September 30, 2010 - BUENOS AIRES: Loma La Lata-Sierra Barrosa, Argentina, Commercial Asset Valuation And Forecast To 2027 (ARGENTINA)
Source: Official Spin
Source: Official Spin
Loma La Lata-Sierra Barrosa, Argentina, Commercial Asset Valuation and Forecast to 2027 ; The Loma La Lata-Sierra Barrosa field is located in Neuquen basin. It is the largest gas field of South America. Repsol YPF is the operator of the field which has 100% equity stake in it. It has 196 major wells and average daily production is approximately 25 million standard cubic meters. The Loma La Lata-Sierra Barrosa field produces crude oil and natural gas. The field produces the crude oil of West Texas Intermediate quality with approximately 35º API and sulfur content of 0.40% (by weight).Loma La Lata-Sierra Barrosa field started production in 1989 and has produced around 49.93 million barrels of crude oil and 930.60 billion cubic feet of natural gas from the last three years. The current production (2010) of the field is estimated to be approximately 15.84 million barrels of crude oil and 245.05 billion cubic feet of natural gas.The production life of the Loma La Lata-Sierra Barrosa field is expected to be around 38-39 years with complete abandonment during 2027. The field is expected to generate $21.42 bn in revenue (undiscounted) during its remaining life (starting January 1, 2010) and is expected to yield an IRR of 11.34%.
September 28, 2010 - BUENOS AIRES: Argentines brace for energy price hikes (ARGENTINA)
Source: Financial Times
Source: Financial Times
Purple posters with a drawing of candles on them have gone up on billboards around Buenos Aires. Their message is simple: Most residents have got used to paying less over the past decade for their electricity than the cost of a couple of candles.
Campaigns to educate Argentines to use energy rationally have been largely absent in a country where, since the economy crashed into a historic sovereign debt default in 2001, tariffs have remained largely frozen. There is so little incentive to use energy wisely that, the joke used to go, if in winter you were hot, you kept the heating on and simply opened the window. That will change, to some extent, this Friday, when the government unwinds some subsidies applied during the winter months to mitigate its last attempt to hike prices – which ran into fierce opposition from consumer groups. The heaviest users can expect a hefty 200 per cent rise, while medium users will see their bills go up by some 50 per cent. In a country where inflation – inexorable, although officially denied, and running at some 20 to 25 per cent according to private analysts – is eroding purchasing power, the latest attempt to push up bills is not going to go down well.
Argentina probably has some leeway to increase prices. Fuel prices have been climbing steadily since the start of the year, and though motorists have grumbled, car sales are still booming (in part, because buying things like cars is a good hedge against inflation).
Residential gas prices in Argentina are some 0.29 pesos ( 7 US cents) per cubic metre, against 8 pesos in Brazil and 4.6 in Chile. Marcelo Mindlin, president of Pampa Energía, a large electricity company, says 9 out of 10 electricity users in Buenos Aires and the greater Buenos Aires area pay less than 1.33 pesos a day – the product of indiscriminate subsidies for all users, rather than just the poorest sectors.
That has to change. Electricity demand has surged an estimated 50 per cent in the last decade, and though consumers have become comfortable with low rates, Argentina’s energy resources have been badly depleted; it has spent fortunes on subsidies in what is a highly regulated market which has discouraged investment. Energy imports have surged as production has fallen. And the government has taken as a provocation upbeat announcements by UK companies exploring for oil and gas around the disputed Falkland Islands about the area’s commercial potential.
The government – which is pushing for wealth redistribution at the same time as dishing out subsidies - says residential customers who use less than 1,000 cubic metres of gas a month and less than 1,000 kilowatts of electricity saw no price increases between 2003 and 2010,while those who use more than those levels saw gas bills rise 97 per cent and electricity bills rise 81 per cent over the period.
Argentina’s rates lag even those of humble Paraguay and the situation can surely not last. But with elections just over a year away and voters to keep sweet, the sweeping readjustments to a sector for which the government has no strategic long-term plan are likely to remain on ice.
Campaigns to educate Argentines to use energy rationally have been largely absent in a country where, since the economy crashed into a historic sovereign debt default in 2001, tariffs have remained largely frozen. There is so little incentive to use energy wisely that, the joke used to go, if in winter you were hot, you kept the heating on and simply opened the window. That will change, to some extent, this Friday, when the government unwinds some subsidies applied during the winter months to mitigate its last attempt to hike prices – which ran into fierce opposition from consumer groups. The heaviest users can expect a hefty 200 per cent rise, while medium users will see their bills go up by some 50 per cent. In a country where inflation – inexorable, although officially denied, and running at some 20 to 25 per cent according to private analysts – is eroding purchasing power, the latest attempt to push up bills is not going to go down well.
Argentina probably has some leeway to increase prices. Fuel prices have been climbing steadily since the start of the year, and though motorists have grumbled, car sales are still booming (in part, because buying things like cars is a good hedge against inflation).
Residential gas prices in Argentina are some 0.29 pesos ( 7 US cents) per cubic metre, against 8 pesos in Brazil and 4.6 in Chile. Marcelo Mindlin, president of Pampa Energía, a large electricity company, says 9 out of 10 electricity users in Buenos Aires and the greater Buenos Aires area pay less than 1.33 pesos a day – the product of indiscriminate subsidies for all users, rather than just the poorest sectors.
That has to change. Electricity demand has surged an estimated 50 per cent in the last decade, and though consumers have become comfortable with low rates, Argentina’s energy resources have been badly depleted; it has spent fortunes on subsidies in what is a highly regulated market which has discouraged investment. Energy imports have surged as production has fallen. And the government has taken as a provocation upbeat announcements by UK companies exploring for oil and gas around the disputed Falkland Islands about the area’s commercial potential.
The government – which is pushing for wealth redistribution at the same time as dishing out subsidies - says residential customers who use less than 1,000 cubic metres of gas a month and less than 1,000 kilowatts of electricity saw no price increases between 2003 and 2010,while those who use more than those levels saw gas bills rise 97 per cent and electricity bills rise 81 per cent over the period.
Argentina’s rates lag even those of humble Paraguay and the situation can surely not last. But with elections just over a year away and voters to keep sweet, the sweeping readjustments to a sector for which the government has no strategic long-term plan are likely to remain on ice.
September 27, 2010 - FALKLAND ISLANDS/MALVINAS: Falklands Oil Quest Receives More Cash (ARGENTINA)
Source: OfficialWire
Source: OfficialWire
Desire Petroleum, one of the six oil companies exploring for hydrocarbons in the waters of the British-ruled Falkland Islands, raised new cash through equity to push forward its seismic surveys to successful conclusion.
The U.K. company, listed on the Alternative Investment Market, said it raised $36 million through pound sterling share placements to enable it to continue with scientific research and identify more lucrative oil deposits than those previously drilled.
So far Desire has been less successful than Rockhopper in locating hydrocarbons that will give its shareholders much needed returns on their investments.
The frenetic quest for oil in the North Falkland Basin in the South Atlantic waters east of South American mainland began last year amid predictions the deep-water reserves could rival those in the North Sea or even some reserves in Saudi Arabia.
The results so far have been modest but haven't calmed Argentina, which claims the British Overseas Territory is London's colonial outpost and Buenos Aires is the rightful owner. Bearing the same claim, an Argentine military junta invaded the islands in 1982 but was beaten back, with the loss of more than 1,000 lives.
Despite a formal surrender to the British military, Argentina didn't relinquish the claim pursued by its defeated dictators and launched a vigorous international campaign to oppose the islands' current status as a British Overseas Territory.
Argentina's claim has had mixed results on the diplomatic front. Argentine President Cristina Fernandez de Kirchner launched further tirades against Britain and the United Nations last week -- the latter for continuing to insist the dispute needs to be resolved bilaterally by Argentina and Britain.
Desire Petroleum was unfazed by the latest Argentine pronouncements at the United Nations. The company said it would use the additional funds to acquire and process further 3-D seismic images of sea waters under its license, on the east flank of the North Falkland Basin, in Tranches D and F.
Another British company active in the area, Rockhopper Exploration, made what it considers a significant discovery of hydrocarbons called Sea Lion earlier this year.
Since that discovery, Desire has hinted it wants to concentrate on identifying prospects in the same play type as Sea Lion and has outlined a fan sandstone play fairway in the eastern flank.
The fan sandstones can only be fully identified in 3-D data and currently Desire has 3-D coverage for only half of this fairway on its acreage, the company said in a news release.
"Desire believes that it is essential that it acquires and processes new 3D seismic data as quickly as possible in order to fully understand the potential of this play," it said.
The company said it had received tenders for a 3-D seismic survey and intended to award a contract in the near future. The company is also in contact with other oil operators in the North Falklands Basin to mount a joint seismic program.
The U.K. company, listed on the Alternative Investment Market, said it raised $36 million through pound sterling share placements to enable it to continue with scientific research and identify more lucrative oil deposits than those previously drilled.
So far Desire has been less successful than Rockhopper in locating hydrocarbons that will give its shareholders much needed returns on their investments.
The frenetic quest for oil in the North Falkland Basin in the South Atlantic waters east of South American mainland began last year amid predictions the deep-water reserves could rival those in the North Sea or even some reserves in Saudi Arabia.
The results so far have been modest but haven't calmed Argentina, which claims the British Overseas Territory is London's colonial outpost and Buenos Aires is the rightful owner. Bearing the same claim, an Argentine military junta invaded the islands in 1982 but was beaten back, with the loss of more than 1,000 lives.
Despite a formal surrender to the British military, Argentina didn't relinquish the claim pursued by its defeated dictators and launched a vigorous international campaign to oppose the islands' current status as a British Overseas Territory.
Argentina's claim has had mixed results on the diplomatic front. Argentine President Cristina Fernandez de Kirchner launched further tirades against Britain and the United Nations last week -- the latter for continuing to insist the dispute needs to be resolved bilaterally by Argentina and Britain.
Desire Petroleum was unfazed by the latest Argentine pronouncements at the United Nations. The company said it would use the additional funds to acquire and process further 3-D seismic images of sea waters under its license, on the east flank of the North Falkland Basin, in Tranches D and F.
Another British company active in the area, Rockhopper Exploration, made what it considers a significant discovery of hydrocarbons called Sea Lion earlier this year.
Since that discovery, Desire has hinted it wants to concentrate on identifying prospects in the same play type as Sea Lion and has outlined a fan sandstone play fairway in the eastern flank.
The fan sandstones can only be fully identified in 3-D data and currently Desire has 3-D coverage for only half of this fairway on its acreage, the company said in a news release.
"Desire believes that it is essential that it acquires and processes new 3D seismic data as quickly as possible in order to fully understand the potential of this play," it said.
The company said it had received tenders for a 3-D seismic survey and intended to award a contract in the near future. The company is also in contact with other oil operators in the North Falklands Basin to mount a joint seismic program.
September 27, 2010 - FALKLAND ISLANDS/MALVINAS: Oil company has second go at Falklands drilling (ARGENTINA)
Source: Malvern Gazette
Source: Malvern Gazette
AN oil company based in Mathon has embarked on the second stage of a drilling programme aimed at billions of dollars of oil off the Falkland Islands.
Desire Petroleum, which was founded by the late Dr Colin Phipps and is now chaired by his son Stephen, has also placed 16 million-odd shares to raise £22.8m for 3D seismic surveys into further prospective drill sites.
Desire, which is registered to Mathon and has an office in London, began drilling in February off the Ocean Guardian rig amid an international row between the UK and Argentina - which claims sovereignty over the islands. As the spat escalated, Argentina brought in controls on all ships passing through its waters in an attempt to blockade the South Atlantic archipelago.
The latest round of drilling began on the 2,850 metre Rachel prospect on Monday afternoon (September 27) and is expected to last for 35 days.
On Friday (September 24) the company placed new shares at 140p each in order to fund the “essential” acquisition and processing of 3D data of a further site along the eastern flank of the North Falkland Basin (NFB).
Discussions are also underway between Desire and other NFB oil operators regarding a joint seismic programme to mitigate the extensive costs of such an operation.
“Because it’s so expensive to get a rig or any form of vessel down there and back it’s better if you share the mobilisation and demobilisation with companies in the north,” said Mr Phipps.
It is expected the seismic programme will begin in December.
Desire Petroleum, which was founded by the late Dr Colin Phipps and is now chaired by his son Stephen, has also placed 16 million-odd shares to raise £22.8m for 3D seismic surveys into further prospective drill sites.
Desire, which is registered to Mathon and has an office in London, began drilling in February off the Ocean Guardian rig amid an international row between the UK and Argentina - which claims sovereignty over the islands. As the spat escalated, Argentina brought in controls on all ships passing through its waters in an attempt to blockade the South Atlantic archipelago.
The latest round of drilling began on the 2,850 metre Rachel prospect on Monday afternoon (September 27) and is expected to last for 35 days.
On Friday (September 24) the company placed new shares at 140p each in order to fund the “essential” acquisition and processing of 3D data of a further site along the eastern flank of the North Falkland Basin (NFB).
Discussions are also underway between Desire and other NFB oil operators regarding a joint seismic programme to mitigate the extensive costs of such an operation.
“Because it’s so expensive to get a rig or any form of vessel down there and back it’s better if you share the mobilisation and demobilisation with companies in the north,” said Mr Phipps.
It is expected the seismic programme will begin in December.
September 28, 2010 - FALKLAND ISLANDS/MALVINAS: UK's Falkland Oil shares slump as partner BHP Billiton pulls out (ARGENTINA)
Source: Platts
Source: Platts
UK-based Falkland Oil and Gas Limited's shares slumped Tuesday after the company announced its major exploration partner BHP Billiton was pulling out of their license area to the south of the Falkland Islands.
BHP Billiton has told FOGL it does not intend to take part in the second phase of exploration work on the southern license area, which is due to start in December this year, FOGL said in a statement.
FOGL, however, said it believed the area was "still prospective," and that it would take a 100% interest in the blocks after BHP Billiton returns its 51% stake.
The next phase of work in the southern basin involves drilling a single well by December 2015.
The reassignment of BHP Billiton's interest to FOGL and the transfer of operatorship of the license area from one company to the other still require the approval of the Falkland Islands government.
FOGL's shares in London were down 26% at GBP1.1575 ($1.83) at 0858 GMT.
The company also announced Tuesday that it had been granted a one-year extension of its exploration licenses in the northern Falkland Basin after being unable to meet drilling commitments because of a tight rig market.
Under the existing license terms, FOGL was meant to have started the next phase of its drilling program in 2010, but the company said it was "increasingly unlikely" that this would happen.
The Falkland Islands government has agreed to extend the licenses by one year so that they now expire on December 15, 2011.
Earlier this month FOGL announced a successful flow test of oil from its Sea Lion discovery in the northern Falkland basin, the first significant oil find off the UK's Falkland Islands, whose sovereignty is disputed by Argentina.
BHP Billiton has told FOGL it does not intend to take part in the second phase of exploration work on the southern license area, which is due to start in December this year, FOGL said in a statement.
FOGL, however, said it believed the area was "still prospective," and that it would take a 100% interest in the blocks after BHP Billiton returns its 51% stake.
The next phase of work in the southern basin involves drilling a single well by December 2015.
The reassignment of BHP Billiton's interest to FOGL and the transfer of operatorship of the license area from one company to the other still require the approval of the Falkland Islands government.
FOGL's shares in London were down 26% at GBP1.1575 ($1.83) at 0858 GMT.
The company also announced Tuesday that it had been granted a one-year extension of its exploration licenses in the northern Falkland Basin after being unable to meet drilling commitments because of a tight rig market.
Under the existing license terms, FOGL was meant to have started the next phase of its drilling program in 2010, but the company said it was "increasingly unlikely" that this would happen.
The Falkland Islands government has agreed to extend the licenses by one year so that they now expire on December 15, 2011.
Earlier this month FOGL announced a successful flow test of oil from its Sea Lion discovery in the northern Falkland basin, the first significant oil find off the UK's Falkland Islands, whose sovereignty is disputed by Argentina.
September 29, 2010 - LA PAZ: Total Aims to Boost Gas Production in Bolivia (BOLIVIA)
Source: Latin American Herald
French oil major Total says it plans to raise its investment in Bolivia to achieve production of 6 million cubic meters (211.5 million cubic feet) of natural gas per day at the Itau field.Total’s exploration and production director, Yves Louis Derricarrere, announced that target for Itau, which is 75 percent owned by Total and 25 percent owned by BG Group and is due to come online in January with output of 1.5 million cmd.Derricarrere and other company executives met Tuesday with Bolivian President Evo Morales.“We’ve had talks with President Morales to present different projects through which we want to continue investing in this country,” the official ABI news agency quoted Derricarrere as saying.Total, operating alone or in partnership with other energy companies, participates in 60 percent of Bolivia’s overall gas production, which exceeds 40 million cmd.State-owned energy firm Yacimientos Petroliferos Fiscales Bolivianos said in a report that on Jan. 1, 2011, Itau will begin producing 1.5 million cmd of gas and 1,060 barrels of condensate.Itau’s natural gas output is due to rise to 3.5 million cmd and 5 million cmd in 2013 and 2015, respectively, YPFB said. EFE
September 29, 2010 - LA PAZ: Energy Solutions signs contract with TBG for PipelineTransporter (BOLIVIA)
Source: Trading Markets
Source: Trading Markets
Energy Solutions International, a supplier of software solutions for oil and gas pipelines, signed a contract with Transportadora Brasileira Gasoduto Bolivia-Brasil or TBG, to roll out the latest version of PipelineTransporter to manage of TBG's transportation contracts, as well as their nominations and allocations processes.
The 2,593km pipeline transports natural gas from the Bolivia-Brazil border, through five Brazilian states, delivering gas to many key consumers including the cities of Rio de Janeiro and Sao Paulo. TBG holds transportation contracts with the Brazilian gas trading shipper, Petrobras, delivering the gas in local city gates.
