Argentina
September 22, 2010 - MONTEVIDEO: Mujica: sorry HMS Gloucester, but our priority is good relations with Argentina (URUGUAY)
Source: Mercopress
September 22, 2010 - MONTEVIDEO: Mujica: sorry HMS Gloucester, but our priority is good relations with Argentina (URUGUAY)
Source: Mercopress
Uruguayan president Jose Mujica told his cabinet that he had contacted the British ambassador to tell him why the Royal Navy HMS Gloucester bound for the Falkland Islands had been authorized to call in Montevideo and a few hours before arriving had clearance withdrawn.
On Monday, Mercopress based on its own sources reported that the ‘sequence of events” involving the South Atlantic patrol incident differed from those described by the Uruguayan Ministry of Defence spokesman who said that denying the Type 42 destroyer access to Montevideo was “business as usual”.
Mujica said he called British ambassador Patrick Mullee and the Foreign Affairs ministry (which gave the green light for HMS Gloucester) to explain the government’s decision which is above all the “priority” his government assigns to relations with Argentina plus the fact that the Malvinas issue “is very delicate”.
Anyhow, according to official sources, Mujica said that “this does not imply a concession to nobody, but rather to value the state of relations with Argentina and, --he emphasized-- we can’t take risks”.
The Uruguayan president added he was “quite surprised” how the news “had filtered”.
According to Mercopress sources in Uruguay, Falkland Islands and UK Defence, the request for HMS Gloucester, bound for the Falklands and sailing from Rio do Janeiro (where it had spent time), to call in Montevideo for supplies and fuel, was done well in advance of last week.
HMS Gloucester was due to visit Montevideo 15th-17th this month, and on the 14th she was cruising slowly towards the River Plate ready to arrive early am 15th when they received the word that due to ‘expected’ pressure from Argentina the call had been cancelled by Uruguay.
In the Falkland Islands, where HMS Gloucester arrived last week, the local radio station reported that the British military spokesperson at MPA has confirmed the news and “they are obviously disappointed with this last minute decision from the Uruguayan government, but respect their right to make it”.
The military spokesperson added that the British government has a longstanding close defence relationship with Uruguay and “this incident will not affect those good links”.
“The decision is seen as a solidarity gesture towards the Argentine government with which Uruguay is trying to improve relations”.
Mercopress also has reliable information that President Mujica contacts with the British ambassador actually took place last week in the midst of the incident (Sept. 14/15) when he personally turned up at the embassy.
On Tuesday President Mujica in his daily broadcast reaffirmed the importance of Argentina for Uruguay from a geographic, economic and social point of view.
“It’s simple and we must not forget, we live on this side of the River Plate and on the other side is Argentina and countries do not move. We must build our strategy and our future where we are, surrounded by whom we know, and the rest is speculation and has little to do with reality that hurts and bites”, said Mujica.
The Uruguayan president also pointed out the economic and tourist significance of Argentina for Uruguay, and the privileged logistic location of Uruguay with its rivers, water courses and navigable canals.
“These are issues we must make transparent and negotiate”, because they are “a mandate constructed by history but imposed by geography and have to do with our relation with Argentina”.
Mujica also mentioned what he described as a vital energy agreement for Uruguay’s future (almost ready to be signed) which is sharing a floating re-gasification plant with the River Plate neighbour and for which “we need an excellent diplomatic relation with Argentina”.
The president called on Uruguayans to remember the long Fray Bentos (pulp mills) conflict (dating back to 2006) which “we managed to overcome with diplomacy and with a constructive spirit, defending our national interests”.
Finally he said 400.000 Uruguayans live in Argentina, and Buenos Aires is the second largest Uruguayan city in the world.
“These Uruguayans are not foreigners, they feel they belong. It’s the only country (Argentina) in the world where this happens with us. This miracle should make us think”, concluded the Uruguayan president.
September 22, 2010 - BUENOS AIRES: Crown Point Completes Third Oil Well at Drilling Program in Argentina (ARGENTINA)
Source: Proactive Investors
Junior oil and gas company Crown Point Ventures has completed oil well EV 24, the third well of its three- well drilling program in the Golfo San Jorge Basin, Argentina, it said Wednesday.
The EV 24 well, which was completed in three separate zones, follows the completions of the EV 22 and EV 23 wells. The company has an 80% interest in the three-well program.
The first zone completed of the EV 24 well was a three metre zone in the Mina El Carmen formation, which during swab testing produced oil, at an 80% oil cut, at rates of 100 bbls of oil per day.
The other two zones were a five metre zone and a separate four metre zone in the Canadon Seco formation. During swab testing, these two zones produced oil at an 80% and 93% oil cut, respectively, for rates of 205 and 241 bbls of oil per day.
The EV 24 well, like its preceding wells, has created additional development drilling locations to be drilled later this year and in 2011, the company said.
Prior to the end of 2011, Crown Point expects to drill up to 12 more wells at El Valle, subject to financing. Between three and five of these wells are expected to be drilled either late this year or early next.
"We are pleased with the results from this drilling program, we had a 100% drilling success rate and experienced evaluation results at the upper end of the spectrum," said CEO Murray McCartney.
Just last month, the company reported that extended production testing at the EV 22 well generated flow rates of 443 barrels per day, of which 300 barrels per day was oil.
Earlier that month, Crown Point reported that the EV 23 well generated a cumulative test flow rate from the four zones between 250 and 300 barrels of oil per day, with the best response coming from a three metre section at 1005 metres that flowed with a 90% oil cut, at a rate of 180 bopd.
Canada-based Crown Point's main activities are focused in the onshore Golfo San Jorge and Neuquen Basins in Argentina, and the company is continually evaluating other growth opportunities in the region.
The company was up more than 3%, trading at $1.47 as of 11:05am ET on Wednesday.
September 22, 2010 - BUEN0S AIRES: Cash-strapped BP In Talks To Sell Major Oil Asset In Argentina (ARGENTINA)
Source: Official Wire
Cash-strapped BP is in talks with China's oil giant CNOOC to relieve itself of majority stake in Argentina's Pan American Energy LLC to raise cash for compensation claims.
BP is under mounting pressure to have cash ready for a spate of compensation claims over the Gulf of Mexico Deepwater Horizon disaster, the largest oil spill in U.S. history earlier this year.
BP and the China National Offshore Oil Corporation, the country's third largest national oil company and biggest offshore oil explorer, began talking about a further sale earlier this year after CNOOC acquired 20 percent of the Argentine company.
