Through its wholly owned subsidiary Petrobras Global Finance B.V. (PGF), Petrobras sent early redemption notices to the investors of the 2.750 percent Global Notes, 5.875 percent Global Notes, and 4.875 percent Global Notes, all maturing in 2018. The redemption will be financed with funds raised in the recent issue of bonds.

The total redemption amount is equivalent to approximately $1.8 billion, excluding capitalized and unpaid interest and considering the Euro exchange rate of $1.1181/€.

The financial settlement for the repurchase will made on June 22, 2017.

The following table provides additional information about the securities to be redeemed:

Securities

Maturity

ISIN

Value-added of the Principle to be Liquidated (1)

2.750% Global Notes 5.875% Global Notes 4.875% Global Notes

15.Jan.2018 1.Mar.2018 7.Mar.2018

XS0982711631 US71645WAM38 XS0716979249

€539,664,000 $545,028,000 €573,777,000

Source: Petrobras Note: (1) Value added of the principle on the date of this announcement. [Petrobras, 26.May.2017]

PETROBRAS MAKES DEBT PREPAYMENT TO ITAÚ Petrobras made full prepayment of an export credit note with Banco Itaú for R$1 billion and with maturity in 2020.

Petrobras continues to evaluate new opportunities to manage liabilities, with a view to improving its amortization profile and reducing the cost of debt, considering deleveraging targets set forth in its 20172021 Business and Management Plan.

[Petrobras, 18.Jun.2017]

PETROBRAS’ NET INCOME WAS R$4.45 BILLION IN 1Q:17 Petrobras’ net income reached R$4.45 billion in the 1Q:17, reversing the loss posted in the same period a year ago. This reflects the company’s operating performance, despite the lower demand for oil products on the Brazilian market.

The quarter’s performance was the outcome of lower expenses with oil and oil imports due to the increased share of Brazilian oil in the throughput, to the growth in the supply of domestic natural gas, and to lower selling, overhead, and administrative expenses. In addition, there was a drop in net financial expenses and lower expenses with dry/sub commercial wells.

In operating terms, Petrobras reached a total oil and natural gas production of 2,805,000 boe/d. Oil output added up to 2,248,000 b/d, of which 2,182,000 b/d in Brazil, 10% more than in the 1Q:16.

Oil product sales on the domestic market were impacted by the contraction in demand and tougher competition with other players, closing at 1,951,000 b/d, 5% less than a year ago. Oil and oil product exports were up 72%, to 782,000 b/d, benefiting from a higher average Brent price and the appreciation of domestic oil. Oil and oil product imports, in turn, slipped 40%, to 290,000 b/d. These factors resulted in net exports of 489,000 b/d.

With increased operating generation and a 32% reduction in investments compared to the 1Q:16, the company posted a free cash flow of R$41.57 billion. The 1Q:17 was the eighth consecutive quarter of positive free cash flow, demonstrating our commitment to capital discipline.

Ongoing active debt management made it possible to extend the average maturity from 7.46 years, on Dec. 31, 2016, to 7.61 years on Mar. 31, 2017, in addition to a 3% reduction in gross indebtedness, which closed at $115.1 billion at the end of the 1Q:17.

The Ebitda, a benchmark the financial market uses as an approximation of cash generation, was R$25.2 billion in the first quarter of this year, 19% higher than a year ago, closing at a significant margin of 37%.

Adjusted Net Debt/Ebitda financial metric outlined in the company’s Business and Management Plan was reduced from 3.54, in late 2016, to 3.24, on Mar. 31, 2017, in a converging trend towards the target of 2.5 set for late 2018.

At Mar. 31, 2017, Petrobras had 65,220 employees, a 17% drop compared to a year ago due to the company’s Voluntary Dismissal Incentive Plan (PIDV).

Check out the highlights of the 1Q:17 results: Net Result -- Net income of R$4.45 billion in the 1Q:17, compared to a loss of R$1.2 billion a year ago. This result was determined by: -- Lower expenses with oil and natural gas imports, the increased share of domestic oil in the throughput, and the greater supply of domestic natural gas; -- 72 percent increase in exports, with higher average oil prices; -- 27 percent decrease in selling, overhead, and administrative expenses; -- 11 percent reduction in net financial expenses; and -- Lower expenditures with dry and/or sub commercial wells and idle equipment.

Free Cash Flow -- In the 1Q:17, free cash flow was positive for the eighth consecutive quarter, closing at R$13.4 billion, 5.6 times that posted a year ago. This result reflects the combination of the improvement in operating generation and lower investments.

Adjusted Ebitda -- Adjusted EBITDA was R$25.2 billion in the 1Q:17, 19% more than in the 1Q:16.

-- This result reflects lower operating expenses and lower expenditures with oil and natural gas imports.

-- The adjusted Ebitda margin was 37 percent in the 1Q:17.

Net Debt/Adjusted Ebitda ratio -- The net debt to adjusted Ebitda rate decreased to 3.24, on Mar. 31, 2017, from 3.54 on Dec. 31, 2016.

Leverage was reduced from 55 percent to 54 percent in the same period.

-- Gross debt decreased 5 percent, to R$364.8 billion on Dec. 31, 2016, down from R$385.8 billion on Mar. 31, 2017. Net debt, meanwhile, decreased 4 percent, to R$301.0 billion, down from R$314.1 billion.

-- In Dollars, the decrease in net debt was 1%, to $95 billion on Mar. 31, 2017, from $96.4 billion on Dec. 31, 2016.

-- Debt management made it possible to increase the average indebtedness term from 7.46 years, on Dec. 31, 2016, to 7.61 years on Mar. 31, 2017.

Oil and Natural Gas Production -- Average oil production in Brazil reached 2,182,000 b/d in the 1Q:17, 10 percent more than in the 1Q:16.

-- In the 1Q:17, total oil output in Brazil was 2,248,000 b/d, up 9 percent compared to the same period of the previous year.

Net Exports -- Petrobras maintained its position as a net exporter due to the 72 percent increase in oil and oil product exports and to the 40 percent reduction of imports compared to a year ago.

[Petrobras, 16.May.2017]

PETROBRAS INFORMS OF CARF TAX RULING The Brazilian Administrative Board of Tax Appeals (CARF) issued a ruling on April 4, 2017 on an administrative tax procedure for calculating Corporate Income Tax and the Social Contributions on the 2009 net profits of a Dutch subsidiary. The amount at issue is approximately R$1.5 billion.

Petrobras has not yet been formally notified of the ruling, and an appeal is still possible. Should this ruling be upheld, the company can still appeal to the Judiciary to defend its rights, so the ruling in question is not final.

Information on this matter was published in the 2016 financial statements, explanatory note 30 (Provisions for legal proceedings – item 30.3 – Contingent liabilities).

[Petrobras, 5.Apr.2017]

ANP NOTICE ON PARTICIPATION IN LULA FIELD Petrobras announced that, on 30 March 2017, Consortium BM-S-11 received a notice of violation issued by the National Petroleum, Natural Gas and Biofuels Agency (ANP), relating to the Lula Field in the Santos Basin pre-salt, for R$ 2.6 billion. This notice is due to the variance in applying oil prices used to calculate the governmental share from May 2013 to December 2016. The consortium will contest the ANP notice and, if necessary, adopt all judicial measures to defend its interests.

Consortium members understand they have acted according to the legislation which has been in force since 2000. The change in the interpretation of the rules applicable to the concession contract by the regulatory agency directly affects the economic and technical assumptions that support investment decisions. Consortium BM-S-11 will contest the notice.

Consortium BM-S-11 is formed by Petrobras (65% WI), as operator, in partnership with BG E&P Brasil - a subsidiary company of Royal Dutch Shell plc (25% WI) - and Petrogal Brasil (10% WI).

[Petrobras, 1.Apr.2017]

PETROBRAS UPDATES ON BAÚNA SALE Petrobras, in continuation to the material facts of 10/6/2016, 12/20/2016, and 3/15/2017 and to the press release of 11 November 2016, clarifies it has notified the Federal Supreme Court of the impossibility to proceed with the divestment process for the transfer of rights relating to the fields of Baúna and Tartaruga Verde. Furthermore, the company submitted the same information to the Federal Court of Aracaju, requesting the termination of court proceedings.

On March 15, as disclosed by Petrobras, TCU revoked the preventive order and, among other measures, upheld the permission to proceed with this sale process for being in advanced stage of negotiation, with the determination of compliance with the Court´s rules. In the face of this decision, the lack of conditions presented in the acquisition proposal and the maintenance of the effects of the judicial injunction, the continuation of this divestment process proved to be unfeasible, given the negotiation or procedural impossibility of resuming negotiations.

For this reason, the company waived the appeal before the Federal Supreme Court, which aimed to reverse the Court injunction. Finally, Petrobras informs that requested in all judicial instances for granting judicial secrecy, considering the need to preserve its own interests and third parties’ interests.

[Petrobras, 30.Mar.2017]

VENEZUELA INFLATION TO REACH 720% IN 2017 The International Monetary Fund (IMF) estimates that Venezuela’s inflation will reach 2,068 percent in 2018, up from an estimated 720.5 percent in 2017, according to an article published by Efe, citing data from the international agency.

OPEC member country Venezuela, when evaluated among the nine major economies in Latin America (including Venezuela, Argentina, Mexico, Brazil, Colombia, Bolivia, Peru, Chile, and Ecuador), is on track to register the highest inflation in the region in 2017 at 720.5 percent. Smaller OPEC member country Ecuador could register the lowest inflation among the nine major Latin American economies at 0.3 percent (see table).

Country

Inflation (2017 E)

Venezuela Argentina Mexico Brazil Colombia Bolivia Peru Chile Ecuador

720.5% 25.6% 4.8% 4.8% 4.5% 4.0% 3.1% 2.8% 0.3%

LatAm Average … with Venezuela … without Venezuela

85.6% 6.2%

Sources: IMF, Efe, Energy Analytics Institute (EAI).

[Piero Stewart, Energy Analytics Institute, 27.Apr.2017]

VENEZUELA ECONOMY TO CONTRACT 7.4% IN 2017 The International Monetary Fund (IMF) estimates that Venezuela’s Gross Domestic Product (GDP) will contract 4.1 percent in 2018, compared to a contraction of 7.4 percent in 2017, according to an article published by Efe, citing data from the international agency.

Venezuela -- the country with the world’s largest crude oil reserves -- when evaluated among the nine major economies in Latin America (including Venezuela, Argentina, Mexico, Brazil, Colombia, Bolivia, Peru, Chile, and Ecuador), is on track to register the largest economic contraction in the region in 2017 at 4.1 percent. Ecuador is the only major economy in the region that could also register an economic contraction of 1.6 percent. Land-locked Bolivia could register the highest economic growth among the nine major Latin American economies at 4 percent in 2017 (see table).

Country

GDP (2017 E)

Bolivia Peru Colombia Argentina Mexico Chile Brazil Ecuador Venezuela

4.0% 3.5% 2.3% 2.2% 1.7% 1.7% 0.2% (1.6%) (7.4%)

LatAm Average … with Venezuela … without Venezuela

0.7% 1.8%

Sources: IMF, Efe, Energy Analytics Institute (EAI).

[Piero Stewart, Energy Analytics Institute, 27.Apr.2017]

MOODY'S UPGRADES PETROBRAS RATING Moody’s upgraded Petrobras corporate debt from B2 to B1 and changed the outlook from stable to positive.

In its report, Moody’s highlighted the continuous improvement in the company’s liquidity profile and financial metrics over the last few quarters, due in part to greater cost efficiency and a new fuel pricing policy. These factors also helped Petrobras maintain access to capital markets and refinance part of its debt.

“Moody’s upgrading of Petrobras credit rating acknowledges the intense work that has been done to improve operational indicators, and the effort to cut the company’s debt. It shows that we are on the right path, but also indicates that things are at an early stage and there’s still a lot to be done,” said Petrobras President Pedro Parente.

Moody’s highlighted changes in the Brazilian regulatory environment that facilitate higher returns on longterm investments. They also acknowledged the management’s commitment to achieving the financial and operating targets set in the 2017-2021 Business and Management Plan.

Finally, the positive outlook is an indication that over the next 18 months, if the company’s liquidity and overall credit risk continues to improve, further upgrades are a possibility. [Petrobras, 11.Apr.2017]

DIVESTMENTS PETROBRAS SALE OF BM-S-8 EXPLORATION BLOCK On April 17, 2017 Petrobras become aware of the decision by the 2nd Federal District Court of the State of Sergipe, that granted an injunction to suspend the transfer of Petrobras’ stake in the BM-S-8 exploration block ("Carcará Field") to Statoil Brasil Óleo e Gás Ltda. and the exploration of the field by the purchaser, until further court deliberation.

As described in the Material Fact disclosed on 11/22/2016, this transaction had already been finalized after the fulfillment of all the precedent conditions set forth in the contract, with no restrictions, such as approval by the Administrative Council for Economic Defense (Cade) and by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

Furthermore, pursuant to the Material Fact disclosed on 11/28/2016, Petrobras clarifies that the $1.25 billion amount received upon the closing of the transaction was used in full for early settlement of part of the financing contract between Transportadora Associada de Gás S.A. (TAG), a wholly-owned Petrobras subsidiary, and the National Bank for Economic and Social Development (BNDES), where such a measure was adopted to reduce its indebtedness.

Petrobras announced it will take appropriate legal action on behalf of its investors and own interests.

[Petrobras, 17.Apr.2017]

NOVA TRANSPORTADORA DEAL COMPLETED Petrobras completed the sale, first announced on September 23, 2016, of 90 percent of the company's shares in Nova Transportadora do Sudeste (NTS) to Nova Infraestrutura Fundo de Investimentos em Participações (FIP), managed by Brookfield Brasil Asset Management Investmentos Ltda.

The transaction was completed on payment of $4.23 billion, after all the preconditions and adjustments in the sale agreement had been satisfied. In total, Petrobras received $2.59 billion for the shares and $1.64 billion for 10-year debentures convertible into shares issued by NTS in payment of a debt to Petrobras Global Trading B.V. (PGT), a wholly-owned subsidiary of Petrobras. The outstanding balance ($850 million, also relating to the sale of shares) will be paid over five years, and adjusted accordingly.

Petrobras will continue to use NTS natural gas transport facilities under current gas transport contracts, with no impact on deliveries of gas to distributors and other customers.

Transpetro will remain in charge of the operation and maintenance of assets under a new 10-year service agreement signed with NTS.

After closing this transaction, FIP sold some of its shares in NTS to Investimentos Itaú S.A. (Itaúsa), under the same commercial conditions as those governing the transaction between Petrobras and FIP. With the completion of the two transactions, NTS now has the following ownership structure: -- FIP: 82.35% -- Petrobras: 10% -- Itaúsa: 7.65% The Board of Directors of NTS will consist of seven members nominated by FIP, two by Petrobras, and one by Itaúsa.

The transaction was completed under the Partnership and Divestment Program totaling $13.6 billion over the 2015-2016 period. The sale is in line with the company's Strategic Plan/2017-21 Business and Management Plan, which allows for partnership agreements along the oil and gas supply chain. In addition, the transaction opens up opportunities for partnerships with other companies to strengthen the natural gas sector in Brazil, encouraging new investments in the expansion of gas transport infrastructure.

[Petrobras, 4.Apr.2017]

PETROQUÍMICASUAPE, CITEPE SALE APPROVED Petrobras, in continuation to the material fact disclosed on December 28, 2016, informs that, the Shareholders’ Extraordinary General Meeting approved the sale of 100 percent of the shares held by Petrobras in PetroquímicaSuape and Citepe to Grupo Petrotemex S.A. de C.V. and Dak Americas Exterior, S.L., subsidiaries of Alpek, S.A.B. de C.V. (Alpek), for $385 million, which will be paid on the closing date, and it is subject to working capital, net debt, and recoverable taxes adjustments.