Maria Santos, operations manager at TBG, said: "PipelineTransporter is an integral part of the gas transportation business of TBG, and we are very excited about upgrading to its newest version."
The 2,593km pipeline transports natural gas from the Bolivia-Brazil border, through five Brazilian states, delivering gas to many key consumers including the cities of Rio de Janeiro and Sao Paulo. TBG holds transportation contracts with the Brazilian gas trading shipper, Petrobras, delivering the gas in local city gates.
Maria Santos, operations manager at TBG, said: "PipelineTransporter is an integral part of the gas transportation business of TBG, and we are very excited about upgrading to its newest version."
September 29, 2010 - LA PAZ: Bolivian Farmers Occupy Power Plant (BOLIVIA)
Source: Latin american Herald
Source: Latin american Herald
Peasants from the Bolivian town of Zongo, 50 kilometers (31 miles) north of La Paz, occupied a power plant, interrupting the supply of electricity to three major cities, media outlets said.Television channels reported that about 200 farmers from Zongo took over the COBEE plant, owned by the Israeli firm Inkia Holdings, to demand payment of a royalty for the use of local water sources.The peasants diverted the flow of the water to the plant, affecting its electricity output and causing power outages in several cities including La Paz, El Alto and Potosi.This hydroelectric plant and the one at Miguillas, which is also operated by COBEE, together generate about 220 megawatts, or about 24 percent of Bolivia’s electricity.The interior ministry said in a communique that Deputy Minister Marcos Farfan, a prosecutor and 160 police officers were sent to Zongo to “guarantee the functioning of the electrical energy generators.”The administration warned that “under no circumstances will the restriction of basic services be permitted,” given that such services were acknowledged as public rights under the 2009 constitution.The government added in its statement on the matter that the cutoff of basic services “constitutes a serious crime, as a result of which appropriate action will be taken to punish those responsible for any measure against the interests of the public.”
September 29, 2010 - BRASILIA: Petrobras to Perform In Line (BRAZIL)
Source: ZACKS
We are maintaining our Neutral recommendation on Petroleo Brasileiro S.A. or Petrobras (PBR - Analyst Report) ADRs with a target price of $38.
We believe that continued demand growth in Brazil (expected to outperform developed countries in the next few years), together with all the new investments and acquisitions, will fuel Petrobras’ medium-term earnings outlook. Additionally, we expect the company to benefit from its expertise in deep-water operations, its huge recent discoveries (that could double its resource base) and the growing domestic refined products market.
However, we are concerned about the significant increase in its downstream investment level in the face of a bearish refining margin outlook. Investor skepticism regarding the company’s huge investment requirements, as well as the possibility of heightened state interference and earnings dilution following the $70 billion share sale, also remains near-term headwinds, in our view. Consequently, we do not anticipate a significant upside in the near future and expect the stock to perform in line with the broader market.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s activities include: the exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
We believe that continued demand growth in Brazil (expected to outperform developed countries in the next few years), together with all the new investments and acquisitions, will fuel Petrobras’ medium-term earnings outlook. Additionally, we expect the company to benefit from its expertise in deep-water operations, its huge recent discoveries (that could double its resource base) and the growing domestic refined products market.
However, we are concerned about the significant increase in its downstream investment level in the face of a bearish refining margin outlook. Investor skepticism regarding the company’s huge investment requirements, as well as the possibility of heightened state interference and earnings dilution following the $70 billion share sale, also remains near-term headwinds, in our view. Consequently, we do not anticipate a significant upside in the near future and expect the stock to perform in line with the broader market.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s activities include: the exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
September 28, 2010 - BRASILIA: Brazilian government boosting Petrobras stake to 64 percent (BRAZIL)
Source: PETROLEUMWORLD.
Source: PETROLEUMWORLD.
Brazil's President Luiz Inacio Lula da Silva gestures as he speaks at Brazilian state oil company Petrobras' share offering ceremony in Sao Paulo September 24, 2010.
The Brazilian government will boost its stake in oil giant Petrobras to 64 percent of the common stock following a massive share offering, the firm disclosed Tuesday.
A regulatory filing with the US Securities and Exchange Commission said the Brazilian state and other government entities exercised rights as existing shareholders to buy shares in a huge offering expected to raise as much as 70 billion dollars.
It said the Brazilian federal government, the biggest shareholder, as well the Brazilian sovereign wealth fund, agreed to purchase a total of 1.8 billion common shares and 994 million preferred shares in the offering.
"In the aggregate, the Brazilian federal government and these entities will own approximately 64 percent of our common shares and 48 percent of our total outstanding shares after the offering," the document said.
The offering has made Petrobras the third largest oil company in the world after US-based ExxonMobil and PetroChina, by market capitalization.
Petrobras is to use the proceeds from the share sale to explore offshore oil fields, which are so big they could make Brazil a major exporter of crude.
The company wants to boost capital expenditure over the next five years to 224 billion dollars to exploit the newly-discovered reserves.
Petrobras estimates the so-called subsalt fields could more than triple existing proven oil reserves of 14 billion barrels.
The Brazilian government will boost its stake in oil giant Petrobras to 64 percent of the common stock following a massive share offering, the firm disclosed Tuesday.
A regulatory filing with the US Securities and Exchange Commission said the Brazilian state and other government entities exercised rights as existing shareholders to buy shares in a huge offering expected to raise as much as 70 billion dollars.
It said the Brazilian federal government, the biggest shareholder, as well the Brazilian sovereign wealth fund, agreed to purchase a total of 1.8 billion common shares and 994 million preferred shares in the offering.
"In the aggregate, the Brazilian federal government and these entities will own approximately 64 percent of our common shares and 48 percent of our total outstanding shares after the offering," the document said.
The offering has made Petrobras the third largest oil company in the world after US-based ExxonMobil and PetroChina, by market capitalization.
Petrobras is to use the proceeds from the share sale to explore offshore oil fields, which are so big they could make Brazil a major exporter of crude.
The company wants to boost capital expenditure over the next five years to 224 billion dollars to exploit the newly-discovered reserves.
Petrobras estimates the so-called subsalt fields could more than triple existing proven oil reserves of 14 billion barrels.
September 29, 2010 - BRASILIA: Government to buy 2/3 of Petrobras offer (BRAZIL)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Brazil's government, through its sovereign wealth fund and other state entities, agreed to buy nearly two-thirds of the shares in Petrobras as part of the company's massive $70 billion offering that was sealed last week.
News wires 28 September 2010 18:15 GMT
The sovereign fund, state development bank BNDES and the National Treasury committed to buy about 2.8 billion shares of the 4.27 billion offered, Petrobras said in a statement today.
Brazilian state entities placed bids for 1.81 billion voting shares, or 76%t of the total, and 994.9 million preferred shares, about 66% of the volume, Reuters reported.
Petrobras raised 120.25 billion reais ($70.52 billion) on 23 September in the world's biggest share offering.
Petrobras preferred shares, its most widely traded class of stock, were up 0.91% in mid-afternoon trading in Sao Paulo, while the voting shares were down 0.1%.
News wires 28 September 2010 18:15 GMT
The sovereign fund, state development bank BNDES and the National Treasury committed to buy about 2.8 billion shares of the 4.27 billion offered, Petrobras said in a statement today.
Brazilian state entities placed bids for 1.81 billion voting shares, or 76%t of the total, and 994.9 million preferred shares, about 66% of the volume, Reuters reported.
Petrobras raised 120.25 billion reais ($70.52 billion) on 23 September in the world's biggest share offering.
Petrobras preferred shares, its most widely traded class of stock, were up 0.91% in mid-afternoon trading in Sao Paulo, while the voting shares were down 0.1%.
September 30, 2010 - BRASILIA: Shell hits pay in Santos basin (BRAZIL)
Source: UPSTREAMONLINE
Shell is 80% stake holder in the concession, with Total of France as partner.
The block lies 200 kilometres (125 miles) off the coast of Rio de Janeiro state and the well is being drilled 2 kilometres below the ocean surface.
The company said it would continue drilling to 6 kilometres, after which it will conduct an analysis of the flow and seismic data from the well, Reuters reported.
Brazil's pre-salt reserves, revealed in 2007, are estimated to hold upwards of 50 billion barrels
The company said it would continue drilling to 6 kilometres, after which it will conduct an analysis of the flow and seismic data from the well, Reuters reported.
Brazil's pre-salt reserves, revealed in 2007, are estimated to hold upwards of 50 billion barrels
September 30, 2010 - BRASILIA: Brazil's elections: No big deal to foreign investors (BRAZIL)
Source: PETROLEUMWORLD
Source: PETROLEUMWORLD
It's an exciting week in Brazil. Petrobras' historic $67 billion public offering closes today. News of the Brazilian government boosting its stake in Petrobras irked some minority investors who called it “reverse privatization.” Next up: On October 3 Dilma Rousseff will likely win next week's presidential elections, despite being embroiled in a corruption scandal that caused a hiccup on her lead at the polls for the first time in months.
Some Brazilians are apprehensive of what the continuation of a Lula administration could mean. One insider in the Brazilian Development Bank, BNDES , told me he was personally dissuaded from investing in Petrobras after the government's stake in the company grew.
None of this political frenzy seems to be fazing foreign investors who have continued to bet big on Brazil over the last few months.
“Things have been very active in Brazil,” says Marcello Hallake , a partner with Thompson & Knight LLP who has represented Petrobras in connection with M&A transactions. “It is probably the first time that the elections have not been a factor affecting businesses.”
Some of the latest business buzz in Brazil:
In August private equity powerhouse Carlyle Group, whose managing director David Rubenstein is a staple in the Forbes 400 since 2007, announced a “significant investment” in Scalina, the largest hosiery and lingerie manufacturer in Brazil. Carlyle said that “in the last five years the lingerie and hosiery sector in Brazil has grown at nearly double the rate of GDP.” The Carlyle Group is already invested in CVC S.A. the largest tour operator in Latin America; Qualicorp, a health care company; and Scopel, a São Paulo-based real estate developer.
Sam Zell , another U.S. billionaire highly vested in Brazil, has been growing his stakes in the country for years. These days over half of his Equity International portfolio is invested there in businesses like retail property company BR Mall and home builder Gafisa (NYSE:GFA).
In July Zell told me that he'll be content with whoever wins Brazil's presidential election — whether it's more centrist José Serra or leftist Dilma Rousseff: “Both [candidates] endorse Lula's approach, which is socially liberal and economically conservative.” Zell acknowledged that there are “challenges” to going to an emerging market but “when it's all said and done, you have to look at where growth opportunities are, you have to look at how countries like Brazil are changing and are becoming more transparent and more predictable and therefore more attractive.”
The markets are following his logic. Over the last month large public companies across industries have continued to climb the market, including Petrobras, whose stock is up by 10% over the last month and about 5% since the beginning of the year.
A Goldman Sachs report released this week reiterated investors' enthusiasm in the country, noting “Bullishness on business prospects. Exceptions concerned competition, not markets overall.”
Among the companies expanding their growth in Brazil:
Last week Minneapolis-based Cargill Inc. announced it will buy the Brazilian tomato-product unit of Unilever for about $350 million, citing its “long-term commitment” to growing its business in Brazil.
In June, IBM announced that it's opening a new research lab in Brazil, stating that “the choice of Brazil for the newest IBM Research Lab is the reflection of the big growth opportunity we have seen here.”
Earlier this year, GE announced that it would open its first factory in Brazil as part of its commitment to Brazil and Latin America.
So should foreign investors concern themselves with the upcoming elections?
I asked this question to Reginaldo Arcuri , president of the Brazilian Agency for Industrial Development, who was speaking last week in Washington, D.C. at the US-Brazil Innovation Summit, hosted at Georgetown University.
“Absolutely not,” he said. “We are sure that not only the macro economic standards will be continuing but also that the investment flow will keep more or less the same for the next year, even a little better.”
He added that the government's boosted stake in Petrobras was necessary for the company's exploratory efforts: “The fact that the government has x% of a company like Petrobras in the end means nothing,” said Arcuri. “What really counts for shareholders is the quality of the management and this quality is proven. So I don't see any reason for complaints.”
Some Brazilians are apprehensive of what the continuation of a Lula administration could mean. One insider in the Brazilian Development Bank, BNDES , told me he was personally dissuaded from investing in Petrobras after the government's stake in the company grew.
None of this political frenzy seems to be fazing foreign investors who have continued to bet big on Brazil over the last few months.
“Things have been very active in Brazil,” says Marcello Hallake , a partner with Thompson & Knight LLP who has represented Petrobras in connection with M&A transactions. “It is probably the first time that the elections have not been a factor affecting businesses.”
Some of the latest business buzz in Brazil:
In August private equity powerhouse Carlyle Group, whose managing director David Rubenstein is a staple in the Forbes 400 since 2007, announced a “significant investment” in Scalina, the largest hosiery and lingerie manufacturer in Brazil. Carlyle said that “in the last five years the lingerie and hosiery sector in Brazil has grown at nearly double the rate of GDP.” The Carlyle Group is already invested in CVC S.A. the largest tour operator in Latin America; Qualicorp, a health care company; and Scopel, a São Paulo-based real estate developer.
Sam Zell , another U.S. billionaire highly vested in Brazil, has been growing his stakes in the country for years. These days over half of his Equity International portfolio is invested there in businesses like retail property company BR Mall and home builder Gafisa (NYSE:GFA).
In July Zell told me that he'll be content with whoever wins Brazil's presidential election — whether it's more centrist José Serra or leftist Dilma Rousseff: “Both [candidates] endorse Lula's approach, which is socially liberal and economically conservative.” Zell acknowledged that there are “challenges” to going to an emerging market but “when it's all said and done, you have to look at where growth opportunities are, you have to look at how countries like Brazil are changing and are becoming more transparent and more predictable and therefore more attractive.”
The markets are following his logic. Over the last month large public companies across industries have continued to climb the market, including Petrobras, whose stock is up by 10% over the last month and about 5% since the beginning of the year.
A Goldman Sachs report released this week reiterated investors' enthusiasm in the country, noting “Bullishness on business prospects. Exceptions concerned competition, not markets overall.”
Among the companies expanding their growth in Brazil:
Last week Minneapolis-based Cargill Inc. announced it will buy the Brazilian tomato-product unit of Unilever for about $350 million, citing its “long-term commitment” to growing its business in Brazil.
In June, IBM announced that it's opening a new research lab in Brazil, stating that “the choice of Brazil for the newest IBM Research Lab is the reflection of the big growth opportunity we have seen here.”
Earlier this year, GE announced that it would open its first factory in Brazil as part of its commitment to Brazil and Latin America.
So should foreign investors concern themselves with the upcoming elections?
I asked this question to Reginaldo Arcuri , president of the Brazilian Agency for Industrial Development, who was speaking last week in Washington, D.C. at the US-Brazil Innovation Summit, hosted at Georgetown University.
“Absolutely not,” he said. “We are sure that not only the macro economic standards will be continuing but also that the investment flow will keep more or less the same for the next year, even a little better.”
He added that the government's boosted stake in Petrobras was necessary for the company's exploratory efforts: “The fact that the government has x% of a company like Petrobras in the end means nothing,” said Arcuri. “What really counts for shareholders is the quality of the management and this quality is proven. So I don't see any reason for complaints.”
September 29, 2010 - BRASILIA: Eletrobras to bid on 1.8GW Teles Pires hydro plant - (BRAZIL)
Source: Business News Americas
Source: Business News Americas
Brazilian state-run utility Eletrobras (NYSE: EBR) will take part in the upcoming auction for Brazil's 1.82GW Teles Pires hydro project, a spokesperson for the company told BNamericas.
The hydro plant is planned for the Teles Pires river between the states of Mato Grosso and Para.
Brazilian federal energy planning company EPE said national environmental regulator Ibama had recently approved an EIS for the project.
The region does not present natural obstacles that could hinder the project, EPE previously said in a statement, adding that there are no conservation and indigenous land protection units in the direct area.
Eletrobras did not specify which of its subsidiaries would take part in the auction, although Furnas, Chesf and Eletronorte would be the most probable ones.
Teles Pires is set to be included in the A-5 new power auction to be held by the government at the end of the year.
The hydro plant is planned for the Teles Pires river between the states of Mato Grosso and Para.
Brazilian federal energy planning company EPE said national environmental regulator Ibama had recently approved an EIS for the project.
The region does not present natural obstacles that could hinder the project, EPE previously said in a statement, adding that there are no conservation and indigenous land protection units in the direct area.
Eletrobras did not specify which of its subsidiaries would take part in the auction, although Furnas, Chesf and Eletronorte would be the most probable ones.
Teles Pires is set to be included in the A-5 new power auction to be held by the government at the end of the year.
September 29, 2010 - BRASILIA: Brazil's OSX Gets $420 Million Loan From European Banks For Platform (BRAZIL)
Source: NASDAQ
Source: NASDAQ
Brazilian oilfield services company OSX Brasil SA (OSXB3.BR) has obtained a $420 million loan to finance its purchase of the company's first offshore oil production platform, the company said Thursday.OSX will pay 425 basis points over the London interbank overnight rate, or Libor, for the eight-year term of the loan, the company said in a regulatory filing.The floating production, storage and offloading vessel, or FPSO, will be the leased for 20 years to sister company OGX Petroleo e Gas Participacoes SA ( OGXPY, OGXP3.BR), producing the first oil for billionaire Brazilian businessman Eike Batista's independent driller in mid-2011.OGX will pay OSX a day rate of $263,000 to lease the vessel. Both OGX and OSX are controlled by Batista.The FPSO, dubbed "OSX-1," will be installed in the Campos Basin at OGX's Waimea prospect, OSX officials said earlier this month. The "OSX-1" is being readied in Singapore dockyards. The converted oil tanker will have the capacity to produce 100,000 barrels a day.OSX will also complete bidding for a second FPSO, "OSX-2" in October, with delivery expected in 2013, company officials said.Norway's DVB Bank led the loan syndicate, which included Credit Agricole, Eksportfinans, GIEK, ING Bank, Santander and ABN Amro, OSX said.