Pan American Energy is Argentina's second-largest oil producer, after Repsol YPF S.A., accounting for about 17 percent of the country's overall output.
Talks on a new deal that would give CNOOC control of the company appeared snagged over the final price tag. Industry analysts said the final price for the 60 percent, likely to be around $10 billion, would still require BP to raise another $20 billion in preparation for compensation payouts.
If implemented, this would be CNOOC's biggest purchase so far, after shopping for oil assets worth about $6 billion over the past four years.
China's national energy industries are implementing a state-led strategy to secure sources for hydrocarbons to meet existing and future demands in an expanding economy.
A question as yet unanswered is whether CNOOC, once in control of Pan American, would want to go it alone or would seek partnerships for a long-term operation, seen as a precursor to further Chinese acquisitions in Central and South America.
Meanwhile, CNOOC and China Petrochemical Corp. are in the market for a hefty share of Brazil's OGX Petroleo & Gas Participacoes S.A., which is conducting the largest private sector exploratory campaign in Brazil and owns oil fields in the Campos Basin.
OGX announced Monday it identified the presence of hydrocarbons in the Maastrichtian section of well 1-OGX-20-RJS, in the BM-C-41 block, in the shallow waters of the basin. OGX holds a 100 percent working interest in the block.
"This discovery highlights the importance of the Maastrichtian section in our blocks in the Campos Basin, where oil bearing reservoirs were initially identified in the OGX-5 well, Krakatoa prospect, and now were also found in the BM-C-41 block, once again presenting excellent permo-porosity characteristics," said Paulo Mendonca, general executive officer of OGX.
"The well OGX-20 marks the 1-year anniversary of the initiation of our exploratory campaign, which has demonstrated an unprecedented success rate and continues in full execution phase aiming for new discoveries and the delineation of the discoveries already made," Mendonca said.
Hydrocarbons were identified in two different levels in sandstone reservoirs in the Maastrichtian section of the OGX-20 well. The drilling of well OGX-20, also known as the Tupungato prospect, will follow to an estimated final depth of about 12,000 feet.
The OGX-20 well, located in the BM-C-41 block, is about 50 miles off the coast of the state of Rio de Janeiro at a water depth of about 430 feet. The rig Ocean Ambassador began drilling there Sept. 5.
September 21, 2010 - BUEN0S AIRES: Terra Energy to supply satellite surveillance on Argentine pipelines (ARGENTINA)
Source: Pipelines International
Terra Energy & Resource Technologies has entered into a Memorandum of Understanding (MoU) with Argentina’s Transportadora de Gas del Sur (TGS), to undertake a satellite monitoring trial for TGS’ pipeline assets.
Terra has proposed a satellite-based methodology to identify conditions which could lead to pipeline corrosion and other types of related costly breaks on TGS’ 6,000 km pipeline system.
If TGS deems the predictive results provided by Terra during the trial are accurate, a definitive contract could be negotiated.
The companies have been in discussions regarding solutions for pipeline monitoring issues that remain an ongoing challenge in transporting petroleum products through pipeline systems.
Terra Energy & Resource Technologies President Alexandre Agaian said “Satellite-based technologies are applicable to pipeline diagnostics issues potentially translating into major savings for gas transportation companies. Although this type of project is our first, we do not exclude the possibility that the research may be used to build universal spectral models for pipeline monitoring.”
September 22, 2010 - BUEN0S AIRES: Excelerate Energy announces the signing of a Term Sheet for a new LNG Import Project at Escobar, Argentina (ARGENTINA)
Source: Your Oil and Gas News
Excelerate Energy L.P. today announced the signing of a Term Sheet with a consortium formed by Argentina’s ENARSA S.A. and YPF S.A. to develop a second Argentinean liquefied natural gas (LNG) importation facility in Escobar, approximately 30 miles north of Buenos Aires..
The Escobar LNG import facility, complementary to the existing GasPort® operation south of Buenos Aires in Bahia Blanca, will allow delivery of up to an additional 500 million cubic feet of natural gas per day to Argentina’s market. Due to its favored location, the GasPort facility in Escobar will have a significant impact on the supply to Buenos Aires and the north of Argentina, adding flexibility and fast response to these growing markets..
“We are pleased to begin a project in partnership with ENARSA S.A. and YPF S.A.” said Rob Bryngelson, President and CEO of Excelerate Energy. “Excelerate Energy’s GasPort facility design has proven again to be an ideal solution for markets needing diverse energy sources, increased supply to meet growing demand, low capital investment and prompt project completion. The overwhelming success of the Bahía Blanca GasPort demonstrates the clear advantages and opportunities afforded by our Energy Bridge™ technology”.
The Escobar facility, scheduled for completion in May 2011, will be fully integrated with Argentina’s existing gas transmission utilities. The year-round facility will accommodate an Excelerate Energy 150,900m³ Energy Bridge Regasification Vessel® (EBRV®) receiving and regasifying LNG cargos via conventional LNG carriers utilizing Excelerate Energy’s proven Ship to Ship Transfer (STS) process alongside the jetty. In addition to providing basic engineering and design support, Excelerate will provide modular equipment and process control components based on its proven GasPort technology. .
Excelerate Energy’s first Argentine project, in collaboration with YPF, was to design a facility in the port city of Bahía Blanca. The Bahía Blanca LNG import terminal required minimal additional land-based infrastructure while providing flexibility, optimal storage and deliverability. The project took less than 12 months to design, permit and construct, at a fraction of the cost of a traditional onshore LNG terminal. .
Energy Bridge, Excelerate Energy’s proprietary floating LNG regasification and delivery system, combines the purpose-built EBRV® with a connection to a receiving facility. Excelerate’s specially designed EBRVs allow LNG to be vaporized onboard the ships so that it can be directly fed into natural gas pipelines. The EBRVs can load and unload liquid cargo in the same manner as standard LNG tankers yet also retain the flexibility to discharge the LNG as high pressure natural gas through the use of two independent methods. In an offshore, deepwater application, these vessels are specially equipped to discharge natural gas through the EBRV’s connection with a Submerged Turret Loading (STL™) buoy system (Gateway). When dockside, the EBRVs discharge natural gas through a high pressure gas manifold located forward of the vessel’s LNG loading arms (GasPort)..