This transaction is part of the 2015-2016 partnership and divestment program, that reached $13.6 billion in the biennium, and it is still subject to the fulfillment of usual precedent conditions, among them the approval of the operation by the Administrative Council for Economic Defense (CADE). The sale is aligned to Petrobras Strategic Plan, which provides for business portfolio optimization with full withdrawal from petrochemical interests.

Furthermore, now, there is no restriction to continuing this transaction, since the Regional Federal Court revoked the injunction that suspended the operation, as disclosed on the material fact of February 22, 2017.

Petrobras also clarifies that the decision of the Brazilian Federal Accounting Court (TCU), issued and announced on March 15, 2017, does not interfere in this sale process, since the purchase and sale agreement of PetroquímicaSuape and Citepe was already signed on December 28, 2016, prior to the publication of said decision. [Petrobras, 27.Mar.2017]

PETROBRAS UPDATES ON SHAREHOLDER MEETING Petrobras informed the Extraordinary General Shareholders Meeting, held on March 27, 2017 decided by the majority and has adopted the following: I. Election of Mr. Adriano Pereira de Paula as a member of the Fiscal Council appointed by the controlling shareholder, and; II. Approval of the sale of 100 percent of the shares held by Petróleo Brasileiro S.A. – PETROBRAS of Petroquímica Suape and CITEPE, to GRUPO PETROTEMEX, S.A. DE C.V. and DAK AMERICAS EXTERIOR, S.L., subsidiaries of Alpek, S.A.B. de C.V., for the amount, in Reais, equivalent to $385,000,000.000.

Federal Government, as the controlling shareholder, voted on item II of the agenda, considering a manifestation of the STN - Secretariat of the National Treasury that there may have been possible irregularities in the companies of the PQS Complex, and has determined that Petrobras promotes due determination of the facts, as well as to adopt any and all legal measures necessary accountability of the agents responsible for damages and to recover the damages caused to them.

[Petrobras, 27.Mar.2017]

REFINING PEMEX CONCLUDES ETHYLENE E-AUCTION For the first time, Pemex performed an auction to award quantities of this product Pemex Etileno, a subsidiary company of Pemex, successfully concluded the e-auction to adjudicate quantities of ethylene oxide, which is an essential product for the chemical industry, as it is a part of the value chain of end products such as plastics, pharmaceuticals and anti-freeze products, among others.

This gas is difficult to transport due to its explosion hazard, and its current production capacity is lower than its demand.

The online bidding process, in which the 10 companies using this product participated, stood out because of its transparency and competition. Because of the auction, 100% of the available volume available was placed at a market price that balanced both offer and demand and was higher than the historical price.

This fact marks a milestone in the national petrochemical industry, as it leaves behind the inert practice of Pemex both assigning the volume and setting the prices. This will allow for the promotion of competition and strengthening the market.

So, it will be the market, not Pemex, who will decide the final sales price. This procedure aligns with the best practices in international competition and allows for the exploration of alternatives to increase availability and supply of ethylene oxide to the industry in the country. Thus, Pemex complies with its mandate of profitability, by guaranteeing a price that is adjusted to market conditions.

[Pemex, 6.Jul.2017]

PEMEX RESTART AT SALINA CRUZ REFINERY Pemex TransformaciĂłn Industrial is currently performing various actions to restart operations at the Antonio DovalĂ­ Jaime Refinery in Salina Cruz, which was affected by the flood and fire caused by tropical storm Calvin.

The program contemplates three-way actions: Restarting operations; cleaning and rehabilitation of the affected site and general maintenance, taking advantage of the shutdown of the process. This last activity would allow for the advancement of the maintenance that was scheduled for next April, thus reducing the financial impact of the shutdown of the refinery. It is estimated that operations of the refinery will restart on July 30.

The installation of new crude oil pumps to feed into the refinery is underway, on a site different from the area where the fire occurred. This will allow the company to start pumping crude oil even before the cleanup and recovery work in the affected area has concluded, which is a task that has already begun as well.

The full Root Cause Analysis (RCA) is being performed, per applicable regulations, in order to establish the factors that originated the emergency.

Pemex hereby reaffirms to its customers that it has established several measures to guarantee the timely supply of fuels in the area.

[Pemex, 22.Jun.2017]

TOP OIL PEMEX CEO TOURS MIDDLE EAST Pemex CEO José Antonio González Anaya went on a working tour of various Middle-Eastern countries, where he met with senior directors of state-owned oil companies in Saudi Arabia and Kuwait.

During his visit to the cities of Dammam and Dhahran in Saudi Arabia, the Pemex CEO held meetings with Amin Nasser, president of Saudi Aramco, the largest oil producer in the world, with whom he discussed joint involvement opportunities for both companies. He also visited the oil fields of the Saudi oil company, which produces approximately 10 million barrels per day. He also visited research and human capital training centers of the company, as well as refining and co-generation facilities.

Later on, González Anaya travelled to Kuwait, where he attended a meeting with Shaikh Nawaf S. AlSabah, the president of Kuwait Foreign Petroleum Company, a subsidiary corporation in charge of the foreign investments of that country's state-owned company.

During the meetings with his counterparts, opportunities for the development of mutually beneficial investment and cooperation projects in various technological fields were analyzed.

Throughout his visit, González Anaya explained the changes that Pemex has undergone to meet the opening of the markets of the hydrocarbons sector in Mexico, since the of the Energy Reform promoted by President Peña Nieto came into effect. He pointed out that the Reform has given the State-Owned Productive Company flexibility and various tools to make its operation more efficient, strengthen its transparency and focus on profitability, becoming both an attractive partner and a competitive participant.

He also explained the recent joint ventures that Pemex has entered into with important international oil companies for deep water exploration and production, as well as with service companies for the rendering of auxiliary services in its refineries. Mexico is a good place for investments and Pemex is a strategic social partner for it, González Anaya said.

[Pemex, 24.May.2017]

PEMEX CEO VISITS WASHINGTON In Washington, the General Director of Pemex, José Antonio González Anaya, together with the Minister of Finance and Public Credit, José Antonio Meade, met with companies of the energy sector and qualifications agencies. He also held meetings with directors of financial institutions to create tighter bonds in their relationships with investors.

González Anaya explained that the strategy is to increase its financial efficiency to maintain an adequate balance and guarantee its sustainability.

Pemex’s CEO reported on progress in implementing the company’s 2017-2021 Business Plan, which defines actions to be performed throughout the business lines. He stressed the leading axis is profitability, and it is for this purpose that the tools and flexibility of the Energy Reform are being employed.

During his two-day business visit to the American capital, González Anaya was accompanied by the CFO, Juan Pablo Newman.

[Pemex, 21.Apr.2017]

OIL PRICE STABLE DUE TO FRACKING, SHALE Today, Venezuela is producing around 2.2 million barrels per day (MMb/d) compared to 14 years ago when the country produced 3.1 MMb/d, said Peruvian Economist José Gonzáles during an interview broadcast by Globovision.

The geopolitical situations in Korea and Afghanistan should have helped to push up oil prices, however, prices have remained quite stable. One of the main reasons is due in part to fracking and shale production, concluded Gonzáles.

[Jared Yamin, Energy Analytics Institute, 21.Jun.2017]

MILESTONE IN PEMEX HISTORY Last year was a turning point for Pemex, since the company’s financial situation has been bolstered, while at the same time its crude oil production has stabilized and eventually begun to increase. This was the gist of the remarks made by José Antonio González Anaya, Chief Executive Officer of Pemex, at a conference of the OTC (Offshore Technology Conference) – the world’s largest crude oil trade fair for offshore drilling and production. The event was attended by approximately 8,000 persons.

At this conference – the most heavily attended at the event – González Anaya said that, for the first time in its history, Pemex is implementing a profitability-oriented Business Plan in all of its lines of business.

Taking advantage of the advantages and flexibility offered by the Energy Sector Reform, he said that the company is moving forward with its aggressive alliance and farm-out program.

This event evidenced considerable interest in the fact that there are investments to be made and projects to be carried out in this sector with Pemex. The OTC is the key international meeting place for oilproducing and service companies for the promotion of joint ventures.

With regard to Pemex’s situation and prospects, González Anaya mentioned that, in addition to the contract it has signed with the Australian company BHP Billiton to develop the Trion deep-water block, an alliance has been formed with the company Air Liquide to supply hydrogen to the Tula, Hidalgo refinery. In addition, Pemex has another four farm-outs in process for deep-water, shallow-water and inland projects.

González Anaya also visited Rice University’s Baker Institute, where he gave the keynote speech regarding Pemex’s situation and prospects. He mentioned the need to redefine investment strategies in order to achieve the timely and effective implementation of the deep-water farm-out projects. He said that the progress which has been achieved in implementing the Energy Reform at Pemex has been of great importance. Later, at a talk with the academic community of the Center for Energy and Central Mexico Studies of that university, he waxed optimistic about Pemex’s future and that of Mexico’s oil industry.

During his working trip to Houston, Pemex’s CEO also held meetings with member companies of the Greater Houston Partnership and of the Association of Mexican Companies in the United States. He also met with the directors of Chevron and BHP Billiton. [Pemex, 4.May.2017]

UH LAW CENTER TO PROMOTE RESEARCH The Environment, Energy & Natural Resources Center at the University of Houston Law Center launched an “Energy Visiting Scholar” research program with two former Latin American government officials as its first participants.

The joint initiative with UH Energy is a unique effort to promote exchanges and research on best regulatory practices in the oil and gas industry in the Americas.

The initial visiting scholars are Magda Chambriard, former president of the Brazilian National Petroleum Agency (ANP), and Dr. Yvonne Fabara, former Secretary of Hydrocarbons of Ecuador (SHE).

They will be affiliated with the Law Center for one year, conducting research, participating in lectures, and sharing their expertise on specific concerns that affect the oil industry in the western hemisphere "We are very fortunate to have these two outstanding experts and energy leaders from the Americas, who will help us disseminate both fact-based research and policy recommendations to government, decisionmakers and the general public on vital energy issues," said UHLC Research Professor Julian Cardenas, who is coordinating the program.

The energy scholars program is an offshoot of the “Inter-American Hydrocarbons Regulators Dialogue,” an initiative started by the EENR Center in 2016 that seeks to bridge the gap between the oil and gas industry, national hydrocarbon agencies and academia.

[University of Houston Law Center, 5.May.2017]

BRAZIL

Oil worker in Brazil. Source: Petrobras

PETROBRAS FORMS ALLIANCE WITH CNPC Petrobras’ CEO, Pedro Parente, and the vice president of CNPC and CEO of PetroChina, Wang Dongjin, signed a Memorandum of Understanding (MOU) in Beijing to begin negotiations for a strategic partnership.

Based on this MOU, the companies undertake to jointly evaluate opportunities in Brazil and abroad in key areas of mutual interest, benefiting from their capabilities and experience in all segments of the oil and gas chain, including the potential structuring of funding.

[Petrobras, 11.Jul.2017]

PETROBRAS OUTPUT REACHES 2.81 MMB/D IN JUNE Petrobras’ total oil and natural gas output in June was 2,805,000 barrels of oil equivalent per day (boe/d).

Of this total, 2.70 million boe/d were produced in Brazil, while 113,000 boe/d abroad. The average oil output in the country was 2.20 million barrels per day (b/d), 0.6 percent more than in May. This result is mainly due to production resumption, after a scheduled shutdown, at platform P-43 - located in the Barracuda and Caratinga fields, in the Campos Basin - and at FPSO Cidade de Mangaratiba, in the Lula field, in the Santos Basin pre-salt cluster.

In June, natural gas production in Brazil, excluding the liquefied volume, was 80.3 million cubic meters per day, 1.8 percent more than in the previous month. This increase is mainly due to production resumption at FPSO Cidade de Mangaratiba.

New records set in the pre-salt The oil production Petrobras operates (own and partner shares) in the pre-salt layer set two new records in June: The monthly one, with an output of 1.35 million b/d, and the daily, set on June 19, coming in at 1.42 million barrels. Additionally, the oil and natural gas output Petrobras operates set a new record, at 1.69 million boe/d.

Contributing to this result was the start of production at the P-66 platform, in the Lula field, and the addition of new production wells connected to FPSOs Cidade de Caraguatatuba, Cidade de Ilhabela, Cidade de Maricá, Cidade de Mangaratiba, and Cidade de Saquarema - all operating in the Santos Basin.

Oil and gas abroad In June, oil output at fields located abroad was 65,000 b/d, up 0.1 percent compared to the previous month’s mark. Natural gas production was 8.1 million cubic meters per day, 13 percent less than the May 2017 output. This decrease was mainly due to the lower demand for gas production in Bolivia and reduced production at the Hadrian South field, in the United States.

[Petrobras, 19.Jul.2017]

PETROBRAS OIL AND GAS OUTPUT IN MAY In May, Petrobras’ total oil and natural gas output was 2,80 million barrels of oil equivalent per day (boe/d), of which 2.68 million boe/d produced in Brazil and 120,000 boe/d abroad. The average oil output in the country was 2.18 million barrels per day (b/d), 3.9 percent more than in April.

The outcome is mainly due to production getting underway at another project, in the southern area of the Lula field, in the Santos Basin, through platform P-66, on May 17; to the resumption of production at platforms P-37 (Marlin field, in the Campos Basin) and FPSO Cidade de Angra dos Reis (Lula field), as well as to a new production well coming on stream in the Marlim Sul field, In the Campos Basin.

Natural gas production in Brazil, excluding the liquefied volume, was 78.9 million cubic meters per day, 0.5 percent more than in the previous month.

Production in the pre-salt In May, the oil and natural gas output Petrobras operates (own and partner portions) in the pre-salt layer added up to 1.57 million boe/d, 5.1 percent more than the previous month’s. This result was mainly due to the start of production at the Lula Sul project, through the P-66, and to the return to production after the maintenance shutdown at the FPSO Cidade de Angra dos Reis platform.

It is important to note that in comparison with May 2016, there was a 37 percent increase in output at the pre-salt layer.

Oil and gas production abroad Oil output at overseas fields was 65,000 b/d, up 1 percent compared to the previous month’s mark. This outcome was mainly due to production starting at a new well in the Saint Malo field, in the USA. Natural gas production was 9.3 million cubic meters per day, 3 percent less than the April 2017 output.

This reduction was mainly due to the lower demand for gas production in Bolivia.

[Petrobras, 1.Jul.2017]

KAROON HAS 129 MMBBLS IN NET RESOURCES Karoon Gas Australia Ltd announced it has net 2C contingent resource estimates of 54 MMbbls at Kangaroo and 75 MMbbls at Echidna, reported the company in a corporate presentation on 13 February 2017.

Highlights from the presentation follow: Recent Transaction … ‐ Karoon has won a bid for and completed the majority of negotiations with Petrobras for the acquisition of 100 percent operated interest in the Baúna field, and a 50 percent non‐operated interest in the Tartaruga Verde oil development Brazil: Santos Basin … ‐ An injunction remains in-place on this sales process, court hearings and processes are ongoing Acquired 100 percent in 5 blocks in 2008, in mid‐water‐depth (400m) ‐ Farmed‐out 35 percent to Pacific (2012), for cash & carry on wells costs ‐ Three oil discoveries: Kangaroo, Bilby & Echidna ‐ Net 2C contingent resource estimates of 54 MMbbls at Kangaroo, and 75 MMbbls at Echidna ‐ High quality oil, no gas, in good “post salt” sandstone reservoirs confirmed by logging and flow‐rate testing

‐ Several undrilled prospects ‐ Pacific’s 35 percent interest acquired in Sept 2016 for up to $20.5 million, equating to $0.45/bbl of 2C contingent resource Mapping and Seismic Attributes …

AVO (amplitude versus offset) calibrated at Paleocene level shows: ‐ Excellent match of AVO anomaly results with mapping and pressured at a defining the distribution of oil at Echidna and Kangaroo ‐ Additional potential identified at the Emu Updip, Joey and Bilby Updip prospects to-date ‐ Additional prospectivity possible at Puggle Lead and Platypus Paleocene Lead Echidna Appraisal Well Locations ... ‐ Farm‐out planned prior to appraisal drilling ‐ Two appraisal sites selected ‐Echidna‐2, positioned down-dip and designed to penetrate and define the OWC ‐ Possible shallower on laps and snot penetratedinEchidna‐1maybeseen in this well ‐ Echidna‐3, designed to penetrate reservoir in an up-dip position on the southern flank of Echidna Development Concept Optimization ...