September 30, 2010 - BRASILIA: Brazil's Big Oil Play: How This Nation is Charting National Energy Security (BRAZIL)
Source: Journal of Energy Security
Source: Journal of Energy Security
Brazil first stumbled upon its hydrocarbon fortunes on the road toward energy security by discovering its mammoth “pre-salt” oil reserves back in 2006. The expression 'pre-salt' makes reference to an aggregation of rocks located offshore in a large portion of the Brazilian coast and with potential to generate and accumulate oil. For decades successive Brazilian governments have taken great efforts to find hydrocarbons, lower oil imports, and develop a national market for sugarcane based ethanol as a transportation fuel substitute. Indeed, by the end of President Luis Inácio Lula da Silva’s first term in office (2003-2006)
it was evident that Brazil had significantly achieved transportation fuel security by boosting petroleum and ethanol production in tandem with the rollout of a new flex-fuel passenger vehicle fleet. As luck would have it, these national efforts have been underscored with the recent discovery of remarkable pre-salt oil and gas reserves. Today, Brazil’s new-found hydrocarbon bonanza promises to rapidly increase oil and gas production, fuel a national drive toward economic and social development, and swell the country’s geopolitical weight around the world.
Petrobras, Brazil’s state controlled and publicly traded energy company, found its new oil and gas treasures in cooperation with a consortium of oil and gas companies to prospect deepwater oil in the Tupi fields of the Santos basin near the State of São Paulo.
Exploratory drilling occurred in the Paratí prospect on bloc BM-S-10 and eventually found condensate gas in the pre-salt layer some 5,000 meters below the waterline. A second prospect was drilled in the BM-S-11 bloc where Petrobras discovered a massive reservoir of 5-8 billion barrels of oil equivalent (boe). Since then, pre-salt reservoirs have been prospected throughout the Santos and Campos basins. Today, Petrobras is working alongside Anadarko, Devon, Exxon-Mobil, BG group, Petrogal, Reposol, Shell, and UK Gas Company to prospect and produce oil and gas from these immense reserves.
For example, in June of this year Petrobras, working in partnership with Reposol, discovered light crude in the pre-salt layer of the Albacora Leste field of the Campos basin some 130 kilometers offshore from Rio de Janeiro. In July, Petrobras opened up production of the Baleia Branca pre-salt field some 85 kilometers offshore from the state of Espirito Santo which could produce 20,000 barrels by the end of the year. The United States Energy Information Administration (EIA) forecasts that the pre-salt reserves could add over 50 billion barrels to Brazil’s proven reserves while others estimate much more. All agree that Brazil is sitting on a treasure of hydrocarbons that could lead the country to become one of the most important oil producers in the world during the coming decade. Already Petrobras, Exxon-Mobil, Anadarko, and Reposol are producing from the pre-salt fields to boost overall national production from 2.4 mbd in 2008 to over 2.8 mbd by the end of this year. According to Petrobras’ business plan for the period of 2010 to 2014, the firm will invest $224 billion of which 53 percent will be devoted to exploration and production, most of it in the pre-salt reservoirs. The company’s production goals include 3.9 million boe by 2014, rising to 5.4 million by 2020. Brazil will likely become one of the top five producers of hydrocarbons by the end of the decade if these goals are reached.The drive towards transportation fuel security
Under the banner “O petroleo é nosso!” the Brazilian government of President Getúlio Vargas created Petrobras in 1953 to undertake a drive toward oil self-sufficiency. Petrobras worked to guarantee retail supplies of transportation fuels and lubricants to all regions of Brazil during the first two decades of operations. Consequently, the company focused on building refinery capacity for oil imported from the Middle East. The oil shocks of the 1970s convinced most Brazilian policymakers that their country’s dependence on petroleum imports jeopardized national development and security. Hence, Petrobras doubled up on efforts to discover hydrocarbon reserves in Brazil while the military government established the National Alcohol Program (PROALCOOL) to subsidize and standardize national production of ethanol fuel from sugarcane to supplant production and supplies of transport fuels.
Although the company began searching for offshore reserves as early as 1968 near the coast of Sergipe, it was not until 1974 that it found the Campos reserves off the coast of Rio de Janeiro, the largest discovered until the pre-salt reserves. Petrobras’ discoveries in the Campos basin allowed Brazil to implement policies and programs developed to set a solid public-private foundation for petrochemical and ethanol production to curtail the nation’s dependence on imports of petroleum and its derivatives. For example, in 1975 the federal government took advantage of declining world sugar prices to launch the PROALCOOL program to provide tax incentives, credits, and infrastructure to sugarcane and ethanol producers. Between 1975 and 1985 domestic ethanol production quadrupled.
According to Sennes and Narciso, such concerted efforts to find hydrocarbons, produce ethanol, and displace imports in the 1970s were not merely the case of adjusting the national economy to the international price shock; it was also an effort to render the development and security strategy sustainable within an increasingly hostile international environment where energy was vital. So crucial was the country’s strategy of development and industrialization considered for national security that it justified a thorough political, financial, institutional, and technological mobilization (see Sennes, Ricardo Ubiraci and Thais Narciso. “Brazil as an International Energy Player,” in Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy. Edited by Lael Brainard and Leonardo Martinez-Diaz. Brookings Institution Press. 2009:17-54).”If the OPEC oil shocks of the 1970s reinforced Brazil’s defensive imperative to lessen energy imports, then it was the partial privatization of Petrobras in 1997 that replaced the state controlled import substitution strategy with a more balanced, entrepreneurial approach that sought greater private and foreign investment, technology transfer, and production efficiencies. The campaign to liberalize Brazilian production, through the partial privatization of Petrobras and the concurrent formation of a concessionary policy framework for hydrocarbon exploration and production, caused the favorable conditions which led to the pre-salt discoveries less than a decade later. Under the 1997 Petroleum Law, Brazil’s proven reserves of oil and gas grew by 40 percent, investment rose from $4 to $25 billion per year, production doubled in the proceeding decade, and the petroleum sector’s importance to overall Gross Domestic Product (GDP) expanded from two to ten percent.
Just two decades ago Brazil purchased over 40 percent of its energy abroad. In 1999 Brazil imported 24.1 percent of its total energy consumption, including 34.5 percent of its petroleum use. By 2008 the nation had reduced its external energy dependence to 8.3 percent, achieved self-sufficiency in crude oil production, and was the world’s largest exporter of ethanol. Between 2005 and 2009, petroleum production rose from just over two million barrels per day to nearly 2.6 million, and ethanol production grew from nearly 4.2 million gallons to over 7 million gallons. With transportation fuel security at hand, the Brazilian government is tasked with developing a policy framework that doubles production of oil and gas while projecting the country’s hydrocarbon power toward the commanding heights of the global political economy
Policy, production, and power
In August of 2009 President Lula introduced four distinct but integrated legislative initiatives to maximize state control over the pre-salt reserves. The proposed regime includes four key strategic pillars:
1) establishing a production sharing regime for the nation’s new found “strategic” oil reserves;
2) strengthening Petrobras' stake in the new hydrocarbon wealth;
3) creating a new state controlled company, Pré-Sal Petróleo, S.A or “Petrosal”, to administer the Production Sharing Agreements (PSAs) and commercialize the state’s portion of the profit oil earned from each PSA; and
4) setting up a new Social Fund to administer the wealth generated by Petrosal’s stake in the PSAs.
This new production framework is designed to replace the concessionary model in place since 1997 for those blocs denominated “strategic” by the National Agency of Petroleum, Natural Gas, and Biofuels (known as the ANP). The proposed production sharing regime falls short of completely renationalizing oil and gas exploration and production, but the roles of both Petrobras’ and Petrosal should provide the Brazilian state with ample control over the nation’s hydrocarbon resources. Petrobras serves as the corporate cornerstone of the Lula government’s strategy to leverage the pre-salt reserves into the fuel of national development and geopolitical power. Under the proposed policy framework, the National Council for Energy Policy (CNPE) would continue to formulate national energy policy, but the ANP would be authorized to identify strategic blocs from the pre-salt reservoirs and award them directly to Petrobras or to consortia with at least a thirty percent stake reserved for Petrobras. The Brazilian state, represented by Petrosal, would also participate in all strategic bloc awards without making any investment. Therefore, the government will exercise control over exploration and production of the pre-salt reserves through its majority 51 percent ownership of voting shares in Petrobras and sole ownership of Petrosal.
The government’s gamble to place Petrobras at the center-stage of the national efforts to exploit the pre-salt reserves comes after the company’s widely recognized success in developing competitive advantages in deep water exploration and drilling. The company is one of the world’s most successful oil companies—among both state and privately owned companies—in terms of increases in reserves and production, technical capacity (particularly in exploration, development and production of offshore and deep offshore reserves) and development of international projects.” (Isbell, Paul."Energy and Geopolitics in Latin America," Real Instituto Elcano, Working Paper December 2008).
According to Petrobras’ Director of Exploration and Production, Guilherme Estrella, the company’s success and discovery of the pre-salt reservoirs, "is the result of five decades of exploration investments of Petrobrás, which resulted in a growing knowledge of Brazilian sedimentary basins. It reflects, too, the focus on the development of technologies, analytical procedures and innovative solutions in exploratory processes, particularly seismic and drilling of wells and the increased willingness of Petrobras for exploration risks.” (ibid)These competitive advantages in deep water drilling were confirmed by the results of the 2007 ANP auction of the eleven blocs associated with the pre-salt reserves located in the Cluster region of the Santos basin. Petrobras participated in every winning consortium, leading with over a 60 percent stake in nine of these blocs and holding 40 and 45 percent stakes in the remaining two. Therefore, it is not surprising that the Lula administration’s proposals would mandate Petrobras as the sole operator with a minimum 30 percent stake in all strategic blocs. Under the new regime, ANP will administer public auctions of the strategic reserves to consortia with at least 30 percent Petrobras participation or opt to directly award an exclusive PSA to the state controlled firm. Thus, the ANP determines under which conditions participating private sector or foreign state owned enterprises (SOEs) will be allowed to invest and apply their technological and managerial capacities in partnership with Petrobras. Petrobras does face significant hurdles to successfully exercise its operational control under the proposed PSA regime, including the need for a constant flow of capital to fully exploit the ultra-deepwater pre-salt reserves. On June 30, 2010 President Lula signed one of the key pre-salt proposals into law which allows for the transfer of rights to five billion boe from the pre-salt fields to Petrobras in return for the recently negotiated $42.5 billion worth of company shares. This completed deal now sets up Petrobras’ impending public stock issue which could raise some $75 billion depending on how investors gauge the company’s falling stock price and the politics surrounding the pre-salt production. Although bullish on Petrobras, it reminds investors of the increasing risks associated with the government’s control of the company and the 25-30 percent stock price dive in the past year. Politics have certainly challenged Petrobras and slowed complete passage of the new regulatory framework as the producing states of Espirito Santo, Rio de Janeiro, and São Paulo duel with the non-producing states over the distribution of rents and royalties. However, the probable victory of President Lula’s hand picked successor, Dilma Rousseff of the Workers Party, in October’s presidential election should encourage full congressional passage of the PSA regime and a rebound of Petrobras’ share price in early 2011. These probable outcomes will provide Brazil with state control over the nation’s hydrocarbon resources and one of the largest oil and gas companies of the world, providing future governments the revenues and tools for accelerating national development and projecting geopolitical power for decades to come. The country’s hydrocarbon inheritance permits Brazil to make a critical contribution to regional energy security in South America and to become a stable supplier of crude oil and transportation fuels around the world, including the United States. Currently, Brazil is the second largest oil producer in South America, but it is expected to surpass Venezuela in the coming years as increasing numbers of pre-salt blocs come onto production. The United States imports approximately 60 percent of Brazil’s current oil exports, with volumes expected to rise in the next decade. Indeed, if bilateral biofuel cooperation expands in the coming years it is possible that Brazil would play a growing role in meeting the rising demand for ethanol in the US. Brazil’s capacity to increase production and exports of oil, gas, petrochemicals, and ethanol in the coming decades will likely lead to greater economic interdependence with its neighbors in South America, providing a stronger political stage for projecting national power through multilateral forums and international governmental organizations, including the Organization of Petroleum Exporting States (OPEC), the Organization of American States (OAS), and the United Nations Security Council. The Brazilian state’s control over hydrocarbons is likely to place the nation in an “advantageous position as an energy player to gain preferential standing in other areas” and to “gain a more assertive political and economic presence in the world." The pre-salt reserves all but guarantee Brazil’s energy security and geopolitical importance. Now, the question is whether the Brazilian state can effectively manage the nation’s hydrocarbon wealth to take a giant leap in economic and social development.
it was evident that Brazil had significantly achieved transportation fuel security by boosting petroleum and ethanol production in tandem with the rollout of a new flex-fuel passenger vehicle fleet. As luck would have it, these national efforts have been underscored with the recent discovery of remarkable pre-salt oil and gas reserves. Today, Brazil’s new-found hydrocarbon bonanza promises to rapidly increase oil and gas production, fuel a national drive toward economic and social development, and swell the country’s geopolitical weight around the world.
Petrobras, Brazil’s state controlled and publicly traded energy company, found its new oil and gas treasures in cooperation with a consortium of oil and gas companies to prospect deepwater oil in the Tupi fields of the Santos basin near the State of São Paulo.
Exploratory drilling occurred in the Paratí prospect on bloc BM-S-10 and eventually found condensate gas in the pre-salt layer some 5,000 meters below the waterline. A second prospect was drilled in the BM-S-11 bloc where Petrobras discovered a massive reservoir of 5-8 billion barrels of oil equivalent (boe). Since then, pre-salt reservoirs have been prospected throughout the Santos and Campos basins. Today, Petrobras is working alongside Anadarko, Devon, Exxon-Mobil, BG group, Petrogal, Reposol, Shell, and UK Gas Company to prospect and produce oil and gas from these immense reserves.
For example, in June of this year Petrobras, working in partnership with Reposol, discovered light crude in the pre-salt layer of the Albacora Leste field of the Campos basin some 130 kilometers offshore from Rio de Janeiro. In July, Petrobras opened up production of the Baleia Branca pre-salt field some 85 kilometers offshore from the state of Espirito Santo which could produce 20,000 barrels by the end of the year. The United States Energy Information Administration (EIA) forecasts that the pre-salt reserves could add over 50 billion barrels to Brazil’s proven reserves while others estimate much more. All agree that Brazil is sitting on a treasure of hydrocarbons that could lead the country to become one of the most important oil producers in the world during the coming decade. Already Petrobras, Exxon-Mobil, Anadarko, and Reposol are producing from the pre-salt fields to boost overall national production from 2.4 mbd in 2008 to over 2.8 mbd by the end of this year. According to Petrobras’ business plan for the period of 2010 to 2014, the firm will invest $224 billion of which 53 percent will be devoted to exploration and production, most of it in the pre-salt reservoirs. The company’s production goals include 3.9 million boe by 2014, rising to 5.4 million by 2020. Brazil will likely become one of the top five producers of hydrocarbons by the end of the decade if these goals are reached.The drive towards transportation fuel security
Under the banner “O petroleo é nosso!” the Brazilian government of President Getúlio Vargas created Petrobras in 1953 to undertake a drive toward oil self-sufficiency. Petrobras worked to guarantee retail supplies of transportation fuels and lubricants to all regions of Brazil during the first two decades of operations. Consequently, the company focused on building refinery capacity for oil imported from the Middle East. The oil shocks of the 1970s convinced most Brazilian policymakers that their country’s dependence on petroleum imports jeopardized national development and security. Hence, Petrobras doubled up on efforts to discover hydrocarbon reserves in Brazil while the military government established the National Alcohol Program (PROALCOOL) to subsidize and standardize national production of ethanol fuel from sugarcane to supplant production and supplies of transport fuels.
Although the company began searching for offshore reserves as early as 1968 near the coast of Sergipe, it was not until 1974 that it found the Campos reserves off the coast of Rio de Janeiro, the largest discovered until the pre-salt reserves. Petrobras’ discoveries in the Campos basin allowed Brazil to implement policies and programs developed to set a solid public-private foundation for petrochemical and ethanol production to curtail the nation’s dependence on imports of petroleum and its derivatives. For example, in 1975 the federal government took advantage of declining world sugar prices to launch the PROALCOOL program to provide tax incentives, credits, and infrastructure to sugarcane and ethanol producers. Between 1975 and 1985 domestic ethanol production quadrupled.
According to Sennes and Narciso, such concerted efforts to find hydrocarbons, produce ethanol, and displace imports in the 1970s were not merely the case of adjusting the national economy to the international price shock; it was also an effort to render the development and security strategy sustainable within an increasingly hostile international environment where energy was vital. So crucial was the country’s strategy of development and industrialization considered for national security that it justified a thorough political, financial, institutional, and technological mobilization (see Sennes, Ricardo Ubiraci and Thais Narciso. “Brazil as an International Energy Player,” in Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy. Edited by Lael Brainard and Leonardo Martinez-Diaz. Brookings Institution Press. 2009:17-54).”If the OPEC oil shocks of the 1970s reinforced Brazil’s defensive imperative to lessen energy imports, then it was the partial privatization of Petrobras in 1997 that replaced the state controlled import substitution strategy with a more balanced, entrepreneurial approach that sought greater private and foreign investment, technology transfer, and production efficiencies. The campaign to liberalize Brazilian production, through the partial privatization of Petrobras and the concurrent formation of a concessionary policy framework for hydrocarbon exploration and production, caused the favorable conditions which led to the pre-salt discoveries less than a decade later. Under the 1997 Petroleum Law, Brazil’s proven reserves of oil and gas grew by 40 percent, investment rose from $4 to $25 billion per year, production doubled in the proceeding decade, and the petroleum sector’s importance to overall Gross Domestic Product (GDP) expanded from two to ten percent.