Bolivia
September 21, 2010 - LA PAZ: Govt to decide on partner for lithium development in December (BOLIVIA)
Source: Business News Americas
The Bolivian government will decide in December which company it will partner with to develop lithium mining in the Uyuni salt flat, a spokesperson from state miner Comibol told BNamericas.
"The agreement will be for mining and processing the metal," the spokesperson said.
The government has offers from companies such as France's Bollore, South Korean state company Kores and compatriot firm LG, as well as Japanese companies Mitsubishi and Sumitomo.
Authorities have also received technological support proposals from the governments of Japan, Finland and Italy.
The Uyuni salt flat has a surface area of almost 10,000km2 and could have reserves of up to 8.9Mt lithium, 7.7Mt boron and 211Mt magnesium, in addition to sodium and calcium.
Some 5.4Mt of lithium could be mined from the salt flat, compared to 3Mt in Chile, 1.1Mt in China and 410,000t in the US, according to figures from the US Geological Institute.
Brazil
September 23, 21010 - BRASILIA: Petrobras `reverse privatization' looms as Brazil backs $78 billion offer
PETROLEUMWORLD
Brazil is reclaiming part of the Petroleo Brasileiro SA stake it sold to investors a decade ago in a record $78 billion share sale today.
The government will boost its stake in Petrobras, Latin America's largest company by market value, to as much as 55 percent from 39 percent now, Adriano Pires , head of the Brazilian Center for Infrastructure, a research group based in Rio de Janeiro, said yesterday in a telephone interview.
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc. , on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. The Petrobras transaction signals President Luiz Inacio Lula da Silva is seeking a greater role for the state in the economy ahead of the likely election of chosen successor Dilma Rousseff next month.
“Many are worried Petrobras is really becoming a policy arm of the Brazilian government,” Harold Sharon , who helps manage $100 billion including Petrobras shares at Lord Abbett in Jersey City, said in an interview. “As they sit back and look at this entire development, it looks far too interventionist.”
Petrobras is planning to sell as many as 2.718 billion common shares and 1.983 billion preferred shares. The government is buying about $42.5 billion-worth of stock in return for the right to develop about 5 billion barrels of reserves. State-run financial institutions such as the BNDES development bank will likely buy additional shares for cash, UBS AG said Sept. 21.
The Petrobras sale would amount to more than 20 percent of the value of all equity offerings already completed in 2010 and be more than three times the record $22.1 billion raised by Agricultural Bank of China in July, according to Bloomberg data.
Strengthening Control
Lula is strengthening control over the domestic oil industry after the Tupi discovery in 2007, the largest find in the Western Hemisphere since Mexico's Cantarell in 1976. Lula says Brazil is relying on the country's oil wealth to help raise the nation's 192 million people out of poverty.
“It's a clear process of reverse privatization,” Rogerio Freitas , who manages about $25 million at Teorica Investimentos in Rio de Janeiro, said in a telephone interview. “The Brazilian public sector will increase its participation, and that's not good.”
The government and state agencies will buy 56 percent to 69 percent of the offering, allowing Petrobras to place all the shares, Lilyanna Yang , an analyst at UBS AG in New York, said in a Sept. 21 note to clients.
Telephone messages left at Lula's press office in Brasilia were not returned. A spokeswoman at Petrobras's press office, who declined to be identified under company policy, wouldn't comment on the prospect of increased government control.
Rising Prices
Brazil, the world's largest producer of orange juice and coffee, is taking advantage of rising prices to exert greater control over commodity companies. Lula has asked Vale SA , the world's largest iron ore company, to invest in steelmaking plants in Brazil instead of sending iron ore abroad, while Dilma, a former Petrobras chairman, said Vale should face tougher requirements for tapping Brazil's natural resources, according to a February interview with Epoca magazine.
Dilma “has a very state-orientated discourse,” Roberto Padovani , chief economist at Banco WestLB do Brasil SA in Sao Paulo, said in a Sept. 22 telephone interview.
Brazil's government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The government holdings of Petrobras's voting shares will probably rise to about 65 percent after the share sale, according to the Infrastructure Institute's Pires.
$4.1 Billion Sale
Since the government sold more than a quarter of Petrobras's shares for about $4.1 billion in 2000, the company has invested in boosting the search for oil. State-owned rivals Petroleos Mexicanos and Petroleos de Venezuela SA struggled to stem declines and Pemex posted five straight years of lower output. Petrobras expects to double output by 2020.
Brazil's development bank, known as BNDES, will buy enough shares in the Petrobras offer to maintain its shareholding, Andre Carvalhal , head of the international market department at BNDES, said in a Sept. 15 interview. BNDES is the second-largest shareholder in Petrobras after Brazil's government.
About $379 billion has been raised by companies selling shares this year, the same pace as a year ago, data compiled by Bloomberg show. A total of 167 equity offerings valued at $29.5 billion have been postponed or withdrawn around the world this year, the most since at least 1998, the data show.
State's Interests
The share sale is putting the state's interests above those of minority shareholders, said Ed Kuczma , an emerging markets analyst at Van Eck Associates in New York, which manages $21 billion and sold Petrobras shares this quarter.
“We vote with where we put our funds and decided to get out,” Kuczma said in a telephone interview. “A lot of the investment is going toward downstream facilities like refining, which tend to have lower returns.”
Petrobras plans to spend $73.6 billion on refining and distribution in the five years through 2014. Profit margins there are typically lower than in its exploration and production business. That's about one third of planned spending of about $224 billion. The company will “assist” the government in meeting Brazilian fuel demand, it said in a Sept. 3 prospectus.
“This big offering is coming at a time when there's more concern about the government moving to the left,” said Nick Robinson , who helps manage $25 billion in emerging-market assets at Aberdeen Asset Management Inc. and owns Petrobras shares. “Most of the refineries are in the north and the current government gets most of its support from the north.”
Ended Monopoly
Brazil ended Petrobras's monopoly on exploration and production in 1997 to create competition and encourage the discovery of oil to fuel the domestic economy. The company also sold shares to finance exploration, with the government retaining control of the company's voting shares.
“The Brazilian federal government, as our principal shareholder, may cause us to pursue certain macroeconomic and social objectives,” Petrobras said in a Sept. 3 prospectus. “We may engage in activities that give preference to the objectives of the Brazilian federal government rather than to our own economic and business objectives,” the company said.
Petrobras on Sept. 17 doubled the amount of stock that can be issued in an additional allotment to as much as 20 percent of the main sale. That's on top of an already announced supplementary over-allotment of as much as 5 percent.