Current Echidna Development Concept ‐ Looking to take advantage of low utilization rates and falling cost environment for the development, this supports a full field development without using an Early Production System ‐ 3x production wells, utilizing extended reach horizontals (from 5 wells). Estimated costs $90 million per well ‐ 2x injection wells, utilizing combined water and gas injection (from 4 wells). Estimated cost $75 million per well ‐ Leased FPSO: suitable FPSO’s identified which require limited investment. OPEX estimate $350,000 per day. ‐ Targeted peak production ~30 kbop [Jared Yamin, Energy Analytics Institute, 3.Apr.2017]

PETROBRAS AND EMBRAER TEAM UP Strict safety standards in operations characterize both the oil and gas industry and the aviation one. A collaboration signed with Embraer with Petrobras aiming to bring to the oil and gas industry the learning made in the aeronautical sector has already been showing results, promoting progress related to submarine well safety. The gains made with the collaboration were presented to guest offshore operators and representatives of the International Association of Drilling Companies (IADC) on May 5, 2017 in Houston, after the Offshore Technology Conference (OTC).

Among the innovations that have been developed is the review and improvement of the SPM-type valve design, made by a BOP (Blow-Out Preventer) manufacturer, which is already available on the market. The new valve leads to increased reliability, ensuring fewer BOP failures, increasing operating safety, and reducing the likelihood of project delays.

Other project results include improvements in the Safety Index calculations (likelihood of completing the well phase without a BOP failure) and system reliability in drilling and completion activities; identifying the most critical component to increase BOP system reliability, and pinpointing opportunities and conceptual design developments for a new regulating valve with a focus on reliability.

The project was signed during the OTC in 2014, and focused on the first phase of the BOP, a device responsible for making sure oil wells are sealed, thus preventing leaks.

Safety valves Petrobras also presented its main initiatives in progress related to subsurface safety valves (SSSV) to guest offshore operators. These initiatives use the learning made in the project with Embraer and continue the effort to increase critical system reliability and safety in the construction and operation of submarine wells. By increasing safety valve reliability, it will be possible not only to boost the overall level of well safety and integrity, but also to reduce costs with interventions to correct faults. We seek to encourage industry participation in these initiatives and to foment the creation of others with the same objective.

[Petrobras, 11.May.2017]

PETROBRAS HIGHLIGHTS AT OTC 2017 Petrobras CEO Pedro Parente delivered the lecture “Petrobras’ Opportunities in a new oil and gas scenario” on May 2, 2017 at the Offshore Technology Conference (OTC), in Houston (USA). He highlighted the company’s gradual financial recovery after the implementation of the 2017-2021 Strategic and Business Plan.

“We came out of an extremely high debt, more than five times our cash generation, and reached 3.5x in 2016. It is still a high debt, thus our efforts to achieve the target of 2.5x in 2018, pursuant to our BMP,” said Parente. He also spoke about the drop in the Reportable Accident Rate (RAR), from 2.2, in 2015, to 1.6 in 2016.

In addition to outlining a panorama since his arrival at the company, last May, the executive discussed the prospects for Petrobras, which has adopted a robust partner program.

“We are adopting a new strategy, creating opportunities for both industry operators and suppliers, and expanding partnerships with universities and research institutions,” pointed out Parente. The executive says that the agreements enable cutting-edge technological development with lower costs and higher growth in production.

The CEO noted that Petrobras expects to soon introduce a new divestment portfolio. Parente reaffirmed the $21 billion target for divestments and partnerships in 2017 and 2018.

“Our initiatives are moving towards increased company efficiency and competitiveness in the global oil and gas market,” he added.

[Petrobras, 3.May.2017]

PETROBRAS DENIES PARTNERSHIPS WITH EXXON Petrobras, in relation to news released through the press, affirms that there are no negotiations in progress for partnerships with the North American company Exxon Mobil.

[Petrobras, 4.Apr.2017]

PETROBRAS SAYS P-69 ARRIVES IN BRAZIL On March 28, 2017 the hull of floating production, storage, and offloading vessel (FPSO) P-69 arrived at the Brasfels shipyard in Angra dos Reis, in the state of Rio de Janeiro. This shipyard will do the platform’s integration work, encompassing the installation of modules on the hull, the interconnection of all equipment, and the commissioning of operating systems (a series of tests to check whether the systems have turned out as planned and are able to function properly). Each of the platform’s 18 modules has a specific function, such as generating power, supplying, and treating water, producing oil, and offloading gas.

The hull is 288 meters long, 54 meters wide, and 31.5 meters tall (from the bottom of its tanks to the main deck). It was built at the Cosco shipyard in Zhoushan, China. After it has been integrated, the platform will be capable of processing 150,000 barrels of oil and 6 million cubic meters of natural gas per day. Able to store 1.6 million barrels of oil, it will operate at a water depth of 2,200 meters.

P-69 will be installed in Lula field, in the Far South Lula module, in the Santos Basin pre-salt. This field is operated and 65% owned by Petrobras, in partnership with Royal Dutch Shell plc subsidiary BG E&P Brasil (25% WI) and Petrogal Brasil (10% WI). Start up is scheduled for 2018.

[Petrobras, 30.Mar.2017]

COLOMBIA ECOPETROL ANNOUNCES SANTANDER DISCOVERY Ecopetrol S.A. reported the Boranda-1 well discovered the presence of crude in the Magdalena Middle Valley, municipality of Rionegro, department of Santander.

The Boranda-1 well was at a depth of 3,657 meters, where the discovery of medium crude (20Âş API) was confirmed in the Esmeraldas formation, in four intervals of oil sands with a total thickness of 40 meters.

Boranda-1 is operated by Parex, with an interest of 50%, while Ecopetrol holds the other 50 percent.

The nearby crude receiving stations (Payoa at 30 km; Provincia at 40 km) and the Barrancabermeja refinery (90 km) afford it a competitive and operational advantage.

This new discovery forms part of Ecopetrol's strategy. One of its focuses is on exploration in regions near production fields. Boranda is in the production range of the Aullador and Cristalina fields to the southwest, and Pavas-Cachira to the northeast.

Over the past four months the country’s leading company has participated in deep-water discoveries in the Gulf of Mexico, the United States (Warrior) and the Colombian Caribbean (Purple Angel). In addition, its Hocol subsidiary announced the finding of Bullerengue Sur-1.

For 2017, Ecopetrol has an exploration budget of $652 million, with which it will drill 17 wells directly and with partners; six will be drilled offshore, one in the Gulf of Mexico (United States) and the other five in Colombia; the remaining 11 will be in various regions of the country.

[Ecopetrol S.A., 30.Mar.2017]

GUYANA GUYANA’S GOOD FORTUNES COULD CURSE IT Recent success in Guyana’s oil sector could be a wolf in sheep’s clothing.

Guyana doesn’t yet produce oil but in coming years its oil output is expected to surpass that of Peru and Trinidad and Tobago and could approach that of Ecuador, one of two lone OPEC producing countries in South America.

Having the world’s largest oil reserves or the first LNG export terminal in the Americas and gas reserves doesn’t mean all your political, economic, and social problems will be solved. Just ask Venezuela and Trinidad and Tobago respectively. Case studies of both these neighboring countries have shown that not just countries in Africa such as Nigeria are vulnerable to the Dutch Disease even today. A look just at Guyana’s poor Corruption Perceptions Index ranking from Transparency International, much lower the average for the Americas, indicates the government is failing in efforts to tackle corruption. It is hardly likely that Guyana’s faith will change by 2020 when the oil starts flowing the revenues start to climb. What will happen then is almost predictable unless a miracle happens between now and then, which is probably not likely.

[Piero Stewart and Ian Silverman, Energy Analytics Institute, 25.Jun.2017]

COMMISSIONS STUDIES ON NATURAL GAS A desk study to determine the options, cost, economics, impact, and key considerations of transporting and utilizing natural gas from offshore Guyana for electricity generation has been commissioned by the government.

The announcement was made at post-Cabinet press briefing, by Minister of State, Joseph Harmon. The Minister noted the proposal for the study was put forward by the Minister of Public Infrastructure and has received Cabinet’s approval.

Consultancy firm Energy Narrative has already begun the eight-week study which seeks to: – verify natural gas supply projections, – verify natural gas demands projections, – analyze the technical feasibility of the proposed natural gas pipeline, – compare the proposed natural gas pipeline with other transportation media,

– analyze the technical feasibility of existing power generation equipment – integrating new gas fired electricity generation equipment, – analyze the cost to deliver natural gas and estimated impact on electricity prices and prepare the interim report Minister Harmon noted the study costs an estimated $70,000.

Energy Narrative is an experienced company in the energy sector in the Caribbean and understands the challenges of developing natural gas infrastructure, and adapting the electricity sector to accommodate natural gas.

The company has submitted its financial and technical proposals to the government, Minister Harmon noted.

The Minister of Natural Resources, Raphael Trotman recently told the local business community that the government has decided to bring the natural gas to shore.

The latest information from ExxonMobil, which will be producing Guyana’s first oil, quantifies the available natural gas, which was found along with the oil, at around 30-50 million cubic feet per day.

“That amount can provide, if we choose to go in that direction, a 200-megawatt generation plant,” Minister Trotman said.

However, the government is still to decide how this natural gas will be used. The considerations for the use of the gas include generating electricity, and fueling the alumina plant if it is resuscitated or used in industry.

“These are decisions that have to be made including the decision as to where we wish to land the gas if there is going to be a pipeline along the coast whether from Georgetown right up to Crab Island,” Trotman said.

Natural gas, while not green, is cleaner than fossil fuel which is currently consumed for electricity generation in Guyana. Minister Trotman had previously noted that Guyana currently imports some 4.7M barrels of fuel yearly. Using natural gas for energy production could dramatically reduce the country’s fuel bill which is also the largest foreign currency bill, the Minister posited.

The business community has welcomed the possibility of cheaper fuel if natural gas is used to generate energy. Last evening, members of the private sector pointed out that the possibility of cheaper fuel would make many manufacturers and service providers more competitive throughout the Caribbean and elsewhere.

[Tiffny Rhodius, GINA, 27.Apr.2017]

MEXICO

Puerto Progreso martime terminal in Yucatรกn state. Source: Pemex

PEMEX REPORTS ON ACCIDENT INDEX Pemex Exploraciรณn y Producciรณn (PEP) received from the Agency of Safety, Energy and Environment (ASEA), the award for high performance in safety, health and environmental protection, for achieving the lowest accident frequency index in its history in 2016, with 0.25 injuries per million-man hours worked. This figure represents a decrease of 45 percent compared to 2015.

This index was 0.36 for Pemex as a whole, which represents a decrease of 23 percent compared to the previous year, and a reduction of 64 percent regarding the incidence of incapacitating accidents, since the Safety, Health at the Workplace and Environmental Protection System (SSPA), was established 12 years ago.

During the event, which was presided by the Pemex CEO, José Antonio González Anaya, and the executive director of the ASEA, Carlos de Regules, it was highlighted that the SSPA system is the first to be registered before this regulating body. It is a program aligned to the standards of this agency, which all companies in the hydrocarbons sector must apply, in order to be permitted to operate in our country. The strict application of this System also allowed for a reduction in the index of accumulated gravity due to injuries during the previous year.

González Anaya assured Pemex has an absolute commitment to ensuring the safety of its workers to achieve excellence in its operations. He pointed out that these achievements are the result of several years’ efforts, discipline, and responsible work by the Pemex workers during their daily activities.

The main actions carried out in 2016 by the company in this field were the application of the mandate of the SSPA System in all areas of the company, the execution of the Binomial Program (Audit – technical support in the facilities), the implementation of 12 Zero-Tolerance directives that apply to both Pemex and contractor personnel, and the continued execution of diffusion and awareness campaigns in all areas, helping the workers identify and manage their working risks.

Last year, proactive indicators were included to safety and risk management matters. This contributed to the mitigation of all identified critical risks and to the resolution of 95% of the hazard findings identified during the prevention meetings.

Regarding environmental protection, in 2016, 104 clean industry certificates issued by the Profepa and the ASEA were received, of which 25 were granted to facilities for the first time, and 79 were renewed for maintaining or improving their environmental performance. By the end of the year, 445 certified facilities were registered in the National Environmental Auditing Program. Among the commitments for the improvement of its environmental performance, the company has the goal to reduce its carbon dioxide emissions by 30 percent by 2021 and to increase its reuse of water by 45 percent in its refineries by that year.

This event was also attended by the General Secretary of the STPRM, Carlos Romero Deschamps; the CEO of Pemex Exploración y Producción, Javier Hinojosa, and the corporate director of Planning, Coordination and Performance, Rodulfo Figueroa.

[Pemex, 19.May2017]

PEMEX AWARDED BLOCKS IN ROUND 2.1 As part of the strategy to diversify and strengthen its exploration portfolio, Pemex, through the subsidiary productive company Pemex Exploración y Producción (PEP), participated in Round 2.1, which was conducted in an exemplary and transparent fashion by the National Hydrocarbons Commission (CNH).

Because of this bidding process, Pemex was awarded two blocks: Block 2, as a consortium with the German company Deutsche Erdoel AG (DEA), and Block 8, as a consortium with Colombian company Ecopetrol.

In Block 2, Pemex is the operating partner with 70 percent participation. It covers a surface of 549 square kilometers, located in the continental platform of the Tampico-Misantla basin, to the west of the Gulf of Mexico. The submitted bid was 57.92 percent of the State participation value, 1.0 of additional investment factor, and a weighted value of 63.493 of the financial bid.

This joint venture with the DEA will allow Pemex to share risks and experience with a company that has over 100 years in the industry and which has developed operations in the United Kingdom, Norway, Egypt, and Germany, among other countries.

Regarding Block 8, Pemex is the operator with 50 percent participation. This area is in the Southeastern Basins and spans a surface of 586 square kilometers. The bid submitted was 20.10 percent of state participation value, an additional investment factor of 0, and a weighted value of the financial bid of 20.100. With this consortium with Ecopetrol, Pemex is at the beginning of a business relationship with one of the largest Latin American oil companies, with which it shares a strategic alignment.

Due to the closeness of these blocks to assignments Pemex holds in shallow waters, the existing infrastructure will allow for the creation of synergies in exploration and development. The geological conditions and the type of fields expected in these blocks are like those in the areas and fields the company has been exploring for the past 40 years.

These assignments will potentially contribute to the achievement of the reserve incorporation goals of Pemex established in its 2017-2021 Business Plan.

[Pemex, 19.Jun.2017]

WINNERS OF PEMEX PUBLIC AUCTION REVEALED Pemex announced results of the first Open Season Public Auction held by Pemex Logisita for the Baja California and Sonora systems. The tender process carried out by Pemex Logistica in conjunction with the Energy Regulatory Commission was a success. In all, twenty-two companies submitted bids and seven posted bonds. The winner was the US company Tesoro. This tender serves to demonstrate the confidence of private companies have in the tender process.

Bidders submitted bids for all the capacities offered, both in the area of pipeline shipments and storage.

Tesoro was awarded a three-year contract at the assigned capacity at rates above the minimums set by Pemex. In both systems, the total assigned capacity, complemented by that of Pemex, is sufficient to cover the needs of the respective markets.

These procedures establish the foundation for open, non-discriminatory access to Pemex’s pipeline and storage infrastructures. Likewise, these public auctions provide greater certainty to importers and sellers, as well as to other actors in the logistical chain in the petroleum market.