Just two decades ago Brazil purchased over 40 percent of its energy abroad. In 1999 Brazil imported 24.1 percent of its total energy consumption, including 34.5 percent of its petroleum use. By 2008 the nation had reduced its external energy dependence to 8.3 percent, achieved self-sufficiency in crude oil production, and was the world’s largest exporter of ethanol. Between 2005 and 2009, petroleum production rose from just over two million barrels per day to nearly 2.6 million, and ethanol production grew from nearly 4.2 million gallons to over 7 million gallons. With transportation fuel security at hand, the Brazilian government is tasked with developing a policy framework that doubles production of oil and gas while projecting the country’s hydrocarbon power toward the commanding heights of the global political economy
Policy, production, and power
In August of 2009 President Lula introduced four distinct but integrated legislative initiatives to maximize state control over the pre-salt reserves. The proposed regime includes four key strategic pillars:
1) establishing a production sharing regime for the nation’s new found “strategic” oil reserves;
2) strengthening Petrobras' stake in the new hydrocarbon wealth;
3) creating a new state controlled company, Pré-Sal Petróleo, S.A or “Petrosal”, to administer the Production Sharing Agreements (PSAs) and commercialize the state’s portion of the profit oil earned from each PSA; and
4) setting up a new Social Fund to administer the wealth generated by Petrosal’s stake in the PSAs.
This new production framework is designed to replace the concessionary model in place since 1997 for those blocs denominated “strategic” by the National Agency of Petroleum, Natural Gas, and Biofuels (known as the ANP). The proposed production sharing regime falls short of completely renationalizing oil and gas exploration and production, but the roles of both Petrobras’ and Petrosal should provide the Brazilian state with ample control over the nation’s hydrocarbon resources. Petrobras serves as the corporate cornerstone of the Lula government’s strategy to leverage the pre-salt reserves into the fuel of national development and geopolitical power. Under the proposed policy framework, the National Council for Energy Policy (CNPE) would continue to formulate national energy policy, but the ANP would be authorized to identify strategic blocs from the pre-salt reservoirs and award them directly to Petrobras or to consortia with at least a thirty percent stake reserved for Petrobras. The Brazilian state, represented by Petrosal, would also participate in all strategic bloc awards without making any investment. Therefore, the government will exercise control over exploration and production of the pre-salt reserves through its majority 51 percent ownership of voting shares in Petrobras and sole ownership of Petrosal.
The government’s gamble to place Petrobras at the center-stage of the national efforts to exploit the pre-salt reserves comes after the company’s widely recognized success in developing competitive advantages in deep water exploration and drilling. The company is one of the world’s most successful oil companies—among both state and privately owned companies—in terms of increases in reserves and production, technical capacity (particularly in exploration, development and production of offshore and deep offshore reserves) and development of international projects.” (Isbell, Paul."Energy and Geopolitics in Latin America," Real Instituto Elcano, Working Paper December 2008).
According to Petrobras’ Director of Exploration and Production, Guilherme Estrella, the company’s success and discovery of the pre-salt reservoirs, "is the result of five decades of exploration investments of Petrobrás, which resulted in a growing knowledge of Brazilian sedimentary basins. It reflects, too, the focus on the development of technologies, analytical procedures and innovative solutions in exploratory processes, particularly seismic and drilling of wells and the increased willingness of Petrobras for exploration risks.” (ibid)These competitive advantages in deep water drilling were confirmed by the results of the 2007 ANP auction of the eleven blocs associated with the pre-salt reserves located in the Cluster region of the Santos basin. Petrobras participated in every winning consortium, leading with over a 60 percent stake in nine of these blocs and holding 40 and 45 percent stakes in the remaining two. Therefore, it is not surprising that the Lula administration’s proposals would mandate Petrobras as the sole operator with a minimum 30 percent stake in all strategic blocs. Under the new regime, ANP will administer public auctions of the strategic reserves to consortia with at least 30 percent Petrobras participation or opt to directly award an exclusive PSA to the state controlled firm. Thus, the ANP determines under which conditions participating private sector or foreign state owned enterprises (SOEs) will be allowed to invest and apply their technological and managerial capacities in partnership with Petrobras. Petrobras does face significant hurdles to successfully exercise its operational control under the proposed PSA regime, including the need for a constant flow of capital to fully exploit the ultra-deepwater pre-salt reserves. On June 30, 2010 President Lula signed one of the key pre-salt proposals into law which allows for the transfer of rights to five billion boe from the pre-salt fields to Petrobras in return for the recently negotiated $42.5 billion worth of company shares. This completed deal now sets up Petrobras’ impending public stock issue which could raise some $75 billion depending on how investors gauge the company’s falling stock price and the politics surrounding the pre-salt production. Although bullish on Petrobras, it reminds investors of the increasing risks associated with the government’s control of the company and the 25-30 percent stock price dive in the past year. Politics have certainly challenged Petrobras and slowed complete passage of the new regulatory framework as the producing states of Espirito Santo, Rio de Janeiro, and São Paulo duel with the non-producing states over the distribution of rents and royalties. However, the probable victory of President Lula’s hand picked successor, Dilma Rousseff of the Workers Party, in October’s presidential election should encourage full congressional passage of the PSA regime and a rebound of Petrobras’ share price in early 2011. These probable outcomes will provide Brazil with state control over the nation’s hydrocarbon resources and one of the largest oil and gas companies of the world, providing future governments the revenues and tools for accelerating national development and projecting geopolitical power for decades to come. The country’s hydrocarbon inheritance permits Brazil to make a critical contribution to regional energy security in South America and to become a stable supplier of crude oil and transportation fuels around the world, including the United States. Currently, Brazil is the second largest oil producer in South America, but it is expected to surpass Venezuela in the coming years as increasing numbers of pre-salt blocs come onto production. The United States imports approximately 60 percent of Brazil’s current oil exports, with volumes expected to rise in the next decade. Indeed, if bilateral biofuel cooperation expands in the coming years it is possible that Brazil would play a growing role in meeting the rising demand for ethanol in the US. Brazil’s capacity to increase production and exports of oil, gas, petrochemicals, and ethanol in the coming decades will likely lead to greater economic interdependence with its neighbors in South America, providing a stronger political stage for projecting national power through multilateral forums and international governmental organizations, including the Organization of Petroleum Exporting States (OPEC), the Organization of American States (OAS), and the United Nations Security Council. The Brazilian state’s control over hydrocarbons is likely to place the nation in an “advantageous position as an energy player to gain preferential standing in other areas” and to “gain a more assertive political and economic presence in the world." The pre-salt reserves all but guarantee Brazil’s energy security and geopolitical importance. Now, the question is whether the Brazilian state can effectively manage the nation’s hydrocarbon wealth to take a giant leap in economic and social development.
September 30, 2010 - BRASILIA: Thermal Power Market Outlook In Brazil To 2020 (BRAZIL)
Source: Press Office
Source: Press Office
The new report, "Thermal Power Market Outlook in Brazil to 2020 - Capacity, Generation, Regulations, Major Power Plants, and Key Companies" gives a view of Brazil's thermal energy market and provides forecasts to 2020. This report includes information on thermal (coal, oil and gas) installed capacity and generation. It provides information on key trends, profiles of major industry participants, information on major power plants and analysis of important deals. This, along with detailed information on the regulatory framework and key policies governing the industry, provides a comprehensive understanding of the market for thermal power in the country. This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by a team of industry experts.
September 30, 2010 - BRASILIA: Cosan launches new 90 Mgy ethanol, power project in Brazil (BRAZIL)
Source: Biofuels Digest
Source: Biofuels Digest
In Brazil, Cosan announced the inauguration of their newest ethanol, sugar and electricity facility in Caarapó. Listed as part of the Shell/Cosan joint venture Biofuels reported on August 26th, the facility will process 2.5 million tons of sugarcane to produce 90 MGy of ethanol, 185,000 tons of sugar and cogenerate 76 MWh/yr of electricity from sugar bagasse. This is Cosan’s first plant in the State of Mato Grosso do Sul. ”
The plant uses high technology, which better integrates the production system and the environment. In Caarapó we have also prioritized the hiring of local labor, contributing to improved income generation in the region”, says Cosan president Marcos Marinho Lutz. Cosan’s website states that the plant utilizes three 700 meter wells and cooling towers to reduce water consumption as well as “exclusive software that makes production even more dynamic, avoiding waste and facilitating the decision-making process along the activities the are being carried out. In addition, waste from ethanol production is managed to be returned to the agricultural area as fertilizer, as in the use of vinasse (also known as filter cake), a by-product of the distillation of ethanol.”
The plant uses high technology, which better integrates the production system and the environment. In Caarapó we have also prioritized the hiring of local labor, contributing to improved income generation in the region”, says Cosan president Marcos Marinho Lutz. Cosan’s website states that the plant utilizes three 700 meter wells and cooling towers to reduce water consumption as well as “exclusive software that makes production even more dynamic, avoiding waste and facilitating the decision-making process along the activities the are being carried out. In addition, waste from ethanol production is managed to be returned to the agricultural area as fertilizer, as in the use of vinasse (also known as filter cake), a by-product of the distillation of ethanol.”
September 29, 2010 - BRASILIA: Hydropower making waves in the renewable energy world (BRAZIL)
Source: Energy Digital
Source: Energy Digital
Here is a look at some of the latest trends and top companies in the world of hydropower, a dominant renewable energy resource
Hydroelectricity, generated through hydropower, is the oldest, most popular method of producing renewable energy. According to the U.S. Energy Information Administration (EIA), “Water is currently the leading renewable energy source used by electric utilities to generate electric power.”
Hydroelectricity Locations
Several countries utilize hydroelectric power for a majority of their electric energy generation, such as Venezuela, Switzerland, Norway, Canada and Brazil. In 2009, China generated the highest net amount of hydroelectric power in the world, with Brazil, Canada and the U.S. following closely. According to the EIA, “Total generation from renewable resources increases by three percent annually.” The renewable share of world electricity generation is expected to grow a total of 23 percent between 2007 and 2035, with around 80 percent of the increase coming from hydroelectric power and wind power.
Hydropower Pros and Cons
The advantages of producing electricity via water include: zero greenhouse gas emissions and therefore zero pollution to the environment; consistent electricity production for many decades; repurposing for irrigation or recreational activities in the lakes; and the ability to stop production and use dams only when needed. Hydroelectricity is the only renewable energy that is capable of competing economically with fossil fuels. EIA believes, “Government policies or incentives often provide the primary economic motivation for construction of renewable generation facilities.”
Hydropower generation also presents a few disadvantages, such as: high costs for building dams; damage to natural environments from flooding over large areas of land; and potential geological damages.
Major Hydropower Projects
Itaipu Binacional
Itaipu Binacional is a project developed collaboratively by Brazil and Paraguay, which includes the Itaipu Dam, its hydroelectric power plant and the Itaipu Lake. The plant was built on the Paraná River, situated on the Brazil-Paraguay border. Construction of the Itaipu Dam was completed in 1982, and the power plant has been in operation since 1984. Itaipu Binacional is the world’s largest generator of clean, renewable energy. The total installed power capacity of the project is 14,000 megawatts from 20 generating units, supplying around 19 percent of the energy consumed in Brazil and 77 percent of the demand in Paraguay. According to Itaipu Binacional, “In 2009, the Itaipu power plant generated 91.651.808 megawatts per hour (MWh), the fourth highest in 25 years of power production.”
China Yangtze Power Co Ltd.
China Yangtze Power Co Ltd. is the largest hydropower corporation in China. The company owns and operates the Gezhouba Power Plant, which has a total installed capacity of 6,977 megawatts. Additionally, China Yangtze Power Co is responsible for managing six generating sets at the Three Gorges Power Plant, currently in operation. The total operational and management capacity of the company is 12,577 megawatts. Electricity generated by the hydro plants is sold to central China and the Guangdong Province. According to China Yangtze Power Co, “Depending on the construction of the Three Gorges Project and the development of the water resources at the upper reaches of the Yangtze River, the company will continue to commit itself to generating the hydropower-dominated clean electricity.”
Companhia Energética de São Paulo
Companhia Energética de São Paulo (CESP), the largest power generation company in São Paulo state and the third largest in Brazil, has six hydroelectric plants, and 57 generating units. The company’s total installed capacity is 7,445 megawatts, with 3,916 megawatts of assured power. Electrical generation from these plants accounts for up to ten percent of the national total. The company’s hydro plants distribute via two drainage basins, including the Paraná River basin, located in the western part of São Paulo state, and the Paraíba do Sul river basin, located in the east.
The Guri Dam
Located on the Caroni River in Bolívar State of Venezuela, the Guri Dam is considered one of the largest in the world. Also known as the Central Hidroeléctrica Simón Bolívar, the dam was developed in two parts, with construction concluded in 1986. The dam construction has been controversial, due to the destroyed environment resulting from the created lake. The Guri hydroelectric power station is situated in the Necuima Canyon, near the Caroní River’s mouth. As of 2009, the plant is the world’s third largest, with a generating capacity of 10,200 megawatts.
Grand Coulee Dam
According to the U.S. Department of the Interior, Bureau of Reclamation, “Grand Coulee Dam is the largest hydropower producer in the United States, with a total generating capacity of 6,809 megawatts. It is one of the top ten largest producers of electricity in the world.” The dam is located on the Columbia River in Washington State. The reservoir is named Franklin Delano Roosevelt Lake, after the U.S. president who oversaw the development of the dam. MWAK constructed the dam’s foundation.
Hydroelectricity, generated through hydropower, is the oldest, most popular method of producing renewable energy. According to the U.S. Energy Information Administration (EIA), “Water is currently the leading renewable energy source used by electric utilities to generate electric power.”
Hydroelectricity Locations
Several countries utilize hydroelectric power for a majority of their electric energy generation, such as Venezuela, Switzerland, Norway, Canada and Brazil. In 2009, China generated the highest net amount of hydroelectric power in the world, with Brazil, Canada and the U.S. following closely. According to the EIA, “Total generation from renewable resources increases by three percent annually.” The renewable share of world electricity generation is expected to grow a total of 23 percent between 2007 and 2035, with around 80 percent of the increase coming from hydroelectric power and wind power.
Hydropower Pros and Cons
The advantages of producing electricity via water include: zero greenhouse gas emissions and therefore zero pollution to the environment; consistent electricity production for many decades; repurposing for irrigation or recreational activities in the lakes; and the ability to stop production and use dams only when needed. Hydroelectricity is the only renewable energy that is capable of competing economically with fossil fuels. EIA believes, “Government policies or incentives often provide the primary economic motivation for construction of renewable generation facilities.”
Hydropower generation also presents a few disadvantages, such as: high costs for building dams; damage to natural environments from flooding over large areas of land; and potential geological damages.
Major Hydropower Projects
Itaipu Binacional
Itaipu Binacional is a project developed collaboratively by Brazil and Paraguay, which includes the Itaipu Dam, its hydroelectric power plant and the Itaipu Lake. The plant was built on the Paraná River, situated on the Brazil-Paraguay border. Construction of the Itaipu Dam was completed in 1982, and the power plant has been in operation since 1984. Itaipu Binacional is the world’s largest generator of clean, renewable energy. The total installed power capacity of the project is 14,000 megawatts from 20 generating units, supplying around 19 percent of the energy consumed in Brazil and 77 percent of the demand in Paraguay. According to Itaipu Binacional, “In 2009, the Itaipu power plant generated 91.651.808 megawatts per hour (MWh), the fourth highest in 25 years of power production.”
China Yangtze Power Co Ltd.
China Yangtze Power Co Ltd. is the largest hydropower corporation in China. The company owns and operates the Gezhouba Power Plant, which has a total installed capacity of 6,977 megawatts. Additionally, China Yangtze Power Co is responsible for managing six generating sets at the Three Gorges Power Plant, currently in operation. The total operational and management capacity of the company is 12,577 megawatts. Electricity generated by the hydro plants is sold to central China and the Guangdong Province. According to China Yangtze Power Co, “Depending on the construction of the Three Gorges Project and the development of the water resources at the upper reaches of the Yangtze River, the company will continue to commit itself to generating the hydropower-dominated clean electricity.”
Companhia Energética de São Paulo
Companhia Energética de São Paulo (CESP), the largest power generation company in São Paulo state and the third largest in Brazil, has six hydroelectric plants, and 57 generating units. The company’s total installed capacity is 7,445 megawatts, with 3,916 megawatts of assured power. Electrical generation from these plants accounts for up to ten percent of the national total. The company’s hydro plants distribute via two drainage basins, including the Paraná River basin, located in the western part of São Paulo state, and the Paraíba do Sul river basin, located in the east.
The Guri Dam
Located on the Caroni River in Bolívar State of Venezuela, the Guri Dam is considered one of the largest in the world. Also known as the Central Hidroeléctrica Simón Bolívar, the dam was developed in two parts, with construction concluded in 1986. The dam construction has been controversial, due to the destroyed environment resulting from the created lake. The Guri hydroelectric power station is situated in the Necuima Canyon, near the Caroní River’s mouth. As of 2009, the plant is the world’s third largest, with a generating capacity of 10,200 megawatts.
Grand Coulee Dam
According to the U.S. Department of the Interior, Bureau of Reclamation, “Grand Coulee Dam is the largest hydropower producer in the United States, with a total generating capacity of 6,809 megawatts. It is one of the top ten largest producers of electricity in the world.” The dam is located on the Columbia River in Washington State. The reservoir is named Franklin Delano Roosevelt Lake, after the U.S. president who oversaw the development of the dam. MWAK constructed the dam’s foundation.