The offering has “very strong support from domestic pension funds and the government,” Christopher Palmer , who oversees about $5 billion as head of global emerging markets at Gartmore Investment Management Ltd. in London, said in a Sept. 21 telephone interview. “The government thinks this is a good investment.”
September 23, 21010 - BRASILIA: Hygroelectric Power - Energy From The Air Could Be The Green Wave Of The Future (BRAZIL)
Source: Science 20
Energy from the air? How very Tesla of you! But unlike America's favorite quirky inventor, this isn't transmitted power and no dogs have to die. It's using moisture from the air - and the more humidity you have the better.
Similar to the way solar cells capture sunlight, hygroelectric collectors would collect moisture and use it to light a house or recharge an electric car. Bonus: Panels on the rooftops of buildings could prevent lightning strikes - and the technology is already in the early stages of development.
Scientists once believed that water droplets in the atmosphere were electrically neutral and remained so even after coming into contact with the electrical charges on dust particles and droplets of other liquids. But new evidence suggests that water in the atmosphere picks up an electrical charge.
It may also help explain a 200-year-old scientific riddle about how electricity is produced and discharged in the atmosphere.
Study leader Fernando Galembeck in the Department of Physical Chemistry at University of Campinas (Brazil) confirmed it using laboratory experiments that simulated water's contact with dust particles in the air. They used tiny particles of silica and aluminum phosphate, both common airborne substances, showing that silica became more negatively charged in the presence of high humidity and aluminum phosphate became more positively charged.
Just as solar cells work best in sunny areas of the world, he said hygroelectrical panels would work more efficiently in areas with high humidity, such as the northeastern and southeastern United States and the humid tropics.
"Our research could pave the way for turning electricity from the atmosphere into an alternative energy source for the future," said Galembeck. "Just as solar energy could free some households from paying electric bills, this promising new energy source could have a similar effect."
September 22, 21010 - BRASILIA: Petrobras `Reverse Privatization' Looms as Brazil Control Rises (BRAZIL)
Source: Bloomberg
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc., on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. Photographer: Adriano Machado/Bloomberg Brazil is reclaiming part of the Petroleo Brasileiro SA stake it sold to investors a decade ago in a record $78 billion share sale today.
The government will boost its stake in Petrobras, Latin America’s largest company by market value, to as much as 55 percent from 39 percent now, Adriano Pires, head of the Brazilian Center for Infrastructure, a research group based in Rio de Janeiro, said yesterday in a telephone interview.
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc., on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. The Petrobras transaction signals President Luiz Inacio Lula da Silva is seeking a greater role for the state in the economy ahead of the likely election of chosen successor Dilma Rousseff next month.
“Many are worried Petrobras is really becoming a policy arm of the Brazilian government,” Harold Sharon, who helps manage $100 billion including Petrobras shares at Lord Abbett in Jersey City, said in an interview. “As they sit back and look at this entire development, it looks far too interventionist.”
Petrobras is planning to sell as many as 2.718 billion common shares and 1.983 billion preferred shares. The government is buying about $42.5 billion-worth of stock in return for the right to develop about 5 billion barrels of reserves. State-run financial institutions such as the BNDES development bank will likely buy additional shares for cash, UBS AG said Sept. 21.
The Petrobras sale would amount to more than 20 percent of the value of all equity offerings already completed in 2010 and be more than three times the record $22.1 billion raised by Agricultural Bank of China in July, according to Bloomberg data.
Strengthening Control
Lula is strengthening control over the domestic oil industry after the Tupi discovery in 2007, the largest find in the Western Hemisphere since Mexico’s Cantarell in 1976. Lula says Brazil is relying on the country’s oil wealth to help raise the nation’s 192 million people out of poverty.
“It’s a clear process of reverse privatization,” Rogerio Freitas, who manages about $25 million at Teorica Investimentos in Rio de Janeiro, said in a telephone interview. “The Brazilian public sector will increase its participation, and that’s not good.”
The government and state agencies will buy 56 percent to 69 percent of the offering, allowing Petrobras to place all the shares, Lilyanna Yang, an analyst at UBS AG in New York, said in a Sept. 21 note to clients.
Telephone messages left at Lula’s press office in Brasilia were not returned. A spokeswoman at Petrobras’s press office, who declined to be identified under company policy, wouldn’t comment on the prospect of increased government control.
Rising Prices
Brazil, the world’s largest producer of orange juice and coffee, is taking advantage of rising prices to exert greater control over commodity companies. Lula has asked Vale SA, the world’s largest iron ore company, to invest in steelmaking plants in Brazil instead of sending iron ore abroad, while Dilma, a former Petrobras chairman, said Vale should face tougher requirements for tapping Brazil’s natural resources, according to a February interview with Epoca magazine.
Dilma “has a very state-orientated discourse,” Roberto Padovani, chief economist at Banco WestLB do Brasil SA in Sao Paulo, said in a Sept. 22 telephone interview.
Brazil’s government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The government holdings of Petrobras’s voting shares will probably rise to about 65 percent after the share sale, according to the Infrastructure Institute’s Pires.
$4.1 Billion Sale
Since the government sold more than a quarter of Petrobras’s shares for about $4.1 billion in 2000, the company has invested in boosting the search for oil. State-owned rivals Petroleos Mexicanos and Petroleos de Venezuela SA struggled to stem declines and Pemex posted five straight years of lower output. Petrobras expects to double output by 2020.
Brazil’s development bank, known as BNDES, will buy enough shares in the Petrobras offer to maintain its shareholding, Andre Carvalhal, head of the international market department at BNDES, said in a Sept. 15 interview. BNDES is the second-largest shareholder in Petrobras after Brazil’s government.
About $379 billion has been raised by companies selling shares this year, the same pace as a year ago, data compiled by Bloomberg show. A total of 167 equity offerings valued at $29.5 billion have been postponed or withdrawn around the world this year, the most since at least 1998, the data show.
State’s Interests
The share sale is putting the state’s interests above those of minority shareholders, said Ed Kuczma, an emerging markets analyst at Van Eck Associates in New York, which manages $21 billion and sold Petrobras shares this quarter.
“We vote with where we put our funds and decided to get out,” Kuczma said in a telephone interview. “A lot of the investment is going toward downstream facilities like refining, which tend to have lower returns.”
Petrobras plans to spend $73.6 billion on refining and distribution in the five years through 2014. Profit margins there are typically lower than in its exploration and production business. That’s about one third of planned spending of about $224 billion. The company will “assist” the government in meeting Brazilian fuel demand, it said in a Sept. 3 prospectus.