In line with the objectives of the Energy Reform Act, an important step was taken in the creation of an efficient, stable, and competitive market in Mexico benefiting the consumer, who will be able to take advantage of a diversified fuel market.

Pemex reiterates its commitment to its clients as the emblematic company of Mexico.

The assigned capacities in the Baja California system are as follows: Storage Terminal

Assigned Capacity

Rosarito Mexicali Ensenada

155,281 bbls 8,997 bbls 16,628 bbls

Source: PEMEX

Pipelne Shipment

Assigned Capacity

Rosarito-Mexicali Rosarito-Ensenada

2,300 b/d 2,350 b/d

Source: PEMEX In the Sonora system, the assigned capacities are as follows: Storage Terminal

Assigned Capacity

Guaymas Ciudad Obreg贸n Hermosillo Magdalena Nogales Navojoa

108,377 bbls 7,814 bbls 7,479 bbls 2,784 bbls 11,534 bbls 1,785 bbls

Source: PEMEX

Pipeline Shipment

Assigned Capacity

Guaymas-Hermosillo Guaymas-Ciudad Obreg贸n

2,571 b/d 2,314 b/d

Source: PEMEX [Pemex, 2.May.2017]

PEMEX BOARD APPROVES NEW FARM OUT The Board of Directors of Pemex authorized to send the request for the migration to a joint venture for the exploration and extraction in the Nobilis-Maximino Block, which is in ultra-deep waters around the Cintur贸n Plegado Perdido in the Gulf of Mexico. This request is in line with the strategy defined by Pemex in its 2017-2021 Business Plan, of entering into joint ventures that will allow for the sharing of financial, technological, and geological risks, to complement its operating capabilities and consolidate itself as a competitive company.

Located 230 kilometers off the Tamaulipas coastline and 15 kilometers off the maritime border with the United States, this block contains total 3P reserves that are estimated at 500 million barrels of crude oil equivalent (mmbpce). Furthermore, it is estimated to hold a reserve of around 250 mmbpce, to be incorporated. With a depth of between 2,900 and 3,100 meters, it covers a total area of 1,524 square kilometers. Formed by the Maximino and Nobilis fields, which were discovered by Pemex in 2013 and 2016, respectively, it has a total of five wells (three in Maximino and two in Nobilis). Its proximity to the Trion block represents an advantage for future operating synergies.

Should the new fields be consolidated in the area, Pemex estimates that a daily production of 300 thousand barrels of crude oil equivalent may be reached in the next 8 years. Additionally, to the incremental production, the development of these fields will help to reduce the future costs of exploration and extraction in the province of Cintur贸n Plegado Perdido.

This new farm out process will be performed through the National Hydrocarbons Commission, with the transparency and competitiveness that have characterized the various bidding rounds of the federal government, which have been recognized worldwide. Thus, Pemex continues taking advantage of the flexibility and advantages granted by the Energy Reform promoted by President PeĂąa Nieto and approved by Congress towards the end of 2013.

On the other hand, the Board approved the participation of Pemex in bidding round 2.1 for shallow waters, in the Basins of the Southeast, in the Tampico Misantla Basins and in Veracruz, in those blocks that are of interest to the company, and which comply with the profitability criteria outlined in the Business Plan. To this end, Pemex will seek to establish joint ventures with oil companies to submit joint proposals.

The winners of this bidding process, which is carried out by the CNH, will be announced on June 19, according to the schedule established by this regulation body.

[Pemex, 27.Apr.2017]

SERVICE STATION IRREGULARITIES DETECTED The Ministry of Finance and Public Credit, through the Tax Administration Service (SAT) and the Financial Intelligence Unit, the Office of the Attorney General and Pemex, perform an operation to suspend the activities of six service stations that allegedly have shown irregularities in fuel sales and service, in addition to various tax irregularities.

These service stations are in various municipalities of the state of Puebla. The operation had full support from the State government at all times.

The purpose is to provide certainty to consumers of the fuels sold by Pemex through its franchises, as well as to fight the illegal fuel market, tax evasion, money laundering and commercial fraud.

The Mexican Ministry of Defense, the National Security Commission through the Federal Police, and the State Police provided the necessary support to ensure the safety of the personnel throughout the operation, whilst respecting human rights at all times.

This operation is the result of the inter-institutional cooperation and adds itself to the one executed last February in various states of the country. The Government of the Republic will continue working to fight the illegal sale of oil products, which strongly affects the community and national finances.

Therefore, we request the support of the general public through the anonymous reporting of irregularities and criminal conduct to the following numbers and emails.

Litros de a litro (Liter liters). PROFECO 55 68 87 22, Mexico City and metropolitan area.

01 800 468 87 22, long distance, free of charge from the rest of the country.

Illegal Tapping. Pemex 01 800 228 96 60 vigilante@pemex.com

Criminal conduct. Federal Police 088 or 01 800 440 36 90 ceac@cns.gob.mx

All consumers who are affected by the closing of these service stations, are invited to view the Pemex Guide (www.guiapemex.com), where they may locate the closest service station to buy fuel.

[Pemex, 18.Apr.2017]

PEMEX COMMITTED TO DEVELOPMENT IN TABASCO Pemex CEO José Antonio González Anaya highlighted the commitment of the state productive company to boost the economic reinvigoration of the oil production state. He pointed out that in responding to presidential instructions, Pemex has carried out various actions in support of local businesses and the economy of the region.

During the session of the Follow-Up Council for Economic Reactivation and Productive Development of Tabasco, which was presided by the Minister of Finance and Public Credit, José Antonio Meade, and the Governor of the State, Arturo Núñez Jiménez, González Anaya reported that during 2016 all the debts with 549 suppliers from Tabasco were paid in full. The total amount was of almost 34 billion pesos, thus solving the liquidity problem they were facing. During the first quarter of the year, Pemex has paid almost 9 billion pesos to 279 suppliers and there are scheduled payments for an additional 3.4 billion that will benefit 190 suppliers during 2017.

The support of the suppliers will also continue this year, through promoting the Productive Chains scheme of Nacional Financiera, which seeks to contribute improvements for the development of SMEs, as well as offering immediate liquidity through electronic factoring operations on a banking platform.

One of the measures to bolster small local businesses is that of non-consolidated contracting, which have aided their participation in bidding processes for the purchase and acquisition of goods and services.

During the previous year, 26 contracts to projects in the municipalities of La Venta, Macuspana and Villahermosa were entered under this scheme, for amount more than 100 million pesos. This year, the participation of local suppliers in these bids will be promoted, to reactivate the economy of Tabasco.

On the other hand, of the 204 billion pesos of Pemex’ investment budget for this year, 20 percent has been assigned to projects that affect the State of Tabasco. These projects include drilling, maintenance and repair work on wells, ducts, and safety systems, as well as maintenance of the facilities. The portfolio includes investments in the production fields Chuc, Grijalva River Delta, Bellota-Chinchorro, Light Marine Crude Oil, Antonio J. Bermúdez, Jujo-Tecominoacán and Ogarrio-Sánchez Magallanes, among others.

In matters of social responsibility, Pemex develops various projects in Tabasco, for nearly 350 million pesos, which seek to improve the quality of life and reconcile economic growth with the well-being of the communities, such as the building and improvement of educational spaces, support of productive projects, community diners, and promoting environmental protection.

[Pemex, 7.Apr.2017]

PERU

Oleoducto Nor Peruano. Source: PetroPeru

KAROON SAYS OPS IN FORCE MAJEURE Karoon Gas Australia Ltd.announced its operations in the Tumbes Basin in Peru were currently in force majeure, reported the company in a corporate presentation on 13 February 2017.

Highlights from the presentation follow: Peru: Tumbes Basin ... ‐ KAR 75% (Operator), Pitkin 25% ‐ Proven hydrocarbon basin with large prospects well defined by 3D seismic and attribute analysis ‐ Drop cores show significant oil seeps

‐ Falling rig rates are likely to reduce the cost of drilling, increasing the interest in the area for farm‐out ‐ Marina, 240 MMbbls and Bonito, 415 MMbbls unrisked net best estimate prospective resource* ‐ New prosectivity evident through new seismic work streams ‐ Farm‐out discussions continue ‐ Currently in force majeure Z‐38: New Data Supports Prospectivity ...

Detailed mapping and seismic pore‐fill attribute extraction strongly support the presence of trapped hydrocarbons ‐ Reservoirs are stacked, ponded turbidite sands ‐ Trap also appears to have some stratigraphic controls consistent with the depositional model ‐ Conformance of anomalies with mapped contours could indicate oil-water contacts ‐ New prospectivity to be independently assessed when technical work complete Z‐38: New Data Supports Additional Prospectivity …

- New seismic work has identified multiple new leads at the Mal Pelolevel - New data: Work program focused on seismic attribute analysis over the last 12 months [Jared Yamin, Energy Analytics Institute, 3.Apr.2017] SUBSCRIBE TO THE LATAM NRG BRIEF

CONTACT US FOR PRICING DETAILS AT energy-analytics-institute@hotmail.com

TRINIDAD

Dock in Trinidad and Tobago. Source: Petrotrin

PETROTRIN OUTPUT UP THROUGH APRIL 2017 Petrotrin’s production of crude oil reached 46,000 barrels per day (b/d) in April 2017 compared to 41,000 b/d in December 2016, announced the company’s president during a luncheon in Trinidad and Tobago.

“Our refinery throughput as of December 2016 is 158,000 barrels per day, taking refining back to heyday production levels,” said Petrotrin President Fitzroy Harewood. “If we can increase and sustain our refinery utilization rates then we have a chance of sustaining our business,” he said.

Petrotrin makes its profit from refinery margins influenced by its throughput and utilization levels and by product spreads, he added.

The company continues to explore opportunities for downstream partnerships.

“Guyana's market presents an opportunity for us,” concluded Harewood.

[Jared Yamin, Energy Analytics Institute, 10.May.2017]

BP’S BERNARD LOONEY OFFERS BPTT UPDATE Minister Franklin Khan, Minister Stuart Young, Minister Colm Imbert, Mr. Wendell Mottley, senior publicsector officials, leaders from the local energy sector, key project stakeholders, members of the media – good afternoon, announced BP Chief Executive, Upstream, Bernard Looney.

It is very exciting to be here to reaffirm BP’s commitment to Trinidad and Tobago and to celebrate what we have recently achieved together, said Looney during his update on BPTT’s developments and exploration at the Trinidad Hilton and Conference Centre. What follows is his speech on that occasion.

I will briefly speak about three things: 1. Celebrating recent successes; 2. what these mean for the country and to BP, and; 3. the current business context.

Celebrating recent successes Firstly – it’s about celebrating recent successes. We are here to celebrate many successes, five of which are: i. the completion of gas contract negotiations with the National Gas Company (NGC); ii. the longawaited sanction of the Angelin project by BP largely supported by the successful negotiations; iii. the safe start-up of two projects – Sercan II with our partner EOG and the Trinidad Offshore Compression project (TROC); iv. the imminent start-up of the Juniper project, and; v. hot off the press, I am extremely happy to announce that we have found gas in commercial quantities in our two exploration wells – Savannah and Macadamia.

The results of these exploration wells have unlocked approximately 2 tcf (trillion cubic feet) of gas to underpin new developments in these areas.

The Savannah exploration well was drilled into an untested fault block east of the Juniper field in water depths of over 500 feet. Based on the success of the Savannah well, bpTT is expecting to develop these reservoirs via future tie-back to the Juniper platform.

The Macadamia well was drilled to test exploration and appraisal segments below the existing South East Queen’s Beach (SEQB) discovery which sits 10km south of the producing Cashima field. This new discovery in the Macadamia well combined with the existing shallow SEQB gas reservoirs, is expected to support a new platform within the post-2020 timeframe.

These were the first exploration wells drilled by BP in Trinidad in a decade. The discoveries mark the start of a rejuvenated exploration program on the Trinidad shelf with a further three exploration wells to be drilled.

We certainly have a lot to be proud of.

I would however like to echo Norm’s sentiments that we could not be celebrating if the projects were not delivered safely.

Congratulations and thanks to all involved in the safe completion of these key projects and business activities.

We are grateful to all of you, including the government, the National Gas Company, our business partners, contractors, suppliers, and other stakeholders from across the industry. Thank you.

Country and company Secondly – what does this mean for the country and for BP? These accomplishments are hugely important to BP, and to Trinidad and Tobago.

Meeting our commitments is something BP takes very seriously. TROC and Juniper are two out of seven major projects which BP promised our shareholders to start up in 2017. This highlights how vital our Trinidad operations are to BP in meeting our investor commitments and reinforcing market confidence.

The gas produced from Trinidad is key to BP delivering on our commitment to provide 800 thousand barrels per day of new production by 2020.

Production from Trinidad will account for approximately 20% of BP’s growth in its upstream segment over the next four to five years.

And more importantly, for the country, the increased production volumes also mean that we are doing our part to close the gas supply/demand gap which has been a major challenge for the industry here in Trinidad over the past several years.

In the short term, the start-up of Juniper, TROC and Sercan II will greatly assist us in meeting our nearterm production goals and help to alleviate gas shortages.

In the medium term, the sanction of Angelin ensures that we can maintain production levels past 2019.

In the longer-term, the success of the Macadamia and Savannah exploration wells underpins two new field developments post 2021.

And, the gas contract negotiations help improve the financial frame of our business in Trinidad and underpin future investments.

Business context Thirdly, a few words about the external environment – the environment we all work in. While it is great to have confidence in the future, we must be very aware of the extremely challenging times we face – with energy prices below pre-2014 levels.

This has an impact on our revenues and those of the country. Prices have been reset and we should reset our expectations accordingly. We all must work harder at managing costs, finding efficiencies, and collaborating more, if we are to continue to be successful in this new energy world.

And while these new projects and gas discoveries will go a long way to alleviating the gas supply challenges, we know they will not fully solve the issues.

There is still work to be done to ensure we can fully reap the benefits of these new opportunities and we need to work together to ensure the gas remains as competitive as it can be.

Close In closing, we should all be extremely proud of delivering these key milestones; it is an affirmation that BP remains committed to Trinidad and Tobago for the long term.

Finally, let me again say a big thank you to the government and all stakeholders for your partnership, cooperation, and friendship. I look forward to Trinidad and Tobago remaining the flagship business that it has been for the past 55 years.

[BPTT, 1.Jun.2017]

BP TRINIDAD MAKES GAS DISCOVERIES BP Trinidad and Tobago (BPTT) made two significant gas discoveries with the Savannah and Macadamia exploration wells, offshore Trinidad. The results of these wells have unlocked approximately 2 trillion cubic feet (tcf) of gas in place to underpin new developments in these areas.

The Savannah exploration well was drilled into an untested fault block east of the Juniper field in water depths of over 500 feet, approximately 80-kilometers off the south-east coast of Trinidad. The well was drilled using a semi-submersible rig and penetrated hydrocarbon-bearing reservoirs in two main intervals with approximately 650 feet net pay. Based on the success of the Savannah well, BPTT expects to develop these reservoirs via future tieback to the Juniper platform that is due to come online mid-2017.

The Macadamia well was drilled to test exploration and appraisal segments below the existing SEQB discovery which sits 10 kilometers south of the producing Cashima field. The well penetrated hydrocarbon-bearing reservoirs in seven intervals with approximately 600 feet net pay. Combined with the shallow SEQB gas reservoirs, the Macadamia discovery is expected to support a new platform within the post-2020 timeframe.

“This is exciting news for both BPTT and the industry, as these discoveries are the start of a rejuvenated exploration program on the Trinidad shelf,” said Norman Christie, Regional President for BPTT. “We are starting to see the benefits of the significant investment we have made in seismic processing and Ocean Bottom Seismic acquisition. Savannah and Macadamia demonstrate that with the right technology we can continue to uncover the full potential of the Columbus Basin. This is a testament to BPTT’s ongoing commitment to the development of our Trinidad and Tobago operations and the wider industry, and we look forward to the future portfolio drill-out.”