Septermber 30,2010 - BOGOTA: Ecopetrol, Anadarko Make Offshore Oil Find in Brazil (COLOMBIA)
Source: Latin American Herald
Colombian state oil company Ecopetrol announced the presence of crude at a Brazilian offshore block it is jointly exploring with U.S. multinational Anadarko.The discovery was made at the Itauna well in the BM-C-29 block, the Colombian company said without providing further information.“Future developments and projections will be subject to additional data to be obtained during the exploration activities carried out in the block in the following months,” said Ecopetrol, which accounts for 60 percent of domestic oil output.The Colombian state oil company said that Anadarko, the operator of the block, confirmed the “presence of hydrocarbons in the Itauna well.”Ecopetrol, which is a 50 percent partner in the block through its subsidiary in Brazil, is Colombia’s largest company and one of the four biggest oil firms in Latin America.In addition to Colombia and Brazil, the company also has a presence in exploration and production activities in Peru and the U.S. Gulf of Mexico.
September 30, 2010 -HAVANA: Cuba's drilling has risks (CUBA)
Source: Dalla's News
Five months after the BP oil spill, a federal moratorium still prohibits new deep-water drilling in the U.S. waters of the Gulf of Mexico. And under longstanding federal law, drilling is also banned near the coast of Florida.
Yet next year, a Spanish company will begin drilling new wells 50 miles from the Florida Keys – in Cuba's sovereign waters.
Cuba currently produces little oil. But oil experts say the country might have reserves along its north coast as plentiful as that of international oil middleweights Ecuador and Colombia – enough to bolster its faltering economy and cut its dependence on Venezuela for its energy needs.
"Cuba needs to find its oil. It's a resource Cuba needs," Luis Alberto Barreras Canizo, of Cuba's Ministry of Science, Technology and the Environment, said this week. He confirmed the drilling plans in an interview in Sarasota, Fla., where he was one of 20 Cuban scientists who met with scientists from the U.S. and Mexico to finalize a long-term marine research and conservation plan for the three countries.
The advent of drilling in Cuban waters poses risks both to the island nation and the United States. Ocean scientists warn that a well blowout similar to the BP disaster could send oil spewing onto Cuban beaches and then the Florida Keys in as little as three days. If the oil reached the Gulf Stream, a powerful ocean current that passes through the region, oil could flow up the coast to Miami and beyond.
Yet next year, a Spanish company will begin drilling new wells 50 miles from the Florida Keys – in Cuba's sovereign waters.
Cuba currently produces little oil. But oil experts say the country might have reserves along its north coast as plentiful as that of international oil middleweights Ecuador and Colombia – enough to bolster its faltering economy and cut its dependence on Venezuela for its energy needs.
"Cuba needs to find its oil. It's a resource Cuba needs," Luis Alberto Barreras Canizo, of Cuba's Ministry of Science, Technology and the Environment, said this week. He confirmed the drilling plans in an interview in Sarasota, Fla., where he was one of 20 Cuban scientists who met with scientists from the U.S. and Mexico to finalize a long-term marine research and conservation plan for the three countries.
The advent of drilling in Cuban waters poses risks both to the island nation and the United States. Ocean scientists warn that a well blowout similar to the BP disaster could send oil spewing onto Cuban beaches and then the Florida Keys in as little as three days. If the oil reached the Gulf Stream, a powerful ocean current that passes through the region, oil could flow up the coast to Miami and beyond.
September 30, 2010 - HAVANA: Cuba ready to drill for oil deeper than BP (CUBA)
Source: Poder 360
Source: Poder 360
Cuba is picking up the pace on efforts to search for oil and gas. Exploratory rigs could start working as soon as next year, just miles off the Florida coastCuba is expected to begin drilling offshore for oil and gas as soon as next year with equipment that will go deeper than the Deepwater Horizon rig that exploded in the Gulf of Mexico, industry experts say.The Spanish energy company, Repsol, which drilled an exploratory well in 2004 off the coast near Havana, has contracted to drill the first of several exploratory wells with a semi-submersible rig that is expected to arrive in Cuba at the end of the year, said Jorge Piñon, an energy expert and visiting research fellow at the Cuban Research Institute at Florida International University. He said the rig is expected to drill down 5,600 feet in an area about 22 miles north of Havana and 65 miles south of the Marquesas Keys.The development comes as 20 Cuban scientists joined their American and Mexican counterparts at the Mote Marine Laboratory in Sarasota this week to finalize a long-term marine research and conservation plan for the three countries. Luis Alberto Barreras Cañizo, who led the Cuban delegation as a representative of Cuba's Ministry of Science, Technology and the Environment, confirmed the plans for exploration. ``Cuba needs to find its oil, it's a resource Cuba needs,'' he told the Bradenton Herald in an interview.Environmentalists suggested the prospect of rigs just 45 miles from Florida's coastline could intensify pressure for the Obama administration to engage in talks with its Cold War antagonist to prevent ecological damage.``A policy of isolationism doesn't benefit anyone. We have a selfish interest in talking with Cuba,'' said David Guggenheim, a conference organizer and senior fellow at The Ocean Foundation in Washington. ``At a minimum, you need a good Rolodex.''AFFECTING U.S.Guggenheim has been working on marine research and conservation issues with Cuba for nearly a decade and assisted the country with satellite images and models to track the trajectory of the Gulf spill. He said computer modeling shows that an oil spill off Cuba's coast could end up in U.S. waters -- chiefly the Florida Keys and the state's east coast. ``The Gulf isn't going to respect any boundaries when it comes to oil spills,'' he said.Barreras said he's not worried about the ecological effects of offshore drilling, saying, ``the Cuban environmental framework is very progressive.''A State Department spokeswoman said the United States expects that oil exploration companies would have ``adequate safeguards in place'' and that U.S. companies could get a license through the Treasury Department's Office of Foreign Assets Control to help with oil spill prevention efforts in Cuba.But FIU's Piñon, who argued in a paper in May that U.S.-Cuba policy would ``foreclose the ability to respond effectively'' to an oil disaster, said such permits could take weeks. ``You can't put a spill on hold to wander through the bureaucracy,'' he said.Rep. Ileana Ros-Lehtinen, R-Miami, accused the Cuban regime of saying ``anything to attract investors and convince them to open their wallets.''``The regime is in tough economic straits and to keep itself afloat, is now looking at the oil industry, among others, to throw it a lifeline,'' she said. She warned that with Cuba's emerging relationship with Iran, investments in Cuba's petroleum sector could provide Iran with ``back-door access to resources and markets that it would otherwise be blocked from under new sanctions.''
September 30, 2010 - HAVANA: Cuba to drill for oil in water deeper than failed BP well (CUBA)
Source: Kansas City
Source: Kansas City
Cuba is expected to begin drilling offshore for oil and gas as soon as next year in waters deeper than those the Deepwater Horizon rig was drilling in when it exploded in the Gulf of Mexico in April.The Spanish energy company Repsol, which drilled an exploratory well in 2004 off the coast near Havana, has contracted to drill the first of several exploratory wells with a semi-submersible rig that is expected to arrive in Cuba at the end of the year, said Jorge Pinon, an energy expert and visiting research fellow at the Cuban Research Institute at Florida International University.He said the rig is expected to begin drilling in 5,600 feet of water about 22 miles north of Havana; and 65 miles south of Florida's Marquesas Keys. The oil reservoir is thought to lie 13,000 feet below the seafloor. The Deepwater Horizon rig was drilling in about 5,000 feet of water when it exploded April 20, touching off the oil spill that fixated the Gulf region throughout the spring and summer.Luis Alberto Barreras Canizo, of Cuba's Ministry of Science, Technology and the Environment, confirmed the drilling plans in an interview this week in Sarasota, Fla., where he was one of 20 Cuban scientists who met with scientists from the U.S. and Mexico to finalize a long-term marine research and conservation plan for the three countries."Cuba needs to find its oil. It's a resource Cuba needs," Barreras said.Environmentalists said the prospect of rigs just miles from Florida could intensify pressure for the U.S. to engage in talks with its Cold War antagonist to prevent ecological damage."We have a selfish interest in talking with Cuba," said David Guggenheim, a conference organizer and senior fellow at The Ocean Foundation in Washington. "At a minimum, you need a good Rolodex."Guggenheim, who has worked on marine research and conservation issues with Cuba for nearly a decade and helped that country track the trajectory of the Deepwater Horizon spill, said computer modeling shows that oil from a spill off Cuba's coast could end up in U.S. waters - chiefly the Florida Keys and the east coast of Florida."The Gulf isn't going to respect any boundaries when it comes to oil spills," Guggenheim said.Barreras said he isn't worried about the ecological affects of offshore drilling. "The Cuban environmental framework is very progressive," he said.Pinon said, however, that an effective response to a spill might be delayed by the need for U.S. companies to apply to the Treasury Department for permission to work in Cuban waters, but State Department spokesman Charles Luoma-Overstreet said U.S. companies could apply for permits now to do such work."We would expect that any company engaged in oil exploration activities to have adequate safeguards in place to prevent oil spills or other incidents," he said. "U.S. companies can be licensed ... to provide oil spill prevention and containment support related to operations in Cuba."Daniel Whittle, the Cuba program director for the Environmental Defense Fund, who recently returned from the island, said Cuban government officials are "moving forward as quickly as possible" on securing domestic oil production.Cuba imports most of its oil and gas from Venezuela, and Whittle said its own source would be critical to its economy.He said the country is "taking a very close look at the lessons learned from the BP oil spill. I can say they're determined to do it right. The international consequences of doing it wrong are all something they'd like to avoid."Pinon said the U.S. trade embargo against Cuba had complicated Cuba's efforts to secure a drilling rig. Vessels with more than 10 percent U.S. parts are barred from operating in Cuba.Repsol has hired an Italian rig, the Scarabeo 9, with a 200-member crew, to do the job, but the rig's blowout preventer, a critical piece of safety equipment that failed in the Deepwater Horizon explosion, was manufactured in the U.S. The Scarabeo 9 is expected to drill as many as nine other wells off Cuba's coast.Florida lawmakers have sought - unsuccessfully -
When news reports of a potential deal with Repsol emerged in June, Sen. Bill Nelson, D-Fla., asked the Obama administration to withdraw from a 1977 Maritime Boundary Agreement with Cuba to pressure its government. National security adviser James Jones, however, said withdrawal "would have no discernible effect" on the Cuban government and could create further boundary claim disputes for the U.S.Nelson tried a similar approach with the Bush administration in 2007 when Cuba was talking to Brazil about oil exploration. The Bush administration also turned him down.Guggenheim said he's encouraged that the State Department had granted visas to 20 Cuban delegates to attend the marine and conservation conference at the Mote Marine Laboratory in Sarasota - it was the highest number ever issued for such a conference. The attendees discussed a tri-national plan of action for protection of coral reefs, sea turtles, fish, sharks and other marine life."We can't protect our own waters without working closely with Mexico and Cuba," he said.
When news reports of a potential deal with Repsol emerged in June, Sen. Bill Nelson, D-Fla., asked the Obama administration to withdraw from a 1977 Maritime Boundary Agreement with Cuba to pressure its government. National security adviser James Jones, however, said withdrawal "would have no discernible effect" on the Cuban government and could create further boundary claim disputes for the U.S.Nelson tried a similar approach with the Bush administration in 2007 when Cuba was talking to Brazil about oil exploration. The Bush administration also turned him down.Guggenheim said he's encouraged that the State Department had granted visas to 20 Cuban delegates to attend the marine and conservation conference at the Mote Marine Laboratory in Sarasota - it was the highest number ever issued for such a conference. The attendees discussed a tri-national plan of action for protection of coral reefs, sea turtles, fish, sharks and other marine life."We can't protect our own waters without working closely with Mexico and Cuba," he said.
September 30, 2010 - HOUSTON: Drilling Plans Off Cuba Stir Fears of Impact on Gulf (UNITED STATES)
Source: The New York Times
Source: The New York Times
Five months after the BP oil spill, a federal moratorium still prohibits new deepwater drilling in the American waters of the Gulf of Mexico. And under longstanding federal law, drilling is also banned near the coast of Florida.
Yet next year, a Spanish company will begin drilling new wells 50 miles from the Florida Keys — in Cuba’s sovereign waters.
Cuba currently produces little oil. But oil experts say the country might have reserves along its north coast as plentiful as that of the international oil middleweights, Ecuador and Colombia — enough to bolster its faltering economy and cut its dependence on Venezuela for its energy needs.
The advent of drilling in Cuban waters poses risks both to the island nation and the United States.
Ocean scientists warn that a well blowout similar to the BP disaster could send oil spewing onto Cuban beaches and then the Florida Keys in as little as three days. If the oil reached the Gulf Stream, a powerful ocean current that passes through the region, oil could flow up the coast to Miami and beyond.
The nascent oil industry in Cuba is far less prepared to handle a major spill than even the American industry was at the time of the BP spill. Cuba has neither the submarine robots needed to fix deepwater rig equipment nor the platforms available to begin drilling relief wells on short notice.
And marshaling help from American oil companies to fight a Cuban spill would be greatly complicated by the trade embargo on Cuba imposed by the United States government 48 years ago, according to industry officials. Under that embargo, American companies face severe restrictions on the business they can conduct with Cuba.
The prospect of an accident is emboldening American drilling companies, backed by some critics of the embargo, to seek permission from the United States government to participate in Cuba’s nascent industry, even if only to protect against an accident.
“This isn’t about ideology. It’s about oil spills,” said Lee Hunt, president of the International Association of Drilling Contractors, a trade group that is trying to broaden bilateral contacts to promote drilling safety. “Political attitudes have to change in order to protect the gulf.”
Any opening could provide a convenient wedge for big American oil companies that have quietly lobbied Congress for years to allow them to bid for oil and natural gas deposits in waters off Cuba. Representatives of Exxon Mobil and Valero Energy attended an energy conference on Cuba in Mexico City in 2006, where they met Cuban oil officials.
Right now, Cuba’s oil industry is served almost exclusively by non-American companies. Repsol, a Spanish oil company, has contracted with an Italian operator to build a rig in China that is scheduled to begin drilling several deepwater test wells next year. Other companies, from Norway, India, Malaysia, Venezuela, Vietnam and Brazil, have taken exploration leases.
New Mexico’s governor, Bill Richardson, a Democrat who regularly visits Cuba, said Cuba’s offshore drilling plans are a “potential inroad” for loosening the embargo. During a recent humanitarian trip to Cuba, he said, he bumped into a number of American drilling contractors — “all Republicans who could eventually convince the Congress to make the embargo flexible in this area of oil spills.”
“I think you will see the administration be more forward-moving after the election,” Mr. Richardson said.
Despite several requests in the last week, Cuban officials declined to make anyone available for an interview.
Currently, the United States, Mexico and Cuba are signatories to several international protocols in which they agreed to cooperate to contain any oil spill. In practice, there is little cooperation between Washington and Havana on oil matters, although American officials did hold low-level meetings with Cuban officials after the BP blowout.
“What is needed is for international oil companies in Cuba to have full access to U.S. technology and personnel in order to prevent and/or manage a blowout,” said Jorge Piñón, a former executive of BP and Amoco. Mr. Piñón, who fled Cuba as a child and now briefs American companies on Cuban oil prospects, said the two governments must create a plan for managing a spill.
Several American oil and oil service companies are eager to do business in Cuba, Mr. Piñón said, but they are careful not to identify themselves publicly because they want to “protect their brand image in South Florida,” where Cuban-Americans who support the embargo could boycott their gasoline stations and other products.
There are signs the Obama administration is aware of the safety issues. Shortly after the BP accident, the Office of Foreign Assets Control, the agency that regulates the embargo, said it would make licenses available to American service companies to provide oil spill prevention and containment support.
Charles Luoma-Overstreet, a State Department spokesman, said licenses would be granted on a “application-by-application basis,” but he would not comment on the criteria.
Mr. Piñón said it appeared that an American company could apply for a license before an emergency but that a license would be issued only after an accident had occurred. “We’re jumping up and down for clarification,” he said.
One group — Clean Caribbean & Americas, a Fort Lauderdale cooperative of several oil companies — has received licenses to send technical advisers, dispersants, containment booms and skimmers to Cuba since 2003. But it can only serve the member companies Repsol and Petrobras, not Cuba’s government.
Economic sanctions on Cuba have been in effect in one form or another since 1960, although the embargo has been loosened to allow the sale of agricultural goods and medicines and travel by Cuban-Americans to the island.
Mr. Hunt of the drillers’ group said that the association had sent a delegation to Cuba in late August and had held talks with government officials and Cupet, the Cuban national oil company.
He said that Cuban officials, including Tomás Benítez Hernández, the vice minister of basic industry, asked him to take a message back to the United States. “Senior officials told us they are going ahead with their deepwater drilling program, that they are utilizing every reliable non-U.S. source that they can for technology and information, but they would prefer to work directly with the United States in matters of safe drilling practices,” Mr. Hunt said.
Mr. Benítez became the acting minister last week when the minister of basic industry, the agency that oversees the oil industry, was fired for reasons still unclear.
Donald Van Nieuwenhuise, director of petroleum geoscience programs at the University of Houston, said that if an accident occurred in Cuban waters, Repsol or other companies could mobilize equipment from the North Sea, Brazil, Japan or China. But “a one-week delay could be disastrous,” he said, and it would be better for Havana, Washington and major oil companies to coordinate in advance.
Opponents of the Cuban regime warn that assisting the Cubans with their oil industry could help prop up Communist rule. Instead of making the drilling safer, some want to stop it altogether.
Senator Bill Nelson, Democrat of Florida, is urging President Obama to recall a diplomatic note to Havana reinforcing a 1977 boundary agreement that gives Cuba jurisdiction up to 45 miles from Florida. “I am sure you agree that we cannot allow Cuba to put at risk Florida’s major business and irreplaceable environment,” he wrote the president shortly after the BP accident.
Yet next year, a Spanish company will begin drilling new wells 50 miles from the Florida Keys — in Cuba’s sovereign waters.
Cuba currently produces little oil. But oil experts say the country might have reserves along its north coast as plentiful as that of the international oil middleweights, Ecuador and Colombia — enough to bolster its faltering economy and cut its dependence on Venezuela for its energy needs.
The advent of drilling in Cuban waters poses risks both to the island nation and the United States.