“This big offering is coming at a time when there’s more concern about the government moving to the left,” said Nick Robinson, who helps manage $25 billion in emerging-market assets at Aberdeen Asset Management Inc. and owns Petrobras shares. “Most of the refineries are in the north and the current government gets most of its support from the north.”
Ended Monopoly
Brazil ended Petrobras’s monopoly on exploration and production in 1997 to create competition and encourage the discovery of oil to fuel the domestic economy. The company also sold shares to finance exploration, with the government retaining control of the company’s voting shares.
“The Brazilian federal government, as our principal shareholder, may cause us to pursue certain macroeconomic and social objectives,” Petrobras said in a Sept. 3 prospectus. “We may engage in activities that give preference to the objectives of the Brazilian federal government rather than to our own economic and business objectives,” the company said.
Petrobras on Sept. 17 doubled the amount of stock that can be issued in an additional allotment to as much as 20 percent of the main sale. That’s on top of an already announced supplementary over-allotment of as much as 5 percent.
The offering has “very strong support from domestic pension funds and the government,” Christopher Palmer, who oversees about $5 billion as head of global emerging markets at Gartmore Investment Management Ltd. in London, said in a Sept. 21 telephone interview. “The government thinks this is a good investment.”
September 22, 2010 - BRASILIA: US behind Brazil, China and India as preferred place to invest, says Bloomberg (BRAZIL)
Source: Mercopress
The United States has fallen behind emerging markets Brazil, China and India as the preferred place to invest, according to a survey from Bloomberg. The US ranked first three months ago in the last quarterly Bloomberg Global Poll.
Decrease fontIncrease fontPrintShareComment A majority of respondents support Bernanke performance and the Fed’s policies
But in the September poll of 1,408 investors, analysts and traders who are Bloomberg subscribers, respondents rate the US fourth for potential returns over the next year, behind Brazil and China, tied for first, and India, in third place.
The US economic situation “is obviously unsustainable, and the concerted attempt to suspend disbelief is playing increasingly poorly abroad” says poll respondent Eric Kraus, chief strategist for Otkritie Brokerage House in Moscow.
“One can delay, but no one can forestall the un-wind of a multi-decade credit bubble.”
Economic reports released since the June poll show US GDP growth slowed to 1.6% in the second quarter from 3.7% in the first quarter. In the final quarter of last year, GDP grew at a 5% annual rate.
Expectations for US GDP growth next year have dropped to a median forecast of 2.5% in September from 2.9% in June, according to Bloomberg’s monthly survey of economists.
Since the June survey, US stock markets have been on the rise. The S&P’s 500 Index has risen 3.62% since the last investor poll was completed June 3. That’s not as much as Brazil’s Bovespa Index, which is up 10.56% and India’s Bombay Stock Exchange Sensitive Index, which is up 10.44%. The U.S. stocks still did better than China’s Shanghai Stock Exchange Composite Index, which has risen 1.41% since June 3.
Two-thirds of investors say they believe Federal Reserve policy makers will ease monetary policy through bond purchases by the end of the year. A similar 65% majority say the Fed bond purchases won’t boost U.S. economic growth.
Overall, investors give the central bank favourable marks, with a 57% majority believing its monetary policy is “about right.” More say it has been too aggressive, the view of 26%, than say it has been too timid, a view held by 14%.
Fed Chairman Ben S Bernanke is viewed favourably by 71% of respondents, up from 67% in June. He ranks highest in a list of eight global leaders and policy makers that includes President Obama, German Chancellor Angela Merkel and European Central Bank President Jean Claude Trichet.
Only 1 out of 6 investors believes the US economy is currently improving, though a 45% plurality considers the US “stable.” Another 37% believe the US is deteriorating.
The poll also shows that confidence in the US dollar has slipped since June, when 63% of investors believed the US currency would rise against the Euro during the following three months. Forecasts are now evenly divided: 34% now expect a stronger dollar in three months; 32% expect little change; and 30% a weaker dollar.
The Bloomberg Global Poll was conducted by Selzer & Co., of Des Moines, Iowa, and has a margin of error of plus or minus 2.6 percentage points.
September 22, 21010 - BRASILIA: Petrobras yields climb as share sale not enough: Brazil credit (BRAZIL)
Source: PETROLEUMWORLD
Petroleo Brasileiro SA's borrowing costs are surging to a two-month high on concern the state-owned oil company will tap the bond market for financing even after it completes a stock sale of up to 134 billion reais ($78 billion).
Petrobras's 7.875 percent bonds due in 2019 yield 4.65 percent, or 100 basis points more than Brazilian government bonds that mature the same year, according to data compiled by Bloomberg. The gap swelled from 57 basis points on Aug. 2.
The company's debt is lagging behind similar-rated bonds sold by OAO Gazprom , the Moscow-based natural gas exporter. Yields on Petrobras's 2019 bonds fell 99 basis points this year, compared with a decline of 136 on Gazprom's similar-maturity notes. Petrobras , which is issuing $42.5 billion of stock to the government in return for the rights to develop 5 billion barrels of oil reserves, will receive about $30 billion in cash from the offering, making a return to the bond market likely, according to Royal Bank of Canada.
“The company is still going to have to turn to the debt market for their huge financing needs,” said Eduardo Suarez , an emerging-markets strategist at RBC in Toronto. “The oil they will develop isn't going to turn into cash for quite some time.”
The yield on Petrobras's $2.75 billion of 7.875 percent notes climbed 31 basis points, or 0.31 percentage point, since Aug. 19 to 4.65 percent yesterday, Bloomberg data shows. The government's 8.875 percent notes yielded 3.65 percent, up 6 basis points during the same period. Petrobras is rated Baa1 by Moody's Investors Service, two levels above the government.
Debt ‘Limits'
Petrobras, which lost 26 percent of its market value this year, posted the second-smallest profit in the second quarter among the world's 10 largest oil producers. It surpassed London- based BP Plc. , whose earnings were hurt by the Gulf of Mexico oil spill.
Chief Executive Officer Jose Sergio Gabrielli said in an April 30 interview in Sao Paulo that the company doesn't plan to sell bonds this year because it's reaching the “upper limits” of debt ratios before putting credit ratings at risk.