BP Trinidad and Tobago has a 100 percent working interest in Savannah and Macadamia.

[BPTT, 1.Jun.2017]

BPTT’S ANGELIN PROJECT GETS THE GREEN LIGHT BP Trinidad and Tobago LLC announced sanction for the development of its Angelin offshore gas project.

The project will feature the construction of a new platform - bpTT’s 15th offshore production facility - 60 kilometers off the south-east coast of Trinidad in water-depth of approximately 65 meters.

The development will include four wells and will have a production capacity of approximately 600 million standard cubic feet of gas a day (mmscfd). Gas from Angelin will flow to the Serrette platform hub via a new 21-kilometer pipeline.

Drilling is due to commence in Q3:18 and first gas from the facility is expected in 1Q:19.

BPTT operates in 904,000 acres off Trinidad’s east coast. BPTT has 14 offshore platforms and two onshore processing facilities. BPTT is 70 per cent owned by BP and 30 per cent owned by Repsol.

BPTT Regional President Norman Christie said: “We are pleased to be able to announce the sanction of the Angelin project which was made possible due to the execution of a new gas sales contract with the National Gas Company. Successful completion of these negotiations was important not only to the sanction of Angelin but will also underpin a further $5-$6 billion in potential future investments over the next five years. These investments are important to increasing indigenous national gas production and bringing more stability to gas supply to the downstream and Atlantic.”

Christie also thanked NGC for its role in facilitating the negotiations: “I would like to recognize NGC for the spirit of cooperation they brought to the negotiating table and working to ensure that the new agreement would benefit the entire gas value chain.�

Angelin was originally discovered by the El Diablo well in 1995 and appraised by the La Novia well in 2006.

[BPTT, 1.Jun.2017]

ANGELIN DECISION TO ENSURE GAS SUPPLY All responsible stakeholders in the country must be disappointed by the decision not to construct the Angelin platform in La Brea. However, this decision has been driven by the need to ensure that natural gas is available in Trinidad & Tobago by early 2019. There are clear concerns that any interruptions to project delivery, whether due to labor unrest or other factors, would have serious implications for bpTT, the National Gas Company and the downstream processors and users of natural gas. This in turn would have serious implications for the overall national economy.

This decision highlights to urgent need for Trinidad and Tobago to improve productivity. Within the energy-related construction sector, many companies report that productivity levels have dropped over recent years not least due to high rates of absenteeism and protests. At the same time, demands for wage increases have continued, meaning that companies have become less competitive compared to companies operating in the United States, Mexico and elsewhere. This reality highlights the need for serious reforms to our industrial relations framework and improvements to work ethic and productivity.

Platform construction is only one portion of the overall delivery of a major offshore gas development.

Other opportunities for local content also exist in the drilling, installation, and commissioning phases of the Angelin project and the Energy Chamber will continue to work with bpTT and other stakeholders to increase local content in the overall project.

[The Energy Chamber of Trinidad & Tobago, 12.Apr.2017]

VENEZUELA

Venezuelan oil workers. Source: PDVSA

NATIONALIZATIONS WITHOUT COMPENSATION Venezuela’s oil sector remains in the dumps to say the least. The OPEC country’s investment pool of small-to-large capped services companies, integrated majors and national oil companies has dwindled to just a handful, if that many. That’s why recent comments by constitutional lawyer and candidate to the Constituent Assembly, Hermann Escarra, make no sense what so ever. At least not to me.

The current scenarios facing PDVSA and the Venezuelan petroleum sector are unfortunate, self-inflicting and have only worsened over the years including -- financial mismanagement, a brain-drain of talent, investments in sectors not related to the oil and gas, unnecessary indebtedness at the state entity PDVSA, excess political influences in the oil sector and at the state company, the stand-and-wait attitude of petroleum sector investors, nationalizations without proper compensation, among others.

These ills have produced a collapse in oil production, the life-line of this oil obsessed and dependent nation of nearly 30 million people. Let’s not forget the lingering economic, political, and humanitarian crises in the country with the world’s high inflation and homicide rates that keep Venezuela at the top of that ranking as well.

The latter point is one that has burnt Venezuela in the not so distance past. Just about a decade ago late populist Venezuelan President Hugo Chavez announced results of a long drawn out migration process that saw many companies in disagreement with proposals from the government and many more countless asset nationalizations or expropriations. ExxonMobil and ConocoPhillips always come to mind first just for their mere size in terms of assets and revenues and the goodwill value of what their presence in Venezuela or any emerging country potentially tells about the healthiness and attractiveness of a country’s petroleum sector and the opportunities that must exist. It’s no secret that the integrated majors including the prior two as well as Chevron, Repsol, Statoil, and Shell, among others, like to look for the elephant fields. In Venezuela, there’s a hell of a non-conventional elephant field located in the Hugo Chavez Orinoco Heavy Oil Belt, also known as the Faja. For the matter, the still prolific and reserve bearing Lake Maracaibo offers numerous conventional opportunities in relative shallow waters. Offshore Venezuela the natural gas opportunities are just as enticing, but that’s another story all together since foreign partners are still allowed to have a majority stake in the country’s gas ventures. Por ahora!

Venezuela’s oil sector was nationalized in 1976. PDVSA emerged from that process. The so-called nationalizations under the presidency of Chavez during the period dubbed 21 st Century Socialism called for PDVSA to assume a majority stake in oil related joint ventures whereby the company was a minority partner. What nationalizations Mr. Escarra is referring to remain a mystery but PDVSA has already emitted an official statement dismissing his comments.

Escarra’s comments or not, the thought of uttering the word nationalization to investors in a country on the brink of a financial collapse, among others, is worrisome. The word triggers fear many investors have already experienced and many have no decent words to say about the process, having lost assets, their livelihoods and many of them still holding their breathe in hopes of a payment check arriving someday.

Sadly, that day may never happen. Any future nationalizations without compensation will translate into no future foreign investments for a long time. Just looking back over the last decade, we can see what bad effects a nationalization process gone wrong can have on an oil sector and a country.

[Pietro Donatello Pitts, Energy Analytics Institute, 10.Jul.2017]

VENEZUELA AND TRINIDAD SIGN GAS, LNG DEAL Eighteen years after Trinidad and Tobago starting shipping liquefied natural gas, Venezuela is finally close to doing the same. Well it’s not quite ‘game on’ yet and at least not for now.

Venezuela and Trinidad recently signed an agreement that could finally see Venezuela export its massive natural gas resources located off its eastern coast. The catch: it will initially have to use the infrastructure of its smaller twin-island nation neighbor, which in 1999 beat Venezuela to the punch in terms of constructing the first LNG exporting terminal in the Latin America and Caribbean region.

Nonetheless, Venezuela inched even closer to fulfilling its long-time goal to commercialize its massive gas resources which totaled 201.349 trillion cubic feet (Tcf) at year-end 2015, the last year state oil company PDVSA released official data. Of that figure, approximately 50 percent was associated with crude oil and the other non-associated.

The gas supply deal -- signed in Caracas by Venezuela’s Petroleum Minister Nelson Martínez and Trinidad’s minister in the Office of the Prime Minister and Office of the Attorney General Stuart Young -includes construction, operation and maintenance of gas pipeline that will span 30 kilometers from Venezuela’s Dragón Field to Trinidad’s Hibiscus Field, reported Venezuela’s Petroleum Ministry in an official statement. The project also contemplates connection with the Hibiscus-Lisas gas pipeline, and supplying Venezuelan gas to Trinidad for domestic usage as well as supplying a LNG plant for commercialization in international markets.

“This is an agreement where the parts have a clearly defined compromise and objective,” reported the ministry, citing Martínez. “In the case of Venezuela, the Dragón Field project has interesting perspectives and can generate gas for the [Venezuelan] internal market and for export.”

The deal will benefit three companies: PDVSA as well as the National Gas Company of Trinidad and Tobago (NGC) and Shell via a Special Purpose Vehicle or SPV conformed of the two Trinidadian companies, the ministry reported.

HISTORIC AGREEEMENT The initial agreement will allow the companies to leverage use of existing infrastructure already in place on the Trinidad side of the maritime border that separates the two Caribbean nations, advance negotiations and identify the best conditions for the companies and the project.

The historic agreement pretends to boost trade and unity between Trinidad and Venezuela and should for this reason be of interest to countries in Latin America and the Caribbean region as it stands to better relations with CARICOM countries since it advances the vision of an integrated Caribbean region. The deal comes at a time when Trinidad’s declining gas reserves are failing to produce sufficient supply to cover the nation’s gas demands, and cash flow problems in Venezuela have pushed this nation to the brink of a major financial default.

“We are very close to achieving our objectives and we can continue to strengthen relations not only in the energy area but also in education and cultural,” said Young.

Venezuela -- the country with the world’s largest oil reserves and eighty largest gas reserves – continues to suffer a corruption and revenue mismanagement induced economic crisis that was already present when oil prices started their decline nearly three years ago. The country, which relies on its oil sector to generate 96 percent of its foreign export earnings, is looking to boost production of non-associated gas to supply its domestic market and reduce the use of fuel imports to generate energy and for export to diversity its foreign export revenue matrix.

Oil companies from the U.S.’ Chevron Corporation to France’s Total have reduced investments to a minimum in Venezuela’s oil sector due to issues ranging from late payments from PDVSA to continuous changes to the rules of the game, and where PDVSA is stipulated by law to have a controlling interest in all projects. Despite the issues facing Venezuela’s oil sector, the same faith has not stopped investment flows into the offshore gas projects where foreign companies can still retain a controlling interest in the projects. One needs to look no further that the Cardon IV offshore natural gas project which starting production in 2015 and which partners Italy’s Eni and Spain’s Repsol. PDVSA has a right to back-in to the project but has yet to exercise the option owing to a lack of cash.

Venezuela’s Information Ministry, the clearing house for all questions regarding the country, and media officials at PDVSA didn’t immediately reply to an e-mail request for comments about the Cardon IV, Mariscal Sucre or Deltana Platform offshore gas projects or the agreements with Trinidad and Tobago.

MISSED OPPORTUNITY Venezuela’s plans to export gas have been a long time coming and especially when one considers the initial plans for a gas project in the 1990s dubbed the Cristobal Colon project, which was under study by the then Lagoven, Shell, Exxon, and Mitsubishi as a potential LNG export project for gas produced from Venezuela’s offshore Sucre state.

Twelve years ago, Shell Venezuela S.A. (SVSA) was slated to develop two offshore gas fields in conjunction with PDVSA and Mitsubishi Corporation as part of greater Mariscal Sucre Liquefied Natural Gas (MSLNG) project in Venezuela. However, the then president of Venezuela, Hugo Chavez Frias, announced that PDVSA would develop the fields on its own, pushing Shell Venezuela out of the project.

Chavez, who had announced he would recoup Venezuela’s oil sovereignty, also had other ideas for Venezuela’s gas reserves. Back then, Chavez created a major buzz in the region with his idea to build a massive Great South American Pipeline that would span from Venezuela to Brazil to Argentina. With an estimated price tag of $15-$20 billion, that project idea was soon relished to just that, an idea.

Fast forward to today and Venezuela -- home to looting induced by scarcities of essential medicines and basic foodstuffs from water to milk, and the world’s highest inflation -- is finally just about ready to export its initial gas molecules. Initial gas production offshore Venezuela commenced in 2015 at the Cardon IV project. That coupled with future production from the Mariscal Sucre and Deltana Platform projects is expected to boost the country’s gas production, help it alleviate a long-running gas deficit in the highly industrialized western region and allow for a ramp-up in gas exports. The latter will be achieved initially with Trinidad’s existing infrastructure and someday via the CIGMA LNG plant in Guiria, Venezuela.

WIN-WIN The new gas deal falls under guidelines set forth by Venezuelan President Nicolás Maduro who assured that his country was “working on its border politics, with gas blocks, and reaching agreements that were a win-win for both countries.”

Still, widespread uncertainties continue in Venezuela related to the longevity of the current government and the future of this energy-rich country should it finally seek financial assistance from international agencies. Likewise, it is still unclear the extent to how the current opposition controlled National Assembly will view this deal and others like it signed by the administration of Maduro should a regime change final come.

Trinidad has stepped up to the plate in recent years during Venezuela’s varied crises when other countries have shied away for whatever reasons, and offered widespread expertise to Guyana to assist that small country develop and commercialize its recent oil discoveries in a region disputed by Venezuela as its own. Just how long the good times will last between Trinidad and Venezuela is anyone’s guess.

But, operational issues must be considered as well. How quickly can Venezuela ramp up production offshore in its eastern region? Will Trinidad’s demand in the internal market consume most of its Venezuelan gas imports and thus reduce potential gas for export in the form of LNG? These and other lingering questions specific to Venezuela under Chavez and now Maduro should provoke any number of emotions among investors ranging from happiness to uncertainty even when there appears to be light at the end of the tunnel.

[Pietro Donatello Pitts, Energy Analytics Institute, 4.Jun.2017]

ENERGY COMPANIES TO DELAY OIL INVESTMENTS Venezuela’s current political situation is causing alarm among investors which has been reflected mostly in the behavior of the country’s bonds.

Not surprisingly, oil companies will likely postpone investments in Venezuela amid an institutional crisis and continued uncertainties surrounding petroleum deals signed with the government of President Nicolas Maduro without the approval of the country’s National Assembly, said Ecoanalítica Director Alejandro Grisanti in Caracas during an interview broadcast on Globovision television.

Deadly protests accompanied in some cases by looting have erupted across the country due to two new political developments. The first relates to a decision by the Venezuelan government to ban leading opposition leader Henrique Capriles from public office for 15 years. The second relates to a call last month by opposition lawmakers to Maduro to remove Supreme Court judges after they announced a decision to invalidate the country’s National Assembly. The international commotion caused by the decision lead the judges to partially reverse their decision which was deemed a major blow to democracy in the country and called a coup by opposition leaders.

Despite the reversal of the court decision, Maduro did gain the upper hand in striking oil and gas deals with international companies since he can now sign deals without congressional approval.

“It is very possible that the majority of the petroleum companies will pretend not to know what is going on and postpone current investments or other investments that they intended to make in Venezuela,” said Grisanti, an economist and former head of research and strategy in Latin America for Barclays Capital in New York.

If changes come to Venezuela, these investments will not be recognized since they had to be approved by the National Assembly, said Grisanti. At the end of the day, they [investors] are making decisions at their own risks, he said.

“Why would they want to assume this risk during this fragile situation,” he said, referring to oil and gas companies with operations and/or interest in Venezuela’s petroleum sector.

Despite recent bond payments, many Venezuelan economist believe the country’s oil production is likely to continue falling this year amid ongoing political and economic uncertainties and weak commodity prices as petroleum companies continue to take a wait-and-see attitude regarding major multi-billion investment projects.

[Pietro Donatello Pitts, Energy Analytics Institute, 17.Apr.2017]

DEL PINO’S REPLACEMENT: NELSON MARTÍNEZ Venezuela’s newly appointed Oil Minister Nelson Martínez could be next in line to head state oil company PDVSA as the shakeup in Venezuela’s oil sector continues.

Rumors have circulated since early this year about Martínez eventually replacing current PDVSA President Eulogio Del Pino given the formers business and financial connections in the U.S. and around the world and the latter’s perceived inability to impress massive factions within the socialist government of Venezuelan President Nicolas Maduro, for any number of reasons.

Martínez, who served since 2013 as the President and Chief Executive Officer of Houston-based Citgo Petroleum and who Maduro named as Venezuela’s new oil minister in early-January, is the likely choice to head up PDVSA, sources in the oil sector say. Martínez has a long work history with PDVSA where he started his career in 1980 at Intevep, the research and development arm of the state company. He has worked with the company in countries from the U.K. to Argentina in differing roles ranging from exploration to trade and supply, according to data on Citgo’s website.