Ocean scientists warn that a well blowout similar to the BP disaster could send oil spewing onto Cuban beaches and then the Florida Keys in as little as three days. If the oil reached the Gulf Stream, a powerful ocean current that passes through the region, oil could flow up the coast to Miami and beyond.
The nascent oil industry in Cuba is far less prepared to handle a major spill than even the American industry was at the time of the BP spill. Cuba has neither the submarine robots needed to fix deepwater rig equipment nor the platforms available to begin drilling relief wells on short notice.
And marshaling help from American oil companies to fight a Cuban spill would be greatly complicated by the trade embargo on Cuba imposed by the United States government 48 years ago, according to industry officials. Under that embargo, American companies face severe restrictions on the business they can conduct with Cuba.
The prospect of an accident is emboldening American drilling companies, backed by some critics of the embargo, to seek permission from the United States government to participate in Cuba’s nascent industry, even if only to protect against an accident.
“This isn’t about ideology. It’s about oil spills,” said Lee Hunt, president of the International Association of Drilling Contractors, a trade group that is trying to broaden bilateral contacts to promote drilling safety. “Political attitudes have to change in order to protect the gulf.”
Any opening could provide a convenient wedge for big American oil companies that have quietly lobbied Congress for years to allow them to bid for oil and natural gas deposits in waters off Cuba. Representatives of Exxon Mobil and Valero Energy attended an energy conference on Cuba in Mexico City in 2006, where they met Cuban oil officials.
Right now, Cuba’s oil industry is served almost exclusively by non-American companies. Repsol, a Spanish oil company, has contracted with an Italian operator to build a rig in China that is scheduled to begin drilling several deepwater test wells next year. Other companies, from Norway, India, Malaysia, Venezuela, Vietnam and Brazil, have taken exploration leases.
New Mexico’s governor, Bill Richardson, a Democrat who regularly visits Cuba, said Cuba’s offshore drilling plans are a “potential inroad” for loosening the embargo. During a recent humanitarian trip to Cuba, he said, he bumped into a number of American drilling contractors — “all Republicans who could eventually convince the Congress to make the embargo flexible in this area of oil spills.”
“I think you will see the administration be more forward-moving after the election,” Mr. Richardson said.
Despite several requests in the last week, Cuban officials declined to make anyone available for an interview.
Currently, the United States, Mexico and Cuba are signatories to several international protocols in which they agreed to cooperate to contain any oil spill. In practice, there is little cooperation between Washington and Havana on oil matters, although American officials did hold low-level meetings with Cuban officials after the BP blowout.
“What is needed is for international oil companies in Cuba to have full access to U.S. technology and personnel in order to prevent and/or manage a blowout,” said Jorge Piñón, a former executive of BP and Amoco. Mr. Piñón, who fled Cuba as a child and now briefs American companies on Cuban oil prospects, said the two governments must create a plan for managing a spill.
Several American oil and oil service companies are eager to do business in Cuba, Mr. Piñón said, but they are careful not to identify themselves publicly because they want to “protect their brand image in South Florida,” where Cuban-Americans who support the embargo could boycott their gasoline stations and other products.
There are signs the Obama administration is aware of the safety issues. Shortly after the BP accident, the Office of Foreign Assets Control, the agency that regulates the embargo, said it would make licenses available to American service companies to provide oil spill prevention and containment support.
Charles Luoma-Overstreet, a State Department spokesman, said licenses would be granted on a “application-by-application basis,” but he would not comment on the criteria.
Mr. Piñón said it appeared that an American company could apply for a license before an emergency but that a license would be issued only after an accident had occurred. “We’re jumping up and down for clarification,” he said.
One group — Clean Caribbean & Americas, a Fort Lauderdale cooperative of several oil companies — has received licenses to send technical advisers, dispersants, containment booms and skimmers to Cuba since 2003. But it can only serve the member companies Repsol and Petrobras, not Cuba’s government.
Economic sanctions on Cuba have been in effect in one form or another since 1960, although the embargo has been loosened to allow the sale of agricultural goods and medicines and travel by Cuban-Americans to the island.
Mr. Hunt of the drillers’ group said that the association had sent a delegation to Cuba in late August and had held talks with government officials and Cupet, the Cuban national oil company.
He said that Cuban officials, including Tomás Benítez Hernández, the vice minister of basic industry, asked him to take a message back to the United States. “Senior officials told us they are going ahead with their deepwater drilling program, that they are utilizing every reliable non-U.S. source that they can for technology and information, but they would prefer to work directly with the United States in matters of safe drilling practices,” Mr. Hunt said.
Mr. Benítez became the acting minister last week when the minister of basic industry, the agency that oversees the oil industry, was fired for reasons still unclear.
Donald Van Nieuwenhuise, director of petroleum geoscience programs at the University of Houston, said that if an accident occurred in Cuban waters, Repsol or other companies could mobilize equipment from the North Sea, Brazil, Japan or China. But “a one-week delay could be disastrous,” he said, and it would be better for Havana, Washington and major oil companies to coordinate in advance.
Opponents of the Cuban regime warn that assisting the Cubans with their oil industry could help prop up Communist rule. Instead of making the drilling safer, some want to stop it altogether.
Senator Bill Nelson, Democrat of Florida, is urging President Obama to recall a diplomatic note to Havana reinforcing a 1977 boundary agreement that gives Cuba jurisdiction up to 45 miles from Florida. “I am sure you agree that we cannot allow Cuba to put at risk Florida’s major business and irreplaceable environment,” he wrote the president shortly after the BP accident.
September 30, 2010 - HAVANA: Cuba ups gasoline prices about 10 percent (CUBA)
Source: Associeted Press
Source: Associeted Press
Cuba has upped already–high gasoline prices by about 10 percent amid sweeping changes to the economy, a move that could lead to grumbling among cash–strapped islanders, particularly private taxi drivers who are not allowed to raise their own prices.
The changes, which took effect Monday, were announced in the Communist Party–newspaper Granma, which cited rising international prices for the move. It was the first time prices have risen since September 2008, when crude oil internationally sold for about a third more than it does now.
The cost of diesel fuel — used by many of the old cars that populate Cuba's streets — rose to $1.19 a liter ($4.50 a gallon), about 11 cents a liter (42 cents a gallon) higher than previously. The highest octane fuel rose even more to $1.73 a liter ($6.54 a gallon), from $1.51 a liter ($5.72 a gallon).
The prices approach those paid in Europe and are apparently the highest in the hemisphere, topping pump prices in Brazil and Bermuda. They are a fortune for Cubans who make the average salary of just $20 a month.
But the changes are not likely to affect many islanders, a reason why past gas hikes here have not led to unrest, as they sometimes do in other developing countries.
Few people on the island own a car, and those lucky enough to have been issued a vehicle through their state–run companies usually have a monthly quota of gas paid through work.
The government heavily subsidizes the public transportation system on which most Cubans rely, and it did not announce an increase in those prices.
Those who will take a hit are the thousands of private taxi drivers who use gas–guzzling American clunkers from the 1950s or rusting cars from former Eastern Bloc countries to ferry people along set routes to and from work.
In most cases, the price they charge is set at 10 pesos (about 50 cents). Even before the price hikes, many complained that high fuel costs meant it didn't pay to cruise the city looking for a fare.
Taxi drivers interviewed Monday said it would be even harder for them to make ends meet if the government does not authorize higher fares, particularly since they already pay a steep price for permission to drive.
"I already work just to pay the license fees," said Alexander Rodriguez, a 39–year–old taxi driver waiting for a fare at a taxi stand in Old Havana. He said he must pay the government 300 Cuban pesos a month — about $15 — for the right to take passengers in his cherry–red 1955 Oldsmobile. "For a Cuban, this price hike is really tough."
The gas price hikes come as the government is seeking to transform its socialist economy into a system that includes more private workers and more reliance on prices to regulate supply and demand. Earlier this month, Cuba announced it was laying off half a million workers — about one–tenth of the work force — while allowing far more free enterprise.
On Friday, the government approved some 178 private business activities, gave Cubans the right to employ people not related to them, and even promised credit to entrepreneurs.
Among the new activities authorized by the government is the sale of fruits and vegetables from roadside kiosks or homes, something many had already done on the black market. On Monday, the government gave more details of how the legal stands will work, saying a pilot program allowing the stands in a few provinces will be expanded nationwide.
Those interested must register and pay taxes starting at 25 percent on any profits, according to an article in Granma.
"The idea is to give order to what had been a raging river," the article said, referring to the widespread illegal vegetable stands that have existed until now.
The changes, which took effect Monday, were announced in the Communist Party–newspaper Granma, which cited rising international prices for the move. It was the first time prices have risen since September 2008, when crude oil internationally sold for about a third more than it does now.
The cost of diesel fuel — used by many of the old cars that populate Cuba's streets — rose to $1.19 a liter ($4.50 a gallon), about 11 cents a liter (42 cents a gallon) higher than previously. The highest octane fuel rose even more to $1.73 a liter ($6.54 a gallon), from $1.51 a liter ($5.72 a gallon).
The prices approach those paid in Europe and are apparently the highest in the hemisphere, topping pump prices in Brazil and Bermuda. They are a fortune for Cubans who make the average salary of just $20 a month.
But the changes are not likely to affect many islanders, a reason why past gas hikes here have not led to unrest, as they sometimes do in other developing countries.
Few people on the island own a car, and those lucky enough to have been issued a vehicle through their state–run companies usually have a monthly quota of gas paid through work.
The government heavily subsidizes the public transportation system on which most Cubans rely, and it did not announce an increase in those prices.
Those who will take a hit are the thousands of private taxi drivers who use gas–guzzling American clunkers from the 1950s or rusting cars from former Eastern Bloc countries to ferry people along set routes to and from work.
In most cases, the price they charge is set at 10 pesos (about 50 cents). Even before the price hikes, many complained that high fuel costs meant it didn't pay to cruise the city looking for a fare.
Taxi drivers interviewed Monday said it would be even harder for them to make ends meet if the government does not authorize higher fares, particularly since they already pay a steep price for permission to drive.
"I already work just to pay the license fees," said Alexander Rodriguez, a 39–year–old taxi driver waiting for a fare at a taxi stand in Old Havana. He said he must pay the government 300 Cuban pesos a month — about $15 — for the right to take passengers in his cherry–red 1955 Oldsmobile. "For a Cuban, this price hike is really tough."
The gas price hikes come as the government is seeking to transform its socialist economy into a system that includes more private workers and more reliance on prices to regulate supply and demand. Earlier this month, Cuba announced it was laying off half a million workers — about one–tenth of the work force — while allowing far more free enterprise.
On Friday, the government approved some 178 private business activities, gave Cubans the right to employ people not related to them, and even promised credit to entrepreneurs.
Among the new activities authorized by the government is the sale of fruits and vegetables from roadside kiosks or homes, something many had already done on the black market. On Monday, the government gave more details of how the legal stands will work, saying a pilot program allowing the stands in a few provinces will be expanded nationwide.
Those interested must register and pay taxes starting at 25 percent on any profits, according to an article in Granma.
"The idea is to give order to what had been a raging river," the article said, referring to the widespread illegal vegetable stands that have existed until now.
September 30, 2010 - HAVANA: Cuba may begin oil drilling next year (CUBA)
Source: Poder 360
Source: Poder 360
The Spanish energy company, Repsol, has contracted to drill the first of several exploratory wells with a semi-submersible rig that is expected to arrive in Cuba at the end of the year, according to Jorge Piñon, an energy expert and visiting research fellow at Florida International University.
Quoted in The Miami Herald, Piñon said the rig is expected to drill down 5,600 feet in an area about 22 miles north of Havana and 65 miles south of the Marquesas Keys. Cuba is currently heavily dependent on Venezuela for its petroleum needs.
The U.S. Geological Survey estimates Cuba's offshore reserves hold from 5-billion to 9-billion barrels of oil (almost as much as in the Arctic National Wildlife Refuge in Alaska), and close to 1-trillion cubic feet of natural gas. Meanwhile, the Herald also reports that 20 Cuban scientists joined American and Mexican counterparts at the Mote Marine Laboratory in Sarasota this week to finalize a long-term marine research and conservation plan for the three countries.
The drilling is likely to raise environmental and political concerns in South Florida. A State Department spokeswoman told the Herald that US companies could get a license through the Treasury Department's Office of Foreign Assets Control to help with oil spill prevention efforts in Cuba.
Quoted in The Miami Herald, Piñon said the rig is expected to drill down 5,600 feet in an area about 22 miles north of Havana and 65 miles south of the Marquesas Keys. Cuba is currently heavily dependent on Venezuela for its petroleum needs.
The U.S. Geological Survey estimates Cuba's offshore reserves hold from 5-billion to 9-billion barrels of oil (almost as much as in the Arctic National Wildlife Refuge in Alaska), and close to 1-trillion cubic feet of natural gas. Meanwhile, the Herald also reports that 20 Cuban scientists joined American and Mexican counterparts at the Mote Marine Laboratory in Sarasota this week to finalize a long-term marine research and conservation plan for the three countries.
The drilling is likely to raise environmental and political concerns in South Florida. A State Department spokeswoman told the Herald that US companies could get a license through the Treasury Department's Office of Foreign Assets Control to help with oil spill prevention efforts in Cuba.
September 30, 2010 - HAVANA: Cuban Offshore Drilling Plans Spark Concerns(CUBA)
Source: VOA News
Source: VOA News
A Spanish energy company is planning to help Cuba drill for oil off the island's northern coast, about 80 kilometers south of the U.S. state of Florida.
Repsol spokesman Kristian Rix says the company has drilling rights to a 4,500-square-kilometer area in the Straits of Florida but would not give a timeline on when oil exploration would begin.
Cuba currently imports most of its oil and gas from Venezuela, but oil experts say there could be significant offshore reserves. A study earlier this year by the U.S. Geological Survey estimated that Cuba might be able to access 4.6 billion barrels of oil.
The plans by Cuba and Repsol to drill for oil are raising concerns in the United States because of the proximity to the Gulf of Mexico, where an explosion aboard a BP oil rig in April led to the worst oil spill in U.S. history.
Florida Democratic Senator Bill Nelson is urging the White House to pressure the Cuban government to abandon its offshore drilling plans.
Scientists warn any oil from a spill off Cuba's north coast could reach the southeastern United States within days. And experts worry difficult relations between the U.S. and Cuba's communist government could hurt efforts to respond to a potential disaster.
The U.S. State Department says U.S. companies can be licensed to provide oil spill prevention and clean-up support to Cuba.
There are also concerns that the U.S. trade embargo is complicating Cuba's efforts to safely drill for oil.
The embargo calls for sanctions against companies that supply more than 10 percent of the parts for any vessel operating in Cuban waters.
To get around the embargo, Spanish energy firm Repsol has been working with an Italian company to build an oil exploration rig in China. The rig is expected to arrive in Cuba early next year.
Despite the concerns, a Cuban official visiting the U.S. says he is confident Cuba can drill for oil safely.
Luis Alberto Barreras Canizo of Cuba's Ministry of Science, Technology and the Environment told the McClatchy Newspaper Service that Cuba's environmental framework is "very progressive." Barreras was in Sarasota, Florida this week for a meeting with American and Mexican officials on marine research and conservation.
Meanwhile, the New York Times reports some U.S. officials see Cuba's oil ambitions as a chance to loosen the trade embargo and allow U.S. energy companies to pursue more opportunities in Cuba.
New Mexico Governor Bill Richardson told the Times he believes the Obama administration will move forward with potential changes following mid-term elections in November.
Separately, a Cuban delegation visiting Azerbaijan this week raised the possibility of cooperation between the two countries in the oil and energy sectors.
Repsol spokesman Kristian Rix says the company has drilling rights to a 4,500-square-kilometer area in the Straits of Florida but would not give a timeline on when oil exploration would begin.
Cuba currently imports most of its oil and gas from Venezuela, but oil experts say there could be significant offshore reserves. A study earlier this year by the U.S. Geological Survey estimated that Cuba might be able to access 4.6 billion barrels of oil.
The plans by Cuba and Repsol to drill for oil are raising concerns in the United States because of the proximity to the Gulf of Mexico, where an explosion aboard a BP oil rig in April led to the worst oil spill in U.S. history.
Florida Democratic Senator Bill Nelson is urging the White House to pressure the Cuban government to abandon its offshore drilling plans.
Scientists warn any oil from a spill off Cuba's north coast could reach the southeastern United States within days. And experts worry difficult relations between the U.S. and Cuba's communist government could hurt efforts to respond to a potential disaster.
The U.S. State Department says U.S. companies can be licensed to provide oil spill prevention and clean-up support to Cuba.
There are also concerns that the U.S. trade embargo is complicating Cuba's efforts to safely drill for oil.
The embargo calls for sanctions against companies that supply more than 10 percent of the parts for any vessel operating in Cuban waters.
To get around the embargo, Spanish energy firm Repsol has been working with an Italian company to build an oil exploration rig in China. The rig is expected to arrive in Cuba early next year.
Despite the concerns, a Cuban official visiting the U.S. says he is confident Cuba can drill for oil safely.
Luis Alberto Barreras Canizo of Cuba's Ministry of Science, Technology and the Environment told the McClatchy Newspaper Service that Cuba's environmental framework is "very progressive." Barreras was in Sarasota, Florida this week for a meeting with American and Mexican officials on marine research and conservation.
Meanwhile, the New York Times reports some U.S. officials see Cuba's oil ambitions as a chance to loosen the trade embargo and allow U.S. energy companies to pursue more opportunities in Cuba.
New Mexico Governor Bill Richardson told the Times he believes the Obama administration will move forward with potential changes following mid-term elections in November.
Separately, a Cuban delegation visiting Azerbaijan this week raised the possibility of cooperation between the two countries in the oil and energy sectors.
September 29, 2010 - SANTIAGO: Chile Generator Colbun Aims To Expand Capacity 63% By 2015 (CHILE)
Source: Wall Street Journal
Chilean power generator Colbun SA (COLBUN.SN) plans to increase its installed capacity by 63% by 2015, the company said late Monday.