Petrobras, based in Rio de Janeiro, will seek to raise $96 billion in debt and equity over the next five years to finance its investment plan, said an official who declined to be identified in accordance with company policy. The $224 billion plan is the biggest in the oil industry.
Tupi
“They will have to go back to the debt market,” said Esther Chan , who helps manage $5 billion of emerging-market assets at Aberdeen Asset Management Plc in London. “Investors aren't very keen.” Petrobras will have to raise $114 billion in debt over the next five years, Chan estimates.
Petrobras is seeking to finance the development of fields such as Tupi, the largest discovery in the Americas in three decades.
The extra yield investors demand to own Brazilian government dollar bonds instead of U.S. Treasuries widened 10 basis point to 211, according to JPMorgan Chase & Co.
The cost of protecting Brazilian bonds against default for five years fell less than one basis point to 118, according to CMA DataVision prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. Five-year swaps on Petrobras debt climbed to 158 basis points from 123 at the start of 2010.
The yield on Brazil's interest-rate futures contract due in January, the most active in Sao Paulo trading, was unchanged at 10.67 percent.
Dollar Purchases
The real gained 1.3 percent to 1.7108 per dollar by 5:35 p.m. in New York. It's up 34 percent against the dollar since the beginning of last year, the second-best performer among the most-traded currencies tracked by Bloomberg.
The government authorized its sovereign wealth fund to start purchasing foreign currencies such as the dollar as part of an effort to slow the real's rally, the Finance Ministry said in a statement yesterday.
Petrobras said Sept. 17 it boosted the value of its share sale to as much as 134 billion reais from about 129 billion reais because of higher demand. The company plans to sell 1.59 billion new preferred shares and 2.17 billion new voting shares in its main offer on Sept. 29.
“There's going to be enough interest for Petrobras's offering, so it will be able to avoid going to the debt market,” said Christopher Garman , the Eurasia Group's director for Latin America in Washington D.C. “They're going to buy themselves some time.”
‘Ideal'
The company's debt as a percentage of equity climbed to 34 percent in the second quarter from 32 percent in the previous quarter and 28 percent a year earlier, Chief Financial Officer Almir Barbassa told reporters on Aug. 13. A ratio of 25 percent to 35 percent is “ideal,” he said.
Standard & Poor's cut Petrobras one level to BBB-, the lowest investment grade, in June 2009 on concern the company's investment plan was too big.
Milena Zaniboni , an analyst at S&P, didn't immediately return calls and messages for comment.
Petrobras's bonds yields are also rising on concern the share sale will lead to more government involvement in the company. The Brazilian government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The sale will probably lead to an increase in the government's stake, the company said in a Sept. 3 prospectus.
“The mechanics of the transaction have a lot of people uncomfortable because it just brings to the surface a likely increase in the political component to the management of Petrobras,” said Duncan Littlejohn, who helps manage $1.6 billion in global private equity funds at Paul Capital in Sao Paulo. “It has taken a different dimension because the company is going to get bigger after this offering.”
September 22, 2010 - BRASILIA: Punters line up for slice of Petrobras (BRAZIL)
Source: UPSTREAMONLINE
Brazilian state oil company Petrobras has received more than enough investor interest to sell all the shares in a massive offer worth up to $79 billion.
The offer is "comfortably oversubscribed" with strong investor demand, said one source, though is probably not two times oversubscribed given the size of the deal, reported Reuters.
A second source said heavy demand for shares was fueled by the strong participation of state pension funds and institutional investors.
The sources asked not to be identified because they are not allowed to speak publicly about the share offer, which prices today after markets close.
The issue, the biggest in capital markets history, includes a $42.5 billion oil-for-shares swap between Petrobras and the government.
The company will use the proceeds to finance the world's largest oil investment program that focuses on Brazil's vast deep water crude deposits that the South American nation hopes will turn it into a major energy exporter.
This month the company filed to sell 1.59 billion new preferred shares and 2.17 billion new common shares - figures that do not include a "greenshoe" option that would expand the offer on extraordinary demand.
At yesterday's closing prices, the sale of those shares could fetch 106 billion reais ($61.5 billion).
The "greenshoe" option could take the offering to as much as $79 billion.
Colombia
September 23, 2010 - BOGOTA: La Cortex to switch Puerto Barco taps back on (COLOMBIA)
Source: UPSTREAMONLINE
South-America focused operator La Cortez said today it has decided to restart production from the Puerto Barco field in Colombia before the end of the first quarter of next year.
“This plan includes conducting workover activities in some of the existing wells,” said La Cortez in a statement.
“In addition, the plan includes upgrading the production facilities as well as the access road and reprocessing of around 138 kilometres of 2D is under way.”
Meanwhile the company said together with partner and operator of the Putumayo 4 Block, Petronorte, it has identified a layout plan for 2D seismic on the Block.
The new seismic, which will cover around 104 kilometres in the north part of the block, is expected to be carried out in the fourth quarter.
In addition, the company also plans to drill the first exploratory well on the block during the first half of next year and is currently seeking regulatory approval.
September 23, 2010 - BOGOTA: Endesa to build 837-million-dollar hydro plant in Colombia (COLOMBIA)
Source: Expatica
Spanish energy group Endesa, owned by Italy's Enel, announced Thursday plans to invest 837 million dollars (627 million euros) in a hydroelectric plant in Colombia.
The plant will have a capacity will generate 2,200 Gigawatts of electricity per year, it said in a statement.
It will be built in the southeastern region of Huila and supplied by the Magdalena river, Colombia's largest.
It will be the first hydroelectric plant built by a private company in Colombia and Endesa's largest in Latin America.
Endesa, in which Enel owns 92 percent, is the largest private company in the energy sector in Latin America.
Septemebr 23, 2010 - BOGOTA: Geothermal projects in Colombia and Ecuador (COLOMBIA)
Source: Pennenergy
22 September 2010 - The governments of Colombia and Ecuador are currently working together on a project to develop geothermal generation in the border region of these South American nations.
According to an official statement issued by the Colombian authorities, the project is known as the Bilateral Agreement Geothermal Project Chiles-Cerro Negro-Tufino, and its first phase is expected to be completed within 18 months.
The collaboration of both countries to generate this type of electricity is being carried out in other parts of the region. For example, in the Ecuadorian province of Carchi, a project is underway that is expected to generate 138 MW.