Del Pino, who received a master’s degree in exploration from Stanford University, is a technical figurehead within PDVSA and the Venezuelan oil sector. However, he lacks the ability to procure critical financing needed first to assist Venezuela stay current on its principal and interest payments on its dollardenominated bonds, and second to attract investments to the capital intense oil sector in Venezuela where the country’s infrastructure is fragile and in decay while its refining sector continues to operate in the red.

Against a backdrop of weak oil prices, Maduro’s political agenda as well as a continued economic and humanitarian crisis in Venezuela have indirectly prevented Del Pino from focusing his greater efforts on shoring up Venezuela’s oil production. Oil production under his leadership as president of PDVSA reached 1.987 million barrels per day in February of 2017, according to the OPEC Monthly Market Report, down nearly 344,000 barrels per day from October of 2014 using data from secondary sources.

“Beyond the differences, Del Pino has always overseen petroleum production and been against a Venezuelan default,” said Venezuelan Economist Luis Oliveros when asked about the possible departure of Del Pino from PDVSA during an interview broadcast by Venezuela’s television station Globovision.

[Pietro Donatello Pitts, Energy Analytics Institute, 3.Apr.2017]

DRIVERS SEEK GASOLINE AMID PAYMENT ISSUES Drivers in Venezuela continued to scramble to find petrol late last week as PDVSA service stations around this Caribbean country continued to run low on the fuel.

“Lines have formed in some services stations in four states of the country due to delays in the vessel transport of gasoline,” wrote PDVSA Commercialization and Supply Vice President Ysmel Serrano in a twitter post. “[PDVSA] is reinforcing shipments in the center of the country to stabilize fuel supplies, and is calling on everyone to keep calm and not believe the false rumors from sectors that try to create chaos in the country.”

The situation -- induced due to falling Venezuelan oil production, extremely low utilizations rates at the country’s six domestic refineries, and further by delays importing fuel from other countries due to payment issues with PDVSA -- has affected major cities from Valencia to Maracay, reported the daily newspaper El Mundo de España, citing various oil sector sources.

In the capital city Caracas alone, an estimated 90 petrol stations out of nearly 300 were closed late last week due to the lack of supply, the daily reported.

Venezuela is bringing in gasoline from even Spain as well as the United States, Brazil, and Curacao, said oil union official Ivan Freites with the United Federation of Venezuelan Oil Workers or FUTPV. “Somebody has to pay for this gasoline.”

Venezuela’s oil production reached 2.248 million barrels per day in February 2017 compared to 2.379 million in 2016 and 2.654 million in 2015, reported the Organization of Petroleum Exporting Countries or OPEC in its Monthly Oil Market Report, while refinery utilizations rates in 2016 averaged 30 percent due to countless unplanned outages and a shortage of replacement parts, among other issues, said Freites

An estimated fifteen oil tankers are said to be parked offshore the Venezuelan coast awaiting payment from the socialist government of President Nicolas Maduro before offloading their cargoes, reported the daily, citing opposition lawmaker and economist Jose Guerra. PDVSA has accumulated so much debt with providers that they will not offload their cargoes until they have been paid, he said.

“With a refining capacity of 1.3 million barrels per day we must import $700 million in gasoline,” wrote Guerra in a twitter post.

[Pietro Donatello Pitts, Energy Analytics Institute, 26.Mar.2017]

PDVSA DETERIORATION ON ALL FRONTS In recent weeks PDVSA has reported at least three accidents: Petrotrin oil spill in Sucre state (an inability to react quickly to contain the spill) and incidents at its Cardon and Curaçao refineries. The writing on the wall continues to point to a cash-strapped state oil company with an inability to make investments, retain top talent, organically grow oil production, and let alone take on the leadership role in Venezuela’s upstream, downstream, or midstream sectors.

The stand-alone events at PDVSA’s Cardon and Curaçao refineries demonstrate conditions at the company’s refineries continue to deteriorate as expected due to a lack of investments, upgrades, and maintenance by the state oil entity.

[Pietro Donatello Pitts, Energy Analytics Institute, 22.May.2017]

VENEZUELA TO EXPORT CARDON IV OUTPUT Oil producer Venezuela aims to boost natural gas and condensate production from the largest offshore gas field in Latin America.

Venezuela, located in the northern most part of South America, announced plans to almost double gas production offshore at the Perla field, part of Cardon IV project. The country is also looking to boost production of condensates from the project. Future Perla gas and condensate production could be destined for export to neighboring Aruba, situated about 24 kilometers from Venezuela’s coast, according to Venezuela’s top oil official.

“The idea is to take this field to the second phase of gas production from 500 million cubic feet to 800 million cubic feet,” reported Venezuela’s Oil Ministry in an official statement, citing Oil Minister Nelson Martínez. “A component of the process, fuel, will be destined for the refinery in Aruba. The other component is the 300 million cubic feet to come from Perla,” said Martínez. “Part will be for sale abroad and some for incorporation in the internal market.”

The announcement was made last week by Martínez during a meeting in Caracas with Aruba’s Economy, Communications, Energy, and Environment Minister Mike de Meza who was accompanied by the island’s Labor Minister Paul Croes, reported the ministry. The officials also discussed plans to revamp the Aruba Refinery and convert it into an upgrader that would process 209,000 barrels per day extra-heavy oil from Venezuela’s Hugo Chavez Heavy Oil Belt or the Faja.

Officials from Venezuela and Aruba also discussed construction of a 130-kilometer gas pipeline that would connect both countries. The project is expected to be completed in 18 months. Details about financing where not revealed by the ministries of either country.

Venezuela, with 201.3 trillion cubic feet of proved natural gas reserves, is home to the world’s eighth largest accumulation of the resources, according to BP’s Statistical Review of World Energy. To diversify its foreign export earnings, which are currently skewed 96 percent towards crude oil, the OPEC member country initiated efforts with foreign operators to start producing its offshore non-associated natural gas.

Offshore gas production initiated at the Cardon IV project in 2015 and is expected to commence later this year at the Mariscal Sucre gas project, according to data from state oil company PDVSA. Initial production from Cardon IV will be destined for Venezuela’s domestic market with excess production potentially destined for export markets from Aruba, Colombia, and Trinidad and Tobago, top officials with PDVSA, as the Caracas-based company is known, have consisted said in recent years.

Spain’s Repsol and Italy’s Eni, joint operators, discovered the Perla field in 2009. Initial production at the field, located in shallow waters in the Gulf of Venezuela, commenced in 2015 at 150 million cubic feet per day. Two additional phases of the project’s development will raise gas production to 800 million cubic feet per day in 2017 and then a peak of 1,200 million cubic feet per day in 2020, according to Eni data. The Perla field is also expected to be producing 15,000 barrels per day of condensate, which will rise to 38,000 barrels per day by 2020.

Venezuela’s Information Ministry, the clearing house for all questions regarding the country, and media officials at PDVSA didn’t immediately reply to an e-mail request for comments about the Cardon IV project.

PDVSA has the option to a 35 percent back-in-right into the project with Repsol and Eni. To date, the company has not exercised the option due to cash flow issues, according to two sources with Cardon IV, which is the license holder and operator of the Cardon IV block. The executives, insisted on anonymity since they are not authorized to talk to the media in Venezuela.

[Pietro Donatello Pitts, Energy Analytics Institute, 15.Mar.2017

PETROSAUDI LAWSUIT A SIGN OF DESPERATION PDVSA, seemingly tired of being on the receiving end of countless arbitrations, continues to fire back in a lawsuit of its own. However strange, the case involves a company from Saudi Arabia, a nation seen friendly to the Venezuelan ‘revolution’.

The new multipolar client base created in Venezuela under the leadership of late President Hugo Chávez to replace foreign oil and gas companies such as U.S. giants Exxon Mobil and ConocoPhillips continues to underperform and disappoint the energy-rich country they were supposedly brought in to assist.

Case in point. PDVSA, as the state oil company is known, through its subsidiary PDVSA Servicios SA, remains entrenched in a multi-million-dollar legal battle with Al Khobar-based PetroSaudi Oil Services Ltd. The PDVSA lawsuit seeks to obtain compensation for damages incurred from contracting the company, with supposed major league ties to oil circles in the Kingdom of Saudi Arabia.

An estimated $130 million is at stake for PetroSaudi, according to the London-based Sarawak Report.

However, the High Court of Justice in England issued a judgment in October 2016, declaring “fraudulent, null and void the actions taken by PetroSaudi to execute guarantees and obtain payments in flagrant contravention to the decision by the Arbitral Tribunal prohibiting access to amounts of money that are in dispute in said proceedings until a final judgment on merits is rendered,” PDVSA announced in an official statement.

In the case, filed in Paris and governed under the laws of Venezuela, the Arbitral Tribunal is expected to issue a Final Award in the fourth quarter of 2017, PDVSA reported.

Among other claims, PDVSA continues to seek unknown reparation amounts “for damages incurred due to the poor performance of the offshore drilling unit contracted to carry out drilling and well completion activities in the gas reservoirs located north of Sucre state, as part of the Gran Mariscal Sucre project,” the company announced.

PDVSA has taken some legal actions to stop PetroSaudi “from continuing to abuse, in an unscrupulous manner, the good faith of the parties in the execution of the activities related to the rendering of the offshore drilling services,” PDVSA reported.

Venezuela’s Information Ministry, the clearing house for all questions regarding the country, and media officials at PDVSA didn’t immediately reply to an e-mail request for comments about the case against PetroSaudi.

REALITY TAKE AWAY Deals like this one and numerous others have stymied serious foreign oil and gas companies and investors. But coupled with the threat of future asset expropriates, non-payment or the inability to expatriate revenues, many potential investors have pulled back on their capital outlays or halted them all together. Add to that tax, policy and governability issues and Venezuela appears unbearable. Others, like Houston-based Harvest Natural Resources have decided that leaving Venezuela, the South American country with the world’s largest oil reserves, is the best course of action for the sanity of its employees and more importantly its shareholders.

More than anything the PetroSaudi case reveals the extent to which major energy deals with ideological similar nations, or ones pretending to be, but still lacking the necessary experience -- from Cuba to Vietnam, and others with a leaning toward venality from Southern Procurement Services Ltd. to PetroSaudi – have and will continue to hamper operations in Venezuela’s oil sector and within PDVSA. “The outlook is ‘not great,’ but turnaround in the oil industry could be very significant with the right policies,” reported Rice University’s Baker Institute in a twitter post during a three-person panel discussion on Venezuela, citing Francisco J. Monaldi, Ph.D. and Fellow in Latin American Energy Policy & Lecturer in Energy Economics at Rice University’s Baker Institute for Public Policy. “The main constraints now are cash flow, massive operational difficulties due to incompetence, and lack of human resources.”

Venezuela’s economy was in corruption-induced economic tailspin long before 2014 when oil prices started their decline. The major reductions in oil investments in this country along with the massive oil sector brain-drain has brought the main export revenue generating sector to its knees. Venezuela’s oil output dipped further to 2.0 million barrels per day in January 2017, according to a monthly report posted by the Organization of Petroleum Exporting Countries, citing secondary sources. This compares to peak production of 3.2 million barrels per day most recently reached in 2008, according to PDVSA data.

More than a decade ago Chávez expropriated the assets of foreign oil and gas companies from Exxon Mobil to ConocoPhillips and pushed many of them out of the country if they didn’t agree with his policies. Many, from the U.S.A., Canada, Italy, and other countries raced to queue up at international courts to file lawsuits against their partner PDVSA. Numerous lawsuits filed by foreign companies that operated in Venezuela at the International Centre for Settlement of Investment Disputes (ICSID) have closed recently involving companies from Crystallex International Corporation to Eni Dación B.V., among others primarily in the mining sector. Still, 25 remain pending. Many others have been filed at the International Chamber of Commerce (ICC).

Now, in its most desperate financial moment under the leadership of new President Nicolas Maduro, cash-strapped PDVSA is seeking to sue companies from countries it once reached out to during the creation phase of a multipolar new PDVSA that former company President Rafael Ramirez said in 2014 was no longer a puppet or controlled by U.S. imperialistic interests.

Oil and gas companies from big to small will be needed here to rebuild the oil sector whenever the longawaited regime change occurs. Where exactly Belarusian, Vietnamese or oil companies from nonpetroleum countries fit in is another question.

“In terms of GDP measured in dollars, Venezuela has lost 2/3 of its wealth in just four years,” reported Baker Institute in a twitter post, citing Venezuelan Economist Alejandro Grisanti. “Oil companies will be very important for Venezuela's future. Attracting investment is key to stimulating growth.”

Issues with Chinese-made rigs in Venezuela have always been just that, an issue. But with China mustering up nearly $60-$65 billion in loans in exchange for oil and other guarantees since 2007, it is highly unlikely we’ll see PDVSA suing the Chinese. At least not for now and surely not until they render their crown as the primary financer of last resorts willing to continuously invest capital into a country that will continue to get worst before getting better.

[Pietro Donatello Pitts, Energy Analytics Institute, 5.Mar.2017]

MONAGAS GOVERNOR SPEAKS TO OIL WORKERS Monagas state Governor Yelitze Santaella told Venezuelan petroleum sector workers that “they were writing new pages in the petroleum history of the Venezuelan state.” The statement was made during a forum in Maturín about the importance of the Constituent Assembly.

[Jared Yamin, Energy Analytics Institute, 9.Jun.2017]

DEL PINO SAYS OIL WORKERS BACK CONSTITUENT PDVSA President Eulogio Del Pino called on all petroleum sector workers to promote and participate in the Constituent Assembly process as part of the road to the “structural transformation of the Venezuelan state.”

Del Pino called on workers to participated actively in forums, expositions, and debates among other activities, during a public meeting in San Tomé, reported PDVSA in an official statement.

“We have started here in the San Tomé district in the heart of the Hugo Chávez Orinoco Oil Belt,” said Del Pino. “All the workers back the initiative of President Nicolás Maduro,” he added, referring to calls by the president for a Constituent Assembly.

[Piero Stewart, Energy Analytics Institute, 9.Jun.2017]

MADURO READY TO DIALOGUE WITH USA “The north doesn’t know what to do, they are entering desperation. If they want to talk seriously and together we can look for a new beginning in terms of relations between the USA and Venezuela, I am prepared, I am ready,” Venezuela’s President Nicolas Maduro told foreign media during a press conference in Miraflores Presidential Palace in Caracas.

[Jared Yamin, Energy Analytics Institute, 22.Jun.2017]

DICOM: OPPORTUNITIES FOR BUSINESSMEN The new Dicom foreign Exchange system was created by the revolutionary government to confront the economic war, explained PDVSA President Eulogio Del Pino during a meeting in La Campiña with representatives from 19 joint venture companies. “This will have a positive impact on mixed companies, projects and licenses,” said Del Pino.

Dicom will be essential to boost rentability of PDVSA companies with financing with development projects. “Such is the case of the Deep Conversion Project at the Puerto La Cruz refinery located in Anzoátegui state,” said Del Pino. “This will allow for a prolonged usage life when the Bolivar resources are converted into foreign money using the Dicom rate.”

[Jared Yamin, Energy Analytics Institute, 5.Jun.2017]

MADURO NAMES FOREIGN INVESTMENT MINISTER Venezuela President Nicolás Maduro appointed Miguel Ángel Pérez Abad as the country’s new Foreign Trade and Foreign Investment Minister, replacing Jesús Farías, reported the Venezuelan state news agency AVN. [Jared Yamin, Energy Analytics Institute, 9.Jun.2017]

PETROVICTORIA REPORTS FIRST OIL OUTPUT The joint venture company Petrovictoria reported its first production of crude oil in Venezuela in Monagas state, reported PDVSA in an official statement. The production is part of the early production at the project from Macolla A in the Carabobo 2 Block (C2N) in the Hugo Chávez Orinoco Belt or Faja, according to the state oil company.

Production from Petrovictoria’s CHV-02 well initiated operations with volumetric production of 800 barrels per day (b/d) in the early phase. Crude from the well will be processed using existing production lines in the Carabobo block where it will share operations with the mixed company Petromonagas.