The expansion plan comes to keep up with electricity demand on the central SIC grid, Chile's largest, which is forecast to grow around 5.7% annually over the next five years.
Colbun, currently the second largest generator on the SIC grid, expects to expand capacity from 2,620 megawatts to 4,278 mw, according to a company presentation.
The SIC grid supplies energy to over 90% of the Andean nation's population and covers an area from northern Tal Tal to the southern island of Chiloe.
Over the next five years, Colbun also plans to invert its current mix of installed capacity to 52% hydroelectric and 48% thermoelectric, from 52% thermoelectric and 48% hydroelectric currently.
The projects slated to come online by 2015 include the 150 mw San Pedro and 316 mw Angostura hydroelectric projects, the 342 mw Santa Maria I and 350 mw Santa Maria II coal-fired projects, and some 500 mw in non-conventional, renewable energy sources, such as geothermal, wind, biomass and small-scale hydroelectric.
Colbun's expansion plans don't consider the $3.2 billion HidroAysen hydroelectric joint venture project in Chile's far south, which it is developing with power-generator Empresa Nacional de Electricidad SA (EOC, ENDESA.SN).
The 2,750 mw hydropower project, which opponents criticize because it includes plans to lay a 2,000-kilometer (1,240 miles) transmission line through pristine land and to dam both the Baker and Pascua rivers, has yet to receive environmental approval.
The expansion plan comes to keep up with electricity demand on the central SIC grid, Chile's largest, which is forecast to grow around 5.7% annually over the next five years.
Colbun, currently the second largest generator on the SIC grid, expects to expand capacity from 2,620 megawatts to 4,278 mw, according to a company presentation.
The SIC grid supplies energy to over 90% of the Andean nation's population and covers an area from northern Tal Tal to the southern island of Chiloe.
Over the next five years, Colbun also plans to invert its current mix of installed capacity to 52% hydroelectric and 48% thermoelectric, from 52% thermoelectric and 48% hydroelectric currently.
The projects slated to come online by 2015 include the 150 mw San Pedro and 316 mw Angostura hydroelectric projects, the 342 mw Santa Maria I and 350 mw Santa Maria II coal-fired projects, and some 500 mw in non-conventional, renewable energy sources, such as geothermal, wind, biomass and small-scale hydroelectric.
Colbun's expansion plans don't consider the $3.2 billion HidroAysen hydroelectric joint venture project in Chile's far south, which it is developing with power-generator Empresa Nacional de Electricidad SA (EOC, ENDESA.SN).
The 2,750 mw hydropower project, which opponents criticize because it includes plans to lay a 2,000-kilometer (1,240 miles) transmission line through pristine land and to dam both the Baker and Pascua rivers, has yet to receive environmental approval.
September 29, 2010 - SANTIAGO: Southern region could hold a lot of oil - executive - (CHILE)
Source: Business News Americas
Source: Business News Americas
The south of Chile is becoming appealing to oil and gas exploration companies, according to Dwayne Warkentin, CEO of Canada's Madalena Ventures.
"Chile is one of the countries we are strongly looking at," Warkentin told BNamericas. "We think that for sure there is potential in the south of Chile."
Magdalena has interest in three exploratory blocks in Argentina's Neuquen basin but could potentially look into acquiring new assets in the region, according to the CEO.
"We were really very surprised by GeoPark's success with its oil discovery," Warkentin said. "I think the good acreage in Chile might already be held. So the best bet is to make a deal with someone rather than to go in on new blocks."
London-listed GeoPark (LSE: GPK), which conducts E&P in the south of Chile along with state oil company Enap and a handful of other international oil companies, recently announced an internal 2P estimate of 55Mboe following success at its Guanaco 4 oil well.
"I have to say when I first looked at Chile three years ago with all those new blocks coming up the process was a little long, the time horizon for our kind of company to commit dollars was not good enough. Neuquen allowed us to move faster than in Chile," he continued. "But terms are improving there."
"Chile is one of the countries we are strongly looking at," Warkentin told BNamericas. "We think that for sure there is potential in the south of Chile."
Magdalena has interest in three exploratory blocks in Argentina's Neuquen basin but could potentially look into acquiring new assets in the region, according to the CEO.
"We were really very surprised by GeoPark's success with its oil discovery," Warkentin said. "I think the good acreage in Chile might already be held. So the best bet is to make a deal with someone rather than to go in on new blocks."
London-listed GeoPark (LSE: GPK), which conducts E&P in the south of Chile along with state oil company Enap and a handful of other international oil companies, recently announced an internal 2P estimate of 55Mboe following success at its Guanaco 4 oil well.
"I have to say when I first looked at Chile three years ago with all those new blocks coming up the process was a little long, the time horizon for our kind of company to commit dollars was not good enough. Neuquen allowed us to move faster than in Chile," he continued. "But terms are improving there."
September 30, 2010 - SANTIAGO: Chile HidroAysen Possibly Starting Operations In 2018-2019 (CHILE)
Source: Fox Business
Source: Fox Business
Chile's giant hydroelectric HidroAysen project could bring the first of its five power plants online in 2018 or 2019, Energy Minister Ricardo Raineri said Thursday.
The $3.2-billion HidroAysen project, a joint venture between Chilean power generators Empresa Nacional de Electricidad SA (EOC, ENDESA.SN) and Colbun SA (COLBUN.SN), still needs to get environmental approval and recently requested more time to respond to comments on its environmental-impact study.
"If all the [environmental] studies for HidroAysen, including for the transmission line, run smoothly, they'll probably get approval for the project at the end of 2013 and their investment decision will be made in 2014...and from there the first plant will be in operation in four or five years," Raineri said in a speech to the Asimet metallurgical industry trade group.
After first submitting the project's environmental-impact study in August 2008, the environmental-approval process has been plagued with delays.
The controversial 2,750-megawatt hydropower project consists of five power plants on the Baker and Pascua rivers in the southern Aysen region. Fierce critics of the project oppose its plans to damn the rivers and plans for a transmission line that would span nearly 2,000 kilometers through pristine land.
Chile, which currently has some 15,000 megawatts of installed capacity, needs to add nearly 10,000 megawatts over the next 10 years in order to keep up with forecasts for rising energy demand as the Andean nation's gross domestic product is expected to grow by 5% to 6% annually over the period.
"Between now and 2013 we've got some 2,500 megawatts covered in projects that are already undergoing construction," Raineri said. "That leaves an additional 7,500 megawatts that we need install from 2014 onwards. We're very aware of the fact that the energy sector is vital for the nation's growth."
One of conservative President Sebastian Pinera's main goals is to have Chile's economy expand by 6% annually during his four-year term.
The $3.2-billion HidroAysen project, a joint venture between Chilean power generators Empresa Nacional de Electricidad SA (EOC, ENDESA.SN) and Colbun SA (COLBUN.SN), still needs to get environmental approval and recently requested more time to respond to comments on its environmental-impact study.
"If all the [environmental] studies for HidroAysen, including for the transmission line, run smoothly, they'll probably get approval for the project at the end of 2013 and their investment decision will be made in 2014...and from there the first plant will be in operation in four or five years," Raineri said in a speech to the Asimet metallurgical industry trade group.
After first submitting the project's environmental-impact study in August 2008, the environmental-approval process has been plagued with delays.
The controversial 2,750-megawatt hydropower project consists of five power plants on the Baker and Pascua rivers in the southern Aysen region. Fierce critics of the project oppose its plans to damn the rivers and plans for a transmission line that would span nearly 2,000 kilometers through pristine land.
Chile, which currently has some 15,000 megawatts of installed capacity, needs to add nearly 10,000 megawatts over the next 10 years in order to keep up with forecasts for rising energy demand as the Andean nation's gross domestic product is expected to grow by 5% to 6% annually over the period.
"Between now and 2013 we've got some 2,500 megawatts covered in projects that are already undergoing construction," Raineri said. "That leaves an additional 7,500 megawatts that we need install from 2014 onwards. We're very aware of the fact that the energy sector is vital for the nation's growth."
One of conservative President Sebastian Pinera's main goals is to have Chile's economy expand by 6% annually during his four-year term.
September 30,2010 - QUITO: Foreign oil companies in Ecuador (ECUADOR)
Source: Agency
Unrest erupted in Ecuador on Thursday with soldiers taking control of the main airport and police demonstrating in the streets while President Rafael Correa considered dissolving a deadlocked Congress. [ID:nN30130945]
There was no immediate signs of any impact on the oil sector in OPEC's smallest member, which rejoined the global exporter group under Correa and has seen its output rise in recent years to an average of 470,000 barrels per day (bpd).
About 44 percent of that is extracted by private companies and the rest by state-run firms including Petroecuador, Petroamazonas and Rio Napo. Ecuador is a top 10 oil supplier to the United States, shipping about 225,000 bpd in recent months. Below is a list of foreign oil companies involved in Ecuador's oil production:
* Andes Petroleum, a consortium led by the Chinese National Petroleum Corp, produces some 36,000 bpd from its Tarapoa block, in the northeast of the country. It is also a stakeholder in a heavy crude pipeline.
* Agip Oil, a unit of Italy's ENI (ENI.MI: Quote), is extracting around 16,000 bpd at Block 10 in the Ecuadorean Amazon region.
* Ecuador TLC, a unit of Brazil's Petrobras (PETR4.SA: Quote) (PBR.N: Quote), pumps around 23,000 bpd from Block 18 in the Oriente basin. It is a stakeholder in the heavy crude pipeline.
* Spain's Repsol-YPF (REP.MC: Quote), one of Ecuador's largest investors, operates block 16 with 41,000 bpd of production and also takes part of the heavy crude pipeline.
* Chinese company Petroriental has two blocks with output at 13,900 bpd.
There was no immediate signs of any impact on the oil sector in OPEC's smallest member, which rejoined the global exporter group under Correa and has seen its output rise in recent years to an average of 470,000 barrels per day (bpd).
About 44 percent of that is extracted by private companies and the rest by state-run firms including Petroecuador, Petroamazonas and Rio Napo. Ecuador is a top 10 oil supplier to the United States, shipping about 225,000 bpd in recent months. Below is a list of foreign oil companies involved in Ecuador's oil production:
* Andes Petroleum, a consortium led by the Chinese National Petroleum Corp, produces some 36,000 bpd from its Tarapoa block, in the northeast of the country. It is also a stakeholder in a heavy crude pipeline.
* Agip Oil, a unit of Italy's ENI (ENI.MI: Quote), is extracting around 16,000 bpd at Block 10 in the Ecuadorean Amazon region.
* Ecuador TLC, a unit of Brazil's Petrobras (PETR4.SA: Quote) (PBR.N: Quote), pumps around 23,000 bpd from Block 18 in the Oriente basin. It is a stakeholder in the heavy crude pipeline.
* Spain's Repsol-YPF (REP.MC: Quote), one of Ecuador's largest investors, operates block 16 with 41,000 bpd of production and also takes part of the heavy crude pipeline.
* Chinese company Petroriental has two blocks with output at 13,900 bpd.
September 30,2010 - QUITO: Giving up oil production for the greater good (ECUADOR)
Source: Miami Herald
Source: Miami Herald
On the day in August that BP and the Obama administration announced that they finally had control over the oil spill that spewed about 5 million gallons of petroleum into the Gulf of Mexico, Ecuador and the United Nations Development Fund (UNDP) quietly announced a plan to leave unexploited some 846 million barrels of proven crude reserves lying under the Yasuni National Park in the Amazonian rain forest of Ecuador.Together Ecuador and UNDP propose to support this effort by raising $3.6 billion from other countries, individuals and institutions around the world, a small fraction of the amount already spent by BP and the U.S. government to mitigate the damage of the Gulf of Mexico disaster. It also is only half of the value of the underground oil that today represents 20 percent of Ecuador's entire petroleum reserves. Our contribution is to forego the other $3.6 billion.Why would a small oil-producing country like ours forego more than $7 billion in certain revenue, given the poverty and basic needs of our people? It stems from the vision of our president, our constitution and our Ecuadorean notion of Buen Vivir -- Good Living. Buen Vivir is a concept written into the new constitution put forward by President Rafael Correa that Ecuadoreans ratified in 2008. It is the underpinning of everything we try to do as a government in economic development, conservation and global affairs. At its elemental level Buen Vivir speaks to the aspiration of our government to provide all Ecuadorians with a decent living standard supported by an ethical government that depends upon their engagement and operates transparently. Our constitution also endows nature with the right of protection against harmful exploitation.But there also is an international notion of good living, and we think that extends to protecting the environment upon which humanity depends and finding ways to power our modern society without crushing those people who choose a different paradigm of good living. In the case of the Yasuni rain forest, not only does it house oil, but it is one of the most biodiverse regions of the world, with more tree species than in all of North America, more documented insect species than any forest in the world and a critical habitat for threatened mammals, birds, bats and amphibians. UNESCO declared it a World Biosphere Reserve in 1989. The land that makes up Yasuni's Ishpingo, Tambococha and Tiputini fields (ITT) also is home to several indigenous communities whose well-being is guaranteed by our constitution and whose idea of Buen Vivir is as valued as it is different from that of other Andean populations. There are about 3,000 people in these communities, incluiding the Tagaeri and Taromenane, the last two indigenous groups still living in voluntary isolation in Ecuador.The Yasuni-ITT proposition is simple: the world contributes to the UNDP trust fund and acquires bonds through a program that the trust will administer. Ecuador agrees not to allow drilling of the oil and to invest the revenue in sustainable and eco-friendly development in the Amazon region. The trade-off will prevent the discharge into the world's atmosphere of more than 400 million metric tons of carbon that would be emitted if the oil were put to use. And over time, donors to the fund may profit from the exchange of their bonds as a global cap and trade program gives them value.For the first time in history an oil producing country -- petroleum currently accounts for about one-third of our gross domestic product -- will give up development of its reserves for a greater good. It only works, of course, if the countries and leaders who have tried to forge global accords to protect the environment agree to share with us the responsibility for keeping that oil underground.The Yasuni-ITT plan has been years in the making. We have received encouragement from European governments, NGOs, major philanthropists and now the UNDP. Ahead is the real test. Ecuador is ready to lead other countries away from dependency on fossil fuels and toward a world committed to conservation, protection of indigenous people and toward a carbon-free vision.Are the richer countries of the planet prepared to join us?Lenín Voltaire Moreno Garcés has been the vice pesident of Ecuador since January 2007. He addressed the U.N. General Assembly in New York on Monday seeking support for the Yasuni Initiative.
September 30,2010 - MEXICO CITY: Interior not ready to lift offshore drilling ban (MEXICO)
Source: Politico
Interior Secretary Ken Salazar is standing his ground amid calls from Gulf state lawmakers and industry to immediately end the deepwater oil drilling ban. Salazar unveiled a pair of new rules for offshore drillers Thursday and indicated he needs proof industry has reduced the risk of another BP-like oil spill before he delivers a final verdict. "We will only lift the moratorium when I as secretary of Interior am comfortable that we have significantly reduced those risks," he said at a speech at the Wilson Center in Washington, D.C. The rules go into effect immediately and create tough new standards for the equipment and technology used in offshore drilling, including requiring the independent certification of a well’s blowout preventer. They also include new workplace safety standards aimed at reducing human and organization errors, such as the ones believed to have played a role in the Deepwater Horizon rig explosion. "We are raising the bar for safety, oversight and environmental protection at every state of the development and drilling process,” Salazar said. Salazar suggested today that additional rules were on the way in the coming weeks and months, making it unclear how many steps remain before the deepwater ban is lifted. "The oil and gas industry needs to expect a dynamic regulatory environment," Salazar said. Thursday’s rules include many of the recommendations released in a preliminary report from the agency earlier this year, and aim to address a number of safety concerns that have arisen from a series of investigations into the causes of the spill. The moratorium expires at the end of November but Salazar and other administration officials have suggested they hope to lift it sooner, especially given the uproar from Gulf state lawmakers about job losses due to the ban. But Salazar took a hard line on the political maneuvering surrounding the moratorium in a New York Times interview Thursday. “We will lift it at our own time and when we’re ready, and not based on political pressure from anyone,” Salazar told the newspaper. Sen. Mary Landrieu (D-La.) is blocking Obama’s nominee for the director of the Office of Management and Budget until drilling resumes. “Let my people go. Let them get back to work,” Landrieu told reporters Wednesday. “I know that [the administration is] working hard but all of that good will and wish and leaning forward is not resulting in more permits being issued.” Landrieu also stressed that she won’t necessarily lift her hold when the administration lifts the moratorium. “It doesn’t do me any good to technically have the moratorium lifted if there are no permits issued,” she said. The environmental community was quick to applaud the new rules – and Salazar’s suggestion that more were on the way – and said that the reforms help pave the way for the administration to lift the deepwater drilling moratorium earlier than the Nov. 30 deadline. “I always believed that the moratorium could be lifted once a stronger safety net was in place, and I think we have that now,” Elgie Holstein, a senior director at the Environmental Defense Fund.
September 30, 2010 - MEXICO CITY: Mexico's Pemex says natural gas pipeline bursts (MEXICO)
Source: Agency
Source: Agency
A natural gas pipeline burst in southern Mexico on Wednesday but did not catch fire, state oil company Pemex said.
"It was brought under control," Pemex [PEMX.UL] said in a statement.
No injuries were reported in the explosion, which happened on the Cactus-El Misterio pipeline in the state of Chiapas.
"It was brought under control," Pemex [PEMX.UL] said in a statement.
No injuries were reported in the explosion, which happened on the Cactus-El Misterio pipeline in the state of Chiapas.
September 30, 2010 - MEXICO CITY: Mexico may launch claim over BP spill (MEXICO)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Mexico's federal government could join a list of its states suing the companies blamed for the disastrous Gulf oil spill, claiming damage to fishing and tourism.