Septemebr 23, 2010 - BOGOTA: Are Smart Grids the future of power distribution in Latin America? (COLOMBIA)
Source: Power Gen Worldwide
Alex Lima, regional sales director for Latin America for IT giant Microsoft, said in an interview with Business News Americas, that the future of electricity networks in the Latin American region lies in having them linked to intelligent systems. In other words, the Smart Grid.
According to Lima, making the electricity networks intelligent has wide implications in the world of politics, society, technology and the economy. He highlighted the numerous benefits of such networks, including: better energy efficiency, greater capability to monitor electrical systems, improved control over fraudulent activities and a greater opportunity to increase the sale of electricity.
American company Silver Spring Networks, whose main activities derive from the implementation of smart grid solutions, has said recently it intends to open its first Latin American office in Sao Paulo, Brazil.
The company will find itself competing to control the market against its rival ConectiSys, the US firm that has supplied its intelligent network technology to Gas Natural Fenosa of Spain. The Spanish company uses this technology in the distribution of electricity in Central America, and in particular Nicaragua.
According to an article in Vanguardia, a Colombian newspaper, the race for the installation of intelligent systems to control the electricity grids in the American continent started in San Mateo, California, USA, where the GreenBeat conference was held late last year.
The conference’s objective was to present ideas and projects that would help improve and modernize the North American electricity network system.
Former US vice president Al Gore, who is known around the world for his work as defender of clean energy and for his struggle against climate change, was present.
The Nobel Peace Prize winner of 2007 said that the installation of intelligent control to direct electricity networks would mean an entire revolution in the sector. He went on to compare this development to the use of the internet for the first time in the 1990s.
The Vanguardia article went on to say that Colombia has been one of the first countries in Latin America to follow the steps of the US when it comes to the implementation of Smart Grids.
By the end of 2009, Colombia was the host of the International Fair of the Electric Sector, where the main discussion gravitated around the installation of such networks as the future key for the distribution of energy.
The increase in the Latin American population over the next decades is also a factor to consider when addressing this topic. Such an increase will bring with it considerable growth in the demand for electricity. In order to cope with it, experts have said, it will be necessary to implement the Smart Grid concept.
Search giant Google has also been experimenting with intelligent systems that allow the company to register, analyze and show the figures of the electric activity in buildings or in private homes.
In that way, private consumers can know instantly how much electricity they have consumed and are able to receive reports about their general use. This allows them to manage their electricity consumption more effectively.
The Vanguardia article also notes that despite the growth in renewable energy sources in Latin America they will not be sufficient to satisfy demand alone, and a lot more needs to be done to be able to store their intermittent power and distribute it in an efficient way. This is where intelligent networks or Smart Grids play a key role.
In some South American countries, such as Venezuela, power cuts are frequent. This problem could also be solved y through the use of intelligent grids.
The introduction of new natural resources that can produce electricity is important but they do not guarantee the correct distribution of the electricity. This is why the installation of the smart Grid will become crucial in the years to come in
September 22, 2010 - BOGOTA: Ecopetrol Soars 70% in 2010 (COLOMBIA)
Source: The Street
A seldom mentioned emerging-market country is nurturing a future oil giant. Colombia is a growing and dynamic economy. Some people think of Colombia as a violent and lawless place dominated by drug cartels, or perhaps even confuse it with socialist Venezuela. But, the truth is that Colombia has come a long way.
After nearly 30 years of drug-related violence, a new pro-business government and a U.S.-supported crackdown have vastly improved conditions in the past decade. Since 2002, terrorist acts are down 84%, kidnappings have dropped 88% and the homicide rate is the lowest in 22 years. Colombia's crime rate is now lower than that of many U.S. cities. As a result, Colombia is attracting more investors and domestic spending is on the rise. Its gross domestic product grew 5% in the first half of 2010 (compared with 1.6% in the second quarter in the U.S.), and the stock market has reacted.
The Colombian exchange traded fund Global X/InterBolsa FTSE Colombia 20 ETF(GXG_) has soared 48% so far this year and was the top-performing country-specific ETF for the year as of July 30. Colombia is rich in natural resources, including one of the largest deposits of oil and gas in Latin America. There are just two Colombian companies trading on the New York Stock Exchange, but luckily, one of them has been on fire. Ecopetrol is Colombia's largest integrated oil company, and is also the fourth-biggest oil major in Latin America. The company focuses on exploration and production, but is also involved in refining and transportation. About 90% of the firm is owned by the state. Ecopetrol explores for oil and gas across Colombia and is expanding internationally through exploration partnerships in Brazil, Peru, and the United States (Gulf of Mexico).
As of the end of the first quarter, Ecopetrol had reserves of 1.9 billion barrels of oil equivalent (BOE), 71% of which is oil and 29% gas. The company's production for the quarter was 83% oil and 17% gas. The company, like the country, is looking to the future. Ecopetrol has hyper-aggressive plans to expand and become a major international oil giant. It plans to invest a whopping $80 billion on expansion in the next 10 years and forecasts dramatic production and reserve gains in a relatively short period. The company is targeting daily production growth of 27% in 2011 (from spring 2010 levels) and reserve growth of 68% by 2015 and more than 200% by 2020.
September 22, 2010 - BOGOTA: Colombia oil production continues upward swing (COLOMBIA)
Source: Colombia Report
Oil production and exploration continues to expand in Colombia, with companies planning to open 110 new exploratory wells this year.
According to Portafolio, several companies are requesting permits to explore new territory such as Llanos Orientales (Eastern Plains), the Magdalena Valley, and areas near the Caribbean coast.
For the past two months, these companies have been going through proceedings with the Environment Ministry to secure the permits necessary to expand exploration in new parts of the country.
Ecopetrol, Cepcolsa, Emerald, Ramshorn, Petrolifera, Pacific Stratus, Thorneloe, Columbus Energy, and Nexen are seeking permits. In 2009, the government's oil-licensing agency, the ANH, reached 58 agreements. For 2010, the current figure is at seven agreements, but will most likely surpass 2009 contracts, when the agreements from the Open Round Colombia 2010 are finalized.
Colombian oil production is expected to continue to consistently rise. Analysts credit the increase in investment and production to the country's decline in violence and to regulatory reforms.
Colombia has the fifth-largest crude oil reserves in South America, and currently exports around half of its production, with a significant portion of this going to the United States
Cuba
September 22, 21010 - HAVANA: Cuba props foreign investment projects and fires basic industry minister (CUBA)
Source: Mercopress
President Raul Castro sacked his energy and resources minister, the last remaining minister from his brother Fidel cabinet. Minister for basic industry, Yadira Garcia, was fired late Sunday for “shortcomings,” specifically exerting “weak control over resources set aside for investment and production,” an official declaration read on state television said.