PDVSA estimates development of proved reserves at Petrovictoria’s blocks C2N and C40, which contains estimated 15.596 billion barrels of reserves, with construction of 33 basic production units (UBCP by its Spanish acronym) and drilling of 571 wells with average production of 700 b/d, will produce nearly 400,000 b/d, according to PDVSA. Petrovictoria is comprised of partners PDVSA (60% WI) and Russia’s Rosneft (40% WI).

[Piero Stewart, Energy Analytics Institute, 9.Jun.2017]

VENEZUELA, CHINA SIGN ENERGY AGREEMENTS Venezuela and China signed four strategic agreements regarding the hydrocarbon sector including: an association agreement for the creation of the mixed company Petrochina/PDVSA Guandong Petrochemical Company Limited; constitutional statues for creation of the mixed company; oil supply contract and contract for the sale of refined products, announced PDVSA in an official statement.

[Jared Yamin, Energy Analytics Institute, 9.Jun.2017]

VENEZUELA, CHINA PLANS FOR NANHAI REFINERY Venezuela and China signed an agreement for development of the Nanhai refinery located in the Guandong province, announced PDVSA in an official statement. The refinery will process 400,000 barrels per day (b/d) of heavy Venezuelan crudes Merey16 and/or Dcom16 sourced from the Petrourica and Petrosinovensa projects in the Hugo Chávez Orinoco Belt or other sources with the first option to be transported via sea by the mixed Venezuelan-Chinese company CV Shipping PTE, Ltd. [Jared Yamin, Energy Analytics Institute, 9.Jun.2017]

PEQUIVEN ANALYZES FERTILIZER MARKET Officials from state entity Petroquímica de Venezuela S.A (Pequiven) and the Vice Ministry of Refining and Petrochemicals of Venezuela’s Petroleum Ministry met with PetroCaribe’s Executive Secretary to discuss alternatives for the production and export of Pequiven’s fertilizers.

Discussions focused on Urea and NPK produced by Pequiven and the potential to export the products to Petrocaribe member countries, announced the Venezuela’s Petroleum Ministry in an official statement.

Pequiven plans to have capacity to boost production of Urea and later export between 35,000 and 40,000 metric tons of the product in October 2017 after fulfilling demand in the Venezuelan market, the ministry reported.

[Piero Stewart, Energy Analytics Institute, 9.Jun.2017]

THREE MIXED COMPANY PLANS FOR 2017-2025 The mixed companies Petromonagas, Petromiranda and Petrovictoria plan investments of $10.7 million during 2017-2025 to exploit reserves of 909 million barrels (MMbbls), reported Venezuela’s Ministry of Petroleum citing Nelson Martínez during his participation in a conference in Saint Petersburg, Russia.

Venezuela’s petroleum minister Martínez also added that during 2014-2016 that the mixed companies Petromonagas, Perroboqueron and Petroperij had earnings of nearly $950 million.

“Venezuela’s doors are open to petroleum investments,” said Martínez.

[Piero Stewart, Energy Analytics Institute, 7.Jun.2017]

VENEZUELA SEEKS MARKET EQUILIBRIUM Venezuela continues to seek market equilibrium via the reduction of excess crude oil inventories, reported Venezuela’s Ministry of Petroleum citing Nelson Martínez during his participation in a conference in Saint Petersburg, Russia.

“We are looking for a price that is comfortable for everyone, it entails obtaining an equilibrium in the market,” said Martínez.

[Jared Yamin, Energy Analytics Institute, 7.Jun.2017]

TRANSNATIONALS AFTER VENEZUELAN OIL The Venezuelan opposition and transnationals are oriented towards controlling the resources of our country, especially the petroleum riches, reported PDVSA in an official statement citing company President Eulogio Del Pino during his participation in a political rally in San Tomé in Anzoátegui state.

“They are coming for our petroleum industry, the petroleum that is contained in the Hugo Chávez Orinoco Belt,” said Del Pino. “Commander Chávez is a reference in material related to petroleum. He took control of the Venezuelan petroleum industry which was in the hand of the transnationals.”

[Jared Yamin, Energy Analytics Institute, 10.Jun.2017]

USA, TRANSNATIONALS AFTER RESOURCES Transnational companies are interested in destabilizing Venezuela to eventually gain access to the OPEC country’s hydrocarbon reserves, reported Venezuela’s Hydrocarbon Ministry, citing Economist Fernando Travieso.

“Venezuela is a nature-rich country with the largest petroleum reserves in the world and minerals that guarantee the future of the nation,” said Travieso. “That is why the USA attacks us.”

[Jared Yamin, Energy Analytics Institute, 17.Jun.2017]

PERLA FIELD PRODUCING MORE THAN 540 MMCF/D Venezuela’s Perla gas field offshore is producing more than 540 million cubic feet per day (MMcf/d) and 15,000 barrels per day (b/d) of condensate, reported PDVSA in an official statement.

Officials from ENI and PDVSA meet in Caracas to discuss non-associated gas production offshore in the Cardón IV block offshore the Gulf of Venezuela. Plans for the block include boosting production to 1,200 MMcf/d of natural gas and 37,000 b/d of condensate.

Future production increases from the block will be destined to cover demand in Venezuela and for potential export to Aruba, Colombia, and Trinidad and Tobago as well as other markets in Latin America and the Caribbean, announced PDVSA President Eulogio Del Pino.

ENI Executive President Claudio Descalzi said during his meeting with Del Pino and PDVSA’s Gas Vice President Cesar Triana that the Italian company was interested in using the latest technology for the exploration of the Perla gas via use of a Floating Liquefied Natural Gas unit or FLNG. [Piero Stewart, Energy Analytics Institute, 15.Jun.2017]

PDVSA INITIATES PROJECT TO EXPORT COKE PDVSA plans to initiate a project that entails construction of transport systems for coke domiciled in the Complejo Industrial José Antonio Anzoátegui (CIJAA) and later to export of product, reported Venezuela Ministry of Petroleum in an official statement.

PDVSA plans to first transport the product to another dock and thereafter the company plans to export up to 12 million metric tons per year over five years.

[Piero Stewart, Energy Analytics Institute, 20.Jun.2017]

LPG USERS PAYING BS6000 FOR 10 KG TANK The scarcity of LPG in Venezuela has pushed up the price of the product in the energy-rich country.

Users are said to have paid up to Bs6,000 Venezuelan bolivars for a 10-kilogram tank, reported the daily newspaper El Nacional. PDVSA Gas has stated that a tank of this size should cost Bs50 bolivars, reported the daily saying the price was elevated by 11,900 percent.

[Jared Yamin, Energy Analytics Institute, 21.Jun.2017]

ROSNEFT SAYS NEVER LEAVING VENEZUELA Russia’s Rosneft has no plans of leaving Venezuela, according to the company’s Executive Director Igor Sechin.

“We will never leave Venezuela,” reported the daily El Nacional citing comments made by Sechin during a conference in Saint Petersburg, Russia.

[Jared Yamin, Energy Analytics Institute, 21.Jun.2017]

NEGOTIATIONS FOR GAS EXPORTS TO TRINIDAD PDVSA and Shell assessed the progress of negotiations for the export of gas from Venezuela to Trinidad and Tobago and the completion of Dragón Field Accelerated Production Scheme Project.

The meeting was headed by President of PDVSA Eulogio Del Pino, together with Vice President of Gas and President of PDVSA Gas César Triana, President of Shell Venezuela and Trinidad Luis Prado, representative of Shell for South America and Africa Mounir Bouaziz, as well as members of PDVSA Offshore.

The executives discussed general premises regarding the Dragón-Hibiscus interconnection project for the shipment of gas from Venezuelan fields in northern Paria and monetization through existing infrastructure in the neighboring country.

They also discussed proposals for the completion of infrastructure related to Dragón Field production – which has 91 percent progress and it will guarantee the extraction and handling of the gas volumes that will initially go to the internal market. Once the interconnection is completed, gas will be exported via Hibiscus to Trinidad and Tobago.

The negotiation is focused on three aspects: gas volumes, gas price, and interconnection point in the field.

PDVSA's vice president of PDVSA Gas said that negotiations are moving in the right direction.

“We are reviewing the export resource base. We have received proposals to complete the accelerated production project and the future development of the field, to increase export volumes to the Caribbean nation,” said Triana. “We hope to continue meeting through the joint coordination committee to reach the happy ending of this project.”

Northern Paria has 14.3 trillion cubic feet (Tcf) of gas reserves in four fields: Dragón, Patao, Mejillones and Río Caribe. Dragón alone has 3.1 Tcf. At the meeting, they also discussed a proposal for the collection of vent gas from Northern Monagas and other general issues pertaining to the Petroregional del Lago joint venture.

PDVSA is on track for first production of Dragón Field. The first volumes will go to the internal market to replace the diesel currently consumed by the thermoelectric plants, in so doing releasing 32,000 thousand barrels and generating export revenues for the country.

[PDVSA, 19.May.2017]

PDVSA AND SHELL EVALUATE VENEZUELAN GAS PDVSA and Shell continue to conduct discussions related to the exportation of Venezuelan natural gas to the twin-nation island of Trinidad and Tobago, reported PDVSA announced in an official statement.

"We are evaluating the base of resources for export,” reported PDVSA citing PDVSA Gas President César Triana. “We have received proposals to finalize the accelerated production project and future development of the field to boost export volumes to the Caribbean nation.”

Discussions between the companies were headed by PDVSA President Eulogio Del Pino and PDVSA Gas President Cesar Triana and Shell Venezuela and Trinidad President Luis Prado. The discussions between the company teams focused on three aspects: gas volumes, gas prices and the interconnection point in the field.

An earlier agreement signed by the companies entails construction, operation, and maintenance of a gas pipeline to transport the fuel source between both nations and span from the Dragon field located in Sucre state to the Hibiscus field in Trinidad. The project is estimated to have achieved the 91 percent completion mark, the news agency reported.

Paria North, where the gas will come from, contains 14.3 Tcf of gas reserves in four fields: Dragón, Patao, Mejillones and Río Caribe. The Dragón field alone contains 3.1 Tcf, according to PDVSA. Discussions also focused on the flaring of gas in North Monagas and future recollection of this gas and other general themes related to the Petroregional del Lago mixed company.

The initial volumes from the Dragón field will be destined for the Venezuelan domestic market to substitute the use of diesel at thermoelectric plants, which is estimated to free up 32,000 b/d of fuel.

[Jared Yamin, Energy Analytics Institute, 21.May.2017]

RUSSIA’S PUTIN SEEKS FOOTHOLD IN US PDVSA recently put up a nearly 50 percent interest in Houston-based refiner Citgo Petroleum Corporation as collateral for a $1.5 billion loan from Russian company Rosneft - raising worries that a Citgo default would allow Russian President Vladimir Putin to get a foothold in the U.S. oil industry, reported the Associated Press.

[Jared Yamin, Energy Analytics Institute, 21.May.2017]

OIL SPILL CLEAN-UP ACTIVITIES ADVANCE PDVSA announced that clean-up activities continue along the Venezuelan coast off Sucre state, related to the spill of crude oil at the Pointe-à-Pierre refinery in Trinidad and Tobago, reported the state oil company in an official statement.

After reviewing clean-up activities along the Paria Peninsula, PDVSA President Eulogio Del Pino announced Venezuela had removed 80 percent of the spill fuel.

“We flew over Cocal, Pata, and Puerto Hierro beaches as well as Pato Island and observed that the clean-up process is above 80 percent,” said Del Pino. “The remaining impact is minimum.”

We have removed 80 percent of the fuel from the spill that had reached La Caracola beach in Margarita Island, said Del Pino. Oil also reached Los Roques; however, the impact was minimum, PDVSA reported.

PDVSA is awaiting a visit from Petrotrin to discuss the oil spill. “Petrotrin [officials] will visit all the affected areas,” said Del Pino.

[Piero Stewart, Energy Analytics Institute, 20.May.2017]

PDVSA CONTINGENCY PLAN FOR T&T SPILL PDVSA reiterated in a twitter post that once the authorities from Trinidad and Tobago notified the company of the Petrotrin oil spill that it activated local contingency plans.

[Jared Yamin, Energy Analytics Institute, 20.May.2017]

PDVSA SAYS CURACAO REFINERY FIRE OUT PDVSA announced that it has completely controlled a fire that occurred at its Isla de Curacao refinery.

The incident occurred at the distillation unit of the refinery, reported PDVSA in an official statement.

PDVSA has assigned an investigation committee to determine the causes of the incident.

[Jared Yamin, Energy Analytics Institute, 21.May.2017]

PDVSA’S DEL PINO BACKS CONSTITUENT PDVSA President Eulogio Del Pino announced that he fully backs Venezuelan President Nicolás Maduro in the Constituent Assembly process to defeat what he described as violence brought about by the rightwing political groups, reported PDVSA, citing the president of the state oil company.

“They send paramilitaries to attack our distribution units and services stations to later say there is no fuel and generate false opinions about supply,” said Del Pino.

[Ian Silverman, Energy Analytics Institute, 23.May.2017]

OIL WORKERS MARCH WITH MADURO Venezuelan petroleum sector workers accompanied Venezuelan President Nicolás Maduro during a march for peace to the headquarters of the National Electoral Council (CNE by its Spanish acronym) in Caracas where he revealed details related to the upcoming Constituent Assembly, a process to rewrite the OPEC country's Constitution.

“The petroleum workers are here defending the Bolivarian Revolution and giving their all for dialogue,” said PDVSA External Director Ricardo León, referring to the ongoing protests nationwide against the government of Maduro.

[Ian Silverman, Energy Analytics Institute, 23.May.2017]

ALL MINING HAS NEGATIVE ENVIRONMENT EFFECT All mining has a negative effect on the environment, announced Fernando Jáuregui, Environmentalist with Ecoprácticas during an interview broadcast on Globovision. The expert added that studies show and detail mercury contamination in southern parts of Venezuela.

[Jared Yamin, Energy Analytics Institute, 9.Apr.2017]

MINING INCOME FOR SOCIAL DEVELOPMENT All income from mining sector (Arco Minero) exploitation will to be destined directly for social investments, Venezuelan Minister Jorge Arreaza said during Expo Venezuela Potencia.

[Jared Yamin, Energy Analytics Institute, 3.Apr.2017]

CITGO’S CONTRIBUTION TO TRUMP INAUGURATION Citgo attracted attention in Washington earlier this year by donating $500,000 to the inauguration fund of President Donald Trump, a sum that exceeded gifts by Shell, Walmart and most other U.S. companies.

[Jared Yamin, Energy Analytics Institute, 15.May.2017]

PDVSA HALTS CARDON CATALYTIC UNIT PDVSA halted the catalytic cracking unit at the 310,000 barrel per day (b/d) Cardón refinery in Punto Fijo, reported Reuters, citing a worker at the plant and a union official. It is unclear when the unit will be back online.

[Piero Stewart, Energy Analytics Institute, 16.May.2017]

PDVSA STEPS UP FUEL SECURITY PDVSA has reinforced efforts to protect is fuel supply amid ongoing protests across Venezuela. Several protests have led to incidents affecting gasoline distribution tankers and oil sector workers, reported PDVSA in an official statement.

“We have reacted rationally and continue to transport more than 1,600 gasoline gondolas and another 1,000 with gas that are moved daily throughout the country,” said PDVSA President Eulogio Del Pino.

[Ian Silverman, Energy Analytics Institute, 18.May.2017]

RANCHERS AFFECTED BY GASOLINE SHORTAGES In recent weeks, a reported 66 companies in Venezuela dedicated to the collection of milk have closed their doors and stopped distribution activities due to problems receiving fuel, reported the daily newspaper El Nacional, citing Leonardo Figueroa, president of the Ranchers Association of Táchira state.

“We don't have gasoil or gasoline,” said Figueroa during an interview with Union Radio. “Transport operations are paralyzed and if the situation isn't resolved soon it could cause a crisis worse than what we are living due to the scarcity [of just fuel].”