Earlier this month, three Mexican states sued UK oil giant BP and its contractors Transocean, as well as affiliated businesses.
The northern state of Tamaulipas - which shares a border with Texas - and Veracruz with its long coastline on the Gulf of Mexico, both said the spill posed risks to beaches and marine life that would cause lost profits and potentially large clean-up bills.
Quintana Roo on the Yucatan Peninsula, home to major tourist destinations like Cancun, also filed suit in a Texas court on 15 September.
"We expect the rest of the (Mexican) Gulf states will join the endeavor and potentially ... Mexico," said lawyer Enrique Serna, whose San Antonio-based practice represents the states.
The lawsuits are believed to be the first by foreign governments against the petroleum giant BP and its contractors in the aftermath of April's Deepwater Horizon rig explosion and ensuing oil spill, Serna said.
More than 300 civil lawsuits have already been filed in the US by out-of-work rig workers, fishermen and hotel workers, and that number is expected to increase.
Mexico's federal government has been studying the viability of a legal claim against BP, the environment minister told Reuters in an interview in June, adding that the remnants of the oil spill could hit Mexico's shores next month.
As of August, the government of Mexico had spent about $35 million monitoring the spill, according to media reports.
"It is only natural for them to sue BP and the rest of the corporate defendants to reclaim such sums," Serna said.
"There are a number of damages that eventually we'll be able to quantify but only time will tell," he said.
Serna said he also expects more than 1500 individual claimants in Mexico - from fishermen to restaurant operators who have been forced to pay more for fish from Pacific waters - to eventually press claims.
A spokeswoman for Halliburton said the allegations appeared to be without merit, but BP and Transocean declined to comment.
BP has set up a $20 billion fund to compensate those who lost livelihoods or income due to the spill, but it excludes foreign claimants. The company has paid out over $240 million thus far and has said it will add to the size of the fund if necessary.
US District Court Judge Carl Barbier was recently named to navigate the vast array of claims prompted by the spill that some expect to be among the costliest and most complex litigation in US history, reported Reuters.
Earlier this month, three Mexican states sued UK oil giant BP and its contractors Transocean, as well as affiliated businesses.
The northern state of Tamaulipas - which shares a border with Texas - and Veracruz with its long coastline on the Gulf of Mexico, both said the spill posed risks to beaches and marine life that would cause lost profits and potentially large clean-up bills.
Quintana Roo on the Yucatan Peninsula, home to major tourist destinations like Cancun, also filed suit in a Texas court on 15 September.
"We expect the rest of the (Mexican) Gulf states will join the endeavor and potentially ... Mexico," said lawyer Enrique Serna, whose San Antonio-based practice represents the states.
The lawsuits are believed to be the first by foreign governments against the petroleum giant BP and its contractors in the aftermath of April's Deepwater Horizon rig explosion and ensuing oil spill, Serna said.
More than 300 civil lawsuits have already been filed in the US by out-of-work rig workers, fishermen and hotel workers, and that number is expected to increase.
Mexico's federal government has been studying the viability of a legal claim against BP, the environment minister told Reuters in an interview in June, adding that the remnants of the oil spill could hit Mexico's shores next month.
As of August, the government of Mexico had spent about $35 million monitoring the spill, according to media reports.
"It is only natural for them to sue BP and the rest of the corporate defendants to reclaim such sums," Serna said.
"There are a number of damages that eventually we'll be able to quantify but only time will tell," he said.
Serna said he also expects more than 1500 individual claimants in Mexico - from fishermen to restaurant operators who have been forced to pay more for fish from Pacific waters - to eventually press claims.
A spokeswoman for Halliburton said the allegations appeared to be without merit, but BP and Transocean declined to comment.
BP has set up a $20 billion fund to compensate those who lost livelihoods or income due to the spill, but it excludes foreign claimants. The company has paid out over $240 million thus far and has said it will add to the size of the fund if necessary.
US District Court Judge Carl Barbier was recently named to navigate the vast array of claims prompted by the spill that some expect to be among the costliest and most complex litigation in US history, reported Reuters.
September 30, 2010 - MEXICO CITY: Jasminia stays on for Pemex (MEXICO)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Prosafe and Interpetroleum Services have agreed to extend the bareboat contract for use of the semi-submersible accommodation rig Jasminia in the Cantarell field for Pemex in Mexico for 159 days.
This is the first of a series of mutually agreeable extensions with a duration of up to six months each. If all extensions are agreed, the contract will run until mid-February 2013.
The contract runs now until 8 June 2011. The value of the extension of the bareboat contract is about $7.2 million, Prosafe said today.
This is the first of a series of mutually agreeable extensions with a duration of up to six months each. If all extensions are agreed, the contract will run until mid-February 2013.
The contract runs now until 8 June 2011. The value of the extension of the bareboat contract is about $7.2 million, Prosafe said today.
September 30, 2010 - MEXICO CITY: Mexico still seeking oil hedges (MEXICO)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Mexico's finance minister said today the government will continue to seek opportunities to hedge its crude oil exports.
"We're looking, as we do every year, for the best opportunity to have oil export hedges for the coming year," Finance Minister Ernesto Cordero told reporters.
Today, the Financial Times reported Mexico - whose oil exports fund more than a third of the federal government - was looking to hedge next year’s net oil exports at $65 to $70 per barrel.
It also reported the country will hedge less than 200 million barrels next year, down from 230 million barrels this year.
Cordero declined to confirm those figures but added, "We are looking for the best moment to hedge."
Mexican officials have previously said they intend to buy securities to guarantee a minimum price for the country's oil exports, according to a Reuters report.
In his budget for next year, President Felipe Calderon proposed an average price of $63 per barrel for the country's oil export basket.
Mexico has aimed to hedge as much of its net oil exports as possible near the oil price assumed in the budget since last year.
The country's rapidly growing need for oil product imports amid a shortage of refining capacity and slowly falling crude output cut the volume that needs to be hedged each year.
Late last year, Mexico paid $1.172 billion to guarantee a minimum $57 per barrel for this year’s oil exports.
"We're looking, as we do every year, for the best opportunity to have oil export hedges for the coming year," Finance Minister Ernesto Cordero told reporters.
Today, the Financial Times reported Mexico - whose oil exports fund more than a third of the federal government - was looking to hedge next year’s net oil exports at $65 to $70 per barrel.
It also reported the country will hedge less than 200 million barrels next year, down from 230 million barrels this year.
Cordero declined to confirm those figures but added, "We are looking for the best moment to hedge."
Mexican officials have previously said they intend to buy securities to guarantee a minimum price for the country's oil exports, according to a Reuters report.
In his budget for next year, President Felipe Calderon proposed an average price of $63 per barrel for the country's oil export basket.
Mexico has aimed to hedge as much of its net oil exports as possible near the oil price assumed in the budget since last year.
The country's rapidly growing need for oil product imports amid a shortage of refining capacity and slowly falling crude output cut the volume that needs to be hedged each year.
Late last year, Mexico paid $1.172 billion to guarantee a minimum $57 per barrel for this year’s oil exports.
Peru
September 28, 2010 - LIMA: Peru's Enersur signs contract for Las Bambas mine project (PERU)
Source: Andina
September 28, 2010 - LIMA: Peru's Enersur signs contract for Las Bambas mine project (PERU)
Source: Andina
Peru's Enersur SA, a unit of Suez Energy International, has signed a contract to provide electricity for the Las Bambas copper project in southern Peru. "The supplies outlined in the contract are valid for 10 years and 10 months from the time the consumption starts, and include successive and automatic two-year extensions," Enersur said in a filing late Tuesday with Peru's securities regulatory agency.
The Las Bambas project is being developed by Xstrata Copper, which has said production is expected from the second quarter of 2014.
According to Dow Jones Newswires, the mine is expected to produce 400,000 metric tons a year of copper in concentrate, alongside "significant" quantities of gold, silver and molybdenum, the company has said.
The Las Bambas project is being developed by Xstrata Copper, which has said production is expected from the second quarter of 2014.
According to Dow Jones Newswires, the mine is expected to produce 400,000 metric tons a year of copper in concentrate, alongside "significant" quantities of gold, silver and molybdenum, the company has said.
September 29, 2010 - LIMA: Conduit Capital sells Peruvian power company to Inkia Energy (PERU)
Source: PEHUB
Source: PEHUB
Conduit Capital Partners, a private equity firm that deals in energy infrastructure, has sold its interest in Peru’s largest electricity company, Edegel, to Inkia Energy, its partner in the investment, for $50 million. Conduit initially bought its share through its Latin Power II fund for $21 million.
Conduit Capital Partners LLC, a private equity investment firm focused on energy infrastructure investment and development in Latin America and the Caribbean, today announced that it has sold its indirect interest in Edegel, Peru’s largest electric power company, for $50 million. The interest was purchased by Inkia Energy, Conduit’s current partner in this investment.
“This sale is a further validation of the success of Conduit’s investment philosophy and performance,” stated George Osorio, Managing Partner at Conduit. “Edegel was an exciting investment in the fastest-growing economy in Latin America over the last several years with a government that is dedicated to meeting its country’s growing infrastructure needs. We are pleased to have taken part in the growth of Edegel and Peru, and we look forward to our continued involvement in Peru’s energy sector through Latin Power III’s ownership of Kuntur, a $3 billion gas and liquids pipeline being developed in the south of Peru.”
Latin Power II acquired its seven percent indirect interest in Edegel for approximately $21 million in 2002. Through Edegel’s sale of electric power through contracts and power on the spot market, Conduit received just under $20 million in distributions up to the time of sale. Conduit’s total realization on its investment was 3.3x invested capital.
This transaction constitutes the sale of the last remaining asset of Conduit Capital Partners’ Latin Power II Fund. Latin Power II is a vintage 1998 fund that was closed with $157 million of committed capital. Latin Power III has $392 million of capital, was raised in 2006 and is now 90% committed.
Conduit Capital Partners LLC, a private equity investment firm focused on energy infrastructure investment and development in Latin America and the Caribbean, today announced that it has sold its indirect interest in Edegel, Peru’s largest electric power company, for $50 million. The interest was purchased by Inkia Energy, Conduit’s current partner in this investment.
“This sale is a further validation of the success of Conduit’s investment philosophy and performance,” stated George Osorio, Managing Partner at Conduit. “Edegel was an exciting investment in the fastest-growing economy in Latin America over the last several years with a government that is dedicated to meeting its country’s growing infrastructure needs. We are pleased to have taken part in the growth of Edegel and Peru, and we look forward to our continued involvement in Peru’s energy sector through Latin Power III’s ownership of Kuntur, a $3 billion gas and liquids pipeline being developed in the south of Peru.”
Latin Power II acquired its seven percent indirect interest in Edegel for approximately $21 million in 2002. Through Edegel’s sale of electric power through contracts and power on the spot market, Conduit received just under $20 million in distributions up to the time of sale. Conduit’s total realization on its investment was 3.3x invested capital.
This transaction constitutes the sale of the last remaining asset of Conduit Capital Partners’ Latin Power II Fund. Latin Power II is a vintage 1998 fund that was closed with $157 million of committed capital. Latin Power III has $392 million of capital, was raised in 2006 and is now 90% committed.
September 30, 2010 - CARACAS: Venezuela's Chavez Plans Trip To China, A Growing Partner (VENEZUELA)
Source: Nasdaq
CARACAS -(Dow Jones)- President Hugo Chavez said he's planning a trip to China before December, and said that by 2012 his government will be sending the Chinese 1 million barrels a day of crude oil.
"We're going to go to China with lots of enthusiasm," he told reporters late Monday. "It's a country that has become a strategic ally for Venezuela."
The Venezuelan government currently ships around 400,000 barrels a day to China, and Chavez said that "we're now headed for half a million" barrels a day. By 2012, he said, China would be receiving a full 1 million barrels a day of Venezuelan crude.
Chavez's plans to increase oil shipments to China are part of a plan to reduce the need to sell to the U.S., which currently gets close to 1 million barrels a day from Venezuela, making it Venezuela's top buyer. Chavez is an outspoken critic of the U.S. government, which he says engages in imperialism.
Venezuela's president, a socialist who says he has a "deep respect" for China, said he hoped his visit would dovetail with "the start of construction of the first Venezuelan refinery in China."
China National Petroleum Corp, or CNPC and Venezuela's state-run Petroleos de Venezuela SA, or PDVSA, plan a major refinery in southern China's Guangdong province to process Venezuelan oil.
"We're going to go to China with lots of enthusiasm," he told reporters late Monday. "It's a country that has become a strategic ally for Venezuela."
The Venezuelan government currently ships around 400,000 barrels a day to China, and Chavez said that "we're now headed for half a million" barrels a day. By 2012, he said, China would be receiving a full 1 million barrels a day of Venezuelan crude.
Chavez's plans to increase oil shipments to China are part of a plan to reduce the need to sell to the U.S., which currently gets close to 1 million barrels a day from Venezuela, making it Venezuela's top buyer. Chavez is an outspoken critic of the U.S. government, which he says engages in imperialism.
Venezuela's president, a socialist who says he has a "deep respect" for China, said he hoped his visit would dovetail with "the start of construction of the first Venezuelan refinery in China."
China National Petroleum Corp, or CNPC and Venezuela's state-run Petroleos de Venezuela SA, or PDVSA, plan a major refinery in southern China's Guangdong province to process Venezuelan oil.
September 29, 2010 - Latin America's region a growing fuel importer
Source: Pretroleumworld
PDVSA-Hess HOVENSA, 500,000 barrels per day (BPD in the Virgin Islands, is among the top ten largest refineries in the world. NEW YORK Petroleumworld.com, Sep 29, 2010 In Latin America, quick economic growth has boosted fuel demand and the sluggish pace of refinery expansions is making the region a growing fuel importer, including from the United States. Reliance on fuel imports may continue in the near term, since the region, including Mexico , is only planning to add 100,000 barrels-per-day (bpd) in refining capacity through 2011, and at most 475,000 bpd through 2013.
Brazil holds at least 2 million bpd of capacity and has plans to increase capacity by 50 percent, but that expansion will mostly come in 2013 and beyond. Venezuela holds a fourth of South and Central America's combined 5 million bpd capacity. But the fuel exporter has seen several of its refineries falter due to poor maintenance. Mexico, with around 1.7 million bpd capacity, has not built a new plant in three decades and depends on imports for 40 percent of its gasoline.
Two large refineries on the Caribbean islands of Aruba and Curacao have been completely or partially idle this year. Analysis: Below is a factbox detailing known plans to expand Latin America's refining infrastructure through 2013. Several larger expansion projects are planned for later in the decade.
* ARGENTINA: no significant expansion planned by 2013.
* BOLIVIA: no significant expansion planned by 2013.
* BRAZIL: For 2010, Petrobras plans to expand Clara Camarao refinery capacity by 30,000 barrels. In 2013, the company plans to inaugurate a 230,000 bpd refinery known as Abreu e Lima in northeastern Brazil.
* CENTRAL AMERICA: no significant expansion planned by 2013.
* CHILE: no significant expansion planned by 2013.
* COLOMBIA: In 2013, Ecopetrol plans to expand its Cartagena refinery to 165,000 bpd, up 85,000 barrels from its 80,000 bpd capacity now.
* ECUADOR: Ecuador has pledged to invest up to $700 million in an upgrade of its 110,000 bpd Esmeraldas refinery, but no date has been set and experts say the expansion is unlikely to happen by 2013.
* MEXICO: Pemex has plans to expand its 170,000 bpd Minatitlan refinery in early 2011, boosting capacity to 240,000 bpd. The project should add 57,000 bpd of incremental gasoline supply and 62,000 bpd of incremental distillate supply.
* PERU: no significant expansion planned by 2013
* VENEZUELA: PDVSA plans to begin a new refinery called Batalla de Santa Ines in Central Venezuela to process 60,000 bpd in 2012, and further expand in the future.
* URUGUAY: no significant expansion planned by 2013. Story compiled by Joshua Schneyer from
Brazil holds at least 2 million bpd of capacity and has plans to increase capacity by 50 percent, but that expansion will mostly come in 2013 and beyond. Venezuela holds a fourth of South and Central America's combined 5 million bpd capacity. But the fuel exporter has seen several of its refineries falter due to poor maintenance. Mexico, with around 1.7 million bpd capacity, has not built a new plant in three decades and depends on imports for 40 percent of its gasoline.
Two large refineries on the Caribbean islands of Aruba and Curacao have been completely or partially idle this year. Analysis: Below is a factbox detailing known plans to expand Latin America's refining infrastructure through 2013. Several larger expansion projects are planned for later in the decade.
* ARGENTINA: no significant expansion planned by 2013.
* BOLIVIA: no significant expansion planned by 2013.
* BRAZIL: For 2010, Petrobras plans to expand Clara Camarao refinery capacity by 30,000 barrels. In 2013, the company plans to inaugurate a 230,000 bpd refinery known as Abreu e Lima in northeastern Brazil.
* CENTRAL AMERICA: no significant expansion planned by 2013.
* CHILE: no significant expansion planned by 2013.
* COLOMBIA: In 2013, Ecopetrol plans to expand its Cartagena refinery to 165,000 bpd, up 85,000 barrels from its 80,000 bpd capacity now.
* ECUADOR: Ecuador has pledged to invest up to $700 million in an upgrade of its 110,000 bpd Esmeraldas refinery, but no date has been set and experts say the expansion is unlikely to happen by 2013.
* MEXICO: Pemex has plans to expand its 170,000 bpd Minatitlan refinery in early 2011, boosting capacity to 240,000 bpd. The project should add 57,000 bpd of incremental gasoline supply and 62,000 bpd of incremental distillate supply.
* PERU: no significant expansion planned by 2013
* VENEZUELA: PDVSA plans to begin a new refinery called Batalla de Santa Ines in Central Venezuela to process 60,000 bpd in 2012, and further expand in the future.
* URUGUAY: no significant expansion planned by 2013. Story compiled by Joshua Schneyer from
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