Yadira García was removed because of “shortcomings”, but was also the last of cabinet ministers named by Fidel Castro
The basic industry ministry is responsible for electricity, oil, nickel, rubber and medicine production. Garcia, a member of the political bureau of Cuba's ruling Communist Party, was named to the portfolio in 2004 after her predecessor was sacked following a domestic energy crisis.
Garcia's deputy, Tomas Benitez, will head the ministry until a successor is named.
Since taking over the presidency from his ailing brother in 2008, Raul Castro has embarked on a number of changes that have rolled back Fidel Castro's communist revolution.
He has replaced or reshuffled more than a dozen members of government, notably ejecting vice president Carlos Lage and foreign minister Felipe Perez Roque, both accused of harbouring unacceptable ambitions to take power.
Other Fidel-era appointees who lost posts or decision-making power include those in charge of the ministries for the economy, agriculture, sugar, communications, transport, trade, commerce, finance, construction, food industry, light industry, steelmaking industry, science and technology, and the head of the central bank.
The Ministry for Basic Industry concentrates most foreign capital investments with exploitations projects for oil with corporations from at least ten different countries including Brazil, Venezuela, Canada, China and Russia.
Ms García was considered a vital link in relations with Venezuela, Cuba’s main economic, political and trade associate. With Venezuela she managed the main refinery in Cuba and the construction of a petrochemical pole, among other multi-million projects involving the two countries.
The Cuban oil industry is preparing to drill with foreign partners in the Gulf of Mexico next year and in partnership with Venezuela is developing its refining and other oil related infrastructure.
Unrefined nickel is Cuba's most important export at around 70,000 tons per year and a joint venture with Venezuela plans to add 60,000 tons of ferronickel by 2013.
Chile
September 21, 2010 - SANTIAGO: MPX to continue with Castilla thermo -
Business News Americas
Brazilian generator MPX Energia will continue with the legal and environmental process for the 2.4GW coal-fired Castilla thermo plant in northern Chile despite a ruling against the project by the Copiapo appeals court last week, a company spokesperson told BNamericas.
"MPX maintains the conviction that the Castilla plant complies with all the environmental requirements of Chilean law and also those stipulated by international financing organizations for projects of this type," the company said.
MPX also denied rumors that it was looking for a partner in the project.
"MPX is not looking for partners," the spokesperson said. "Chile is very strategic. What happens is that a project of this magnitude will always mean people approach the company with proposals. That is all."
The planned US$4.4bn project, to be constructed 80km south of Copiapo, has suffered numerous setbacks during the permitting process.
MPX first submitted the EIS in December 2008 and was given an extension in March 2009 to respond to questions from various agencies involved in the environmental approval process.
In February of this year, the EIS was once again delayed when sanitation authorities gave an unfavorable review of the project, according to MPX.
Plans for the plant call for the construction of two 127MW diesel-fired turbines and six 350MW pulverized coal-fired units. The project also calls for the construction of a multi-use port, which would ship in the coal required to fire the plant.
The rejection of the 540MW Barrancones coal plant last month by President Sebastian Piñera has put the spotlight on thermo projects in Chile. Castilla is the largest of the numerous coal-fired plants in the pipeline for Chile's northern regions.
September 22, 2010 - SANTIAGO: Chilean Coal Plant Includes Solar Power (CHILE)
Source: OfficialWire
A concentrated solar power facility in Chile will help reduce emissions at a coal-fired power plant, German and French energy companies announced.
GDF Suez announced it had teamed with German renewable energy company Solar Power Group to develop a 5-megawatt thermal solar concentrated solar power plant. The facility will provide stream to the 150 MW Mejillones coal plant in northern Chile.
The solar facility will heat water for steam production, giving the coal plant the ability to "store" thermal energy by using steam to drive turbines for electricity after sunset.
The so-called solar boiler will connect directly to the coal-fired power plant, reducing coal consumption and decreasing the amount of harmful greenhouse gas emissions.
"The inclusion of our solar boilers in the Mejillones plant is an important milestone on a path toward affordable clean energy production," said Jacques de Lalaing, founding and managing director of Solar Power Group, in a statement.
GDF Suez points to estimates from the International Energy Agency that suggest more than 10 percent of global electricity production will come from concentrated solar power by 2050.
September 22, 2010 - SANTIAGO: Marginal Costs On Chile's Largest Power Grid Seen Falling In 4Q -Analysts (CHILE)
Source: The Wall Street Journal
-Melting snow and ice is expected to push marginal costs on Chile's largest power grid down as much as 20% on the year, to average around $100 per megawatt hour in the fourth quarter, analysts said Wednesday.
While an unusually dry rainy season pushed marginal costs higher, and electricity bills along with it during the year, melting ice and snow could increase hydroelectric generation and pull those prices back down, said energy analyst Tomas Gonzalez of investment bank Celfin Capital.
The SIC grid, which supplies energy to more than 90% of the nation's population, has 47% of its installed capacity in hydroelectric power generation.
During the first half of the year, marginal costs on the SIC averaged $140 per megawatt hour, while for the year, those costs are expected to average around $135 per megawatt hour.
Meanwhile, costs and bills are seen likely to rise in February, March and April as much as 7% per month as snow melt runs dry and the country awaits a new rainy season.
"When the snow and ice melts thin out, we'll see higher dependence on diesel and liquefied natural gas, which will have the effect of increasing marginal costs and consequently the electric bill you and I pay," said energy analyst Marcelo Catalan with investment bank BCI.
The largest generators on the SIC grid are Empresa Nacional de Electricidad SA (EOC, ENDESA.SN), Colbun SA (COLBUN.SN) and AES Gener SA (GENER.SN, AESZF). Endesa is owned by Chilean energy holding company Enersis SA (ENI, ENERSIS.SN), while AES Gener is owned by U.S. energy company AES Corp. (AES).
Ecuador
September 22, 2010 - QUITO: Ecuador's Environment (ECUADOR)
Source: The Economist
IN 2007, Ecuador’s president, Rafael Correa, proposed a rather unorthodox approach to exploiting his country’s oil resources. Rather than pumping the estimated 900m barrels in the Ishpingo-Tiputini-Tambococha field buried below the Yasuní rainforest park—which represent around a fifth of the country’s total reserves—he suggested that the world pay his