Táchira state is a major producer of milk in Venezuela, he added.

[Jared Yamin, Energy Analytics Institute, 19.May.2017]

VENEZUELA FACES LIQUIDITY CRISIS Whether it is petroleum production below historic average levels or economic distortions on all fronts, the problem with Venezuela, which is clear for the financial markets, is the liquidity crisis, according to an economist in Caracas.

“Venezuelan debt is considered one of the most attractive for those willing to assume the risk, said Peruvian Economist José Gonzáles during an interview broadcast by Globovision. As they say in the financial markets, “the Venezuelan debt is not for the weak of heart.” The Venezuelan bonds are very attractive but also very volatile, he said.

The returns on the Venezuelan bonds [are demonstrating to some extent] -- because the perception continues to be that the payment conditions are critical in terms of liquidity and if this economic situation continues -- that it could led to insolvency, said Gonzáles.

[Piero Stewart, Energy Analytics Institute, 20.May.2017]

VENEZUELA: HIGH INFLATION OR HYPERINFLATION “This government doesn’t want to reduce inflation because this government, generating inflation uses it to finance itself,” said opposition lawmaker and Economist José Guerra. “The inflation is a financing mechanism of the government and that is why they don’t want to stop it,” he said.

“When there is high inflation or hyperinflation, the solution is very simple: stop the issuance of inorganic money that is carried out by the Venezuelan Central Bank,” said Guerra.

[Ian Silverman, Energy Analytics Institute, 20.May.2017]

PDVSA GUARANTEES SUPPLY OF FUELS PDVSA continues to guarantee the supply of fuels across the country despite ongoing protests, reported the state oil company in an official statement, citing Commerce and Supply Vice President Ysmel Serrano.

PDVSA guarantees delivery of more than 50 million liters of fuel including 91 and 95 octane gasolines, diesel, domestic gas, and marine fuel, among others, announced Serrano without providing a specific period.

[Ian Silverman, Energy Analytics Institute, 20.May.2017]

TWO PLANTS AT ISLA REFINERY BACK ONLINE Two plants at PDVSA’s Isla Refinery in Curacao, which reported a fire on 21 May 2017 at its distillation unit, have been brought back on line and have contributed to the recuperation of processing capacity at the refinery, the cash-strapped state oil company reported in an official statement.

[Ian Silverman, Energy Analytics Institute, 8.Jun.2017]

PDVSA SIGNS FOUR DEALS WITH CHINA PDVSA signed four agreements with China for the creation of mixed company and development of a 400,000 barrel per day refinery in China’s Guandong province that would take on Venezuelan heavy oil, the Caracas-based state oil company reported in an official statement.

[Ian Silverman, Energy Analytics Institute, 8.Jun.2017]

SMALL SERVICES COMPANIES GETTING SQUEEZED Small-capped companies have always brought something to the oil patch: new innovations as well as interest in fields deemed too small for the integrated majors.

However, small oil field services companies in Venezuela are really feeling the bad effects of the collapse of the country’s petroleum sector. A lack of work and payments coupled with an increased presence of Chinese and Russian companies as well as inexperienced Venezuela companies has pushed many of them to reduce operations or halt them all together. Many may never emerge again.

[Ian Silverman, Energy Analytics Institute, 3.Jun.2017]

TRINIDAD OVER RELIANCE COULD BACKFIRE Venezuela still owes a lot of money to the airline sector as well as petroleum contractors and providers and has seen lending from China slow in recent years. That hasn’t stopped the government of Trinidad and Tobago and its state oil entity Petrotrin from getting closer to its cash-strapped and crisis stricken neighbor.

Trinidad and Co. have stepped up negotiations with its troubled neighbor Venezuela despite the economic, political, and humanitarian crises that confront the OPEC nation. However, the success of late should not lead the government of Trinidad or companies, including Petrotrin, to believe that commercial deals with Venezuela or PDVSA will prove profitable. If recent Venezuela history is any indication of what could happen to a country or company willing to invest in a country tittering with a financial default, Trinidad and Co. better brace themselves for late payments, if they are made at all, or worse.

Trinidad -- which has stepped up dealings with Venezuela at a time when other long-term clients and investors have pulled back substantially on their investments if they make them at all -- is seemingly caught up playing a very attractive but dangerous game with a country that literally could implode and go up in smoke any day like a firecracker on the ground that was thought to be a dud.

[Piero Stewart and Ian Silverman, Energy Analytics Institute, 23.Jun.2017]

COMMISSION REJECTS OPS IN ESSEQUIBO Venezuela’s Energy and Petroleum Commission to the National Assembly approved a deal that rejects the operations of oil companies in Guyana’s Essequibo region where ExxonMobil has announced a large oil discovery and in a region disputed by Venezuela as its own under the Geneva Agreement. The deal looks to immediately suspend operations in the area.

[Ian Silverman, Energy Analytics Institute, 28.Jun.2017]

FOREIGN COMPANIES TAPPED FOR INVESTMENT Venezuela, which continues to see its oil production decline, openly announced to the world and foreign oil and gas companies, including Exxon Mobil, its continued interest in working with them in the future to develop energy projects.

[Ian Silverman, Energy Analytics Institute, 27.May.2017]

DEL PINO CELEBRATES FAJA NATIONALIZATION On May 1, 2017, PDVSA President Eulogio Del Pino marched with oil workers towards Avenida Bolívar in Caracas to celebrate International Worker’s Day and to celebrate the 10 years of the nationalization of the Hugo Chávez Orinoco Heavy Oil Belt, also known as the Faja.

This made it possoible for Venezuela to certify more than 160 billion barrels of oil and allow Venezuela to rise to rank as the country with the largest oil reserves in the world, announced Petróleos de Venezuela (PDVSA) in an official statement, citing Del Pino “They said we wouldn’t be able to handle the operations in the Faja and that within two months all of the upgraders would be halted and that we were incapable of continuing production operations,” said Del Pino. “Thanks to the massive force of revolutionary workers, 10 years after the fact, we continue to produce in the same areas and continue to incorporate new ones.”

[Piero Stewart, Energy Analytics Institute, 2.May.2017]

DEL PINO BACKS DECISION TO EXIT THE OAS PDVSA President Eulogio Del Pino is in complete agreement with Venezuela’s decision to leave the Organization of American States (OAS), reported PDVSA in an official statement.

“I think that this decision was coming,” reported PDVSA, as the state oil entity is known, citing Del Pino.

“We can’t continue as a member of an organization that has brazenly attacked the soveriegnty of the country. Proudly, we are the first country of the organization to withdraw, and no longer be a part of this farce.”

[Piero Stewart, Energy Analytics Institute, 2.May.2017]

MADURO ANNOUNCES 60% BOOST IN WAGES Venezuela’s President Nicolas Maduro announced a 60 percent increase in the minimum wage across all levels and an increase in the socialist lunch ticket to 15 from 12 points, reported PDVSA in an official statement.

All summed, the president’s announcement will bring the total minimum wage in Venezuela to 200,000 Bolivars per month or realistically $40.75 per month using a third-party published parellel exchange rate compared to the optimistic $278.77 per month using the Dicom official exchange rate.

[Clifford Fingers III, Energy Analytics Institute, 2.May.2017]

WORKERS DEFENDING OIL SOVEREIGNTY Venezuela’s Oil Minister and former President of Houston-based Citgo Petroleum Corporation Nelson Martínez announced that Venezuelan oil sector workers were defending their country’s oil sovereignty.

“We went out in defense of the Oil Sovereignty left to us by Commander Hugo Chávez. Never again will our resources be in the hands of others,” wrote Martínez in a twitter post on 19 April 2017, referring to the participation of oil ministry workers in protests across the country.

[Piero Stewart, Energy Analytics Institute, 19.Apr.2017]

SITUATION CAUSING ALARM AMONG INVESTORS The rupture of the constitutional thread in Venezuela denounced by the National Assembly, the District Attorney, and the international institutions has complicated the current situation regarding investments in Venezuela, said Economist and Ecoanalítica Director Alejandro Grisanti in Caracas during an interview broadcast on Globovision television.

Because of ongoing uncertainties related to the political, economic, and humanitarian crises in the country, it is possible that oil companies will postpone planned investments, said Grisanti, the former head of research and strategy in Latin America for Barclays Capital in New York.

[Piero Stewart, Energy Analytics Institute, 14.Apr.2017]

PLC REFINERY TO RECEIVE NEW FINANCING The president of PDVSA, Eulogio Del Pino, received a high-level delegation from Hyundai Engineering & Construction, the main contractor of the Deep Conversion Project at Puerto La Cruz Refinery, to move forward with the new financing tranche that will bolster the largest oil refining business project in the Americas, with a total construction area of more than 2 million square meters, on four work fronts, and more than 7,000 workers.

The meeting was attended by President of Hyundai Engineering & Construction Soo-Hyun Junk and Executive Vice President Lee Won Woo. They expressed their full confidence in PDVSA's work capacity to continue the expansion of Puerto La Cruz Refinery, a key project in the consolidation of the Hydrocarbons Economic Driver promoted by the Bolivarian Government of President of the Republic Nicolás Maduro.

Also in attendance were PDVSA Vice President of Refining Guillermo Blanco Acosta; Director of New Refinery, Upgrader and Terminal Projects Gabriel Oliveros, and the General Manager of the Deep Conversion Project Valeria Negretti.

Del Pino said Deep Conversion is an engineering project of great importance to the nation since it involves the worldwide commercial launch of PDVSA Intevep's HDH PLUS® technology for the processing of heavy crude from the Hugo Chávez Orinoco Belt in order to obtain clean final products without coke generation which will be sold in the international market.

This oil refining project, unique in the world, is being carried out in the midst of a low oil prices scenario, thanks to an international financing of more than $8 billion, which includes high social investment.

Currently, Engineering, Procurement and Construction has a 79 percent progress.

[PDVSA, 15.May.2017]

PDVSA TO BOOST TECHNOLOGY DEVELOPMENT Spokespersons from the Technological Sovereignty Socialist Grafting held a meeting with Ricardo León, external director of PDVSA and spokesperson for Phase 5 of the Socialist Strategic Plan (PES) 20162026.

They reviewed the progress and obstacles, as well as results that are being expected. One of the priorities is the development of IT solutions that extract, organize, and analyze large volumes of data from all oil industry operations.

“In 2016, this Socialist Grafting made progress in the building of a technology community; more than 3,000 PDVSA workers joined in and contributed ideas and knowledge to this community,” said León.

Working groups will be formed according to regions to create a knowledge network, organize experiences and proposals, and move forward in the creation of open source software products.

The workers collective that promotes the Technological Sovereignty Socialist Grafting is involved in a participatory and protagonist management model that responds to the interests of the nation and strengthens their own developments.

“We have proposed a new architecture that integrates the information produced in PDVSA and the leverage of technical activities through volunteer work. We must take advantage of workers’ potential to produce the technology solutions needed for national development,” said Efraín Daubront, IT professional for PDVSA Intevep Exploration Strategic Research Office.

“With this Socialist Grafting we have realized that oil workers have a lot of ideas. We are fleshing out these technology proposals, reorganize them and make them consistent with the oil business –it’s part of the job we have to do now,” said Willy Mata, IT architect at subsidiary PDVSA Gas. [PDVSA, 11.May.2017]

PDVSA AND CAMIMPEG-SPS SIGN DEAL “There are more than 500 million barrels to be developed at Urdaneta Field and we are going to take it to its maximum production,” said PDVSA President Eulogio Del Pino after the signing of the Services Agreement for the increase of hydrocarbons production, through integral solutions, between the oil industry and the Camimpeg-SPS alliance.

They want to quickly increase production in Lake Maracaibo by more than 30,000 barrels per day, through joint work between the military industry and PDVSA, with a $400 million investment. The signing ceremony was held on the Alí Primera Dock, located in La Cañada de Urdaneta municipality, Zulia state.

Del Pino said an unconventional financial model was being applied, for the first time in lake operations, and through which “we pay upon services rendered, in this case, upon incremental barrel produced.” The model has been implemented in other areas, and will be replicated in other Lake Maracaibo fields.

The alliance between Camimpeg-SPS and PDVSA calls for the development of the Urdaneta Field in Lake Maracaibo, as well as works on Alí Primera Dock. The works include the adequacy for the repair facilities of boats and installations, field optimization, safety reinforcement, and well drilling and recovery.

“It’s a historic alliance, in a historic day, in a historic moment. The Homeland defends its Revolution amid international media attacks. We signed an agreement for productivity, for efficiency, to generate resources that will be allocated to our People. This is why the nation is being attacked. We exploit it for our people and not for shareholders who are outside the country or who will take those resources to other borders,” said Del Pino.

“I am very proud that we are signing with the Compañía Anónima Militar de Industrias Mineras, Petrolíferas y Gas, which is associated with a young company such as SPS (Southern Procurement Services). They have all our support,” said Del Pino, while expressing his intention to strengthen alliances between the military industry and the oil industry: “We will make it indestructible.”

PDVSA sealed a new strategic agreement as part of the actions undertaken to boost oil and gas production in Maracaibo Lake, within the framework of the Hydrocarbons Economic Driver.

This action represents an opportunity for increased production through the efficient and strategic drainage of recoverable reserves of hydrocarbons in the reservoirs, with the joint work between the state oil company and the private sector.

The event was also attended by the Executive Vice President of PDVSA Maribel Parra; PDVSA Vice President of Exploration and Production Nelson Ferrer; President of Camimpeg, Major General Alexander Hernández; and the President of SPS Manuel Chinchilla.

Major General Alexander Hernández, president of Camimpeg, stressed that the military industry unconditionally supports PDVSA –victimized in the war that it is waging- proposing comprehensive solutions with state-of-the-art technology to increase oil production.

The Hydrocarbons Economic Driver is one of 15 created by the Bolivarian Government to generate proposals that result in investments, with the aim of revitalizing the portfolio of projects and countering the economic war against Venezuela’s production system. [PDVSA, 5.May.2017]

INDOVENEZOLANA OPENS INJECTION PLANT Petrolera Indovenezolana, a joint venture of Corporación Venezolana del Petróleo (CVP), located in Hugo Chávez Orinoco Oil Belt’s Junín Division, opened a Saltwater Injection Plant in Zuata North field, Anzoátegui state, in order to bolster production and prevent reservoir declination.

Venezuelan technology was used in the early stages of this project, the result of agreements of Venezuela with India through the company Oil and Natural Gas Corporation Videsh (ONGC), strategic partner of PDVSA. Rubén Figuera, executive director of New Developments of the Belt, toured the area together with Pasala Rao, director of Operations of ONGC Videsh, and managers and workers of Petrolera Indovenezolana.

“The injection of water into the 'E' and FG sands is very important, because it is being implemented after the production of 16° - 18° API crude by natural flow. Unlike other areas, it is crude that does not need diluent for transportation. For us it is important to maintain the production of the Orinoco Oil Belt,” he said.

This project aims at recovering the level of production and increasing it in the short term from 18.5 to 23 thousand barrels per day (Mb/d), to reach in the medium term an average of 22 Mb/d and maintain this level of production throughout 10 years. The implementation of this secondary recovery method will increase the current recovery factor from 9 percent to 15 percent, thus recovering an additional 80 million barrels.

Pasala Rao thanked the PDVSA team for successfully implementing the first phase of the project. “We are going to invest about $318 million on this water injection plant. We are planning to finish the second one next year,” he said.

Petrolera Indovenezolana President Nelson Ramírez said they are on track to finish the water injection plant by 2018 and all programmed targets will be met.

Finally, Joan Marcano, of Indovenezolana’s infrastructure office, said that phase I of the project is the result of the integration of knowledge and experiences between personnel from India and Venezuela.

“The infrastructure that has been put into operation demonstrates the capacity to work as a team and the effectiveness of having a well-defined objective, namely, to preserve the pressure of the deposits of the Zuata North field,” he said.

[PDVSA, 5.May.2017]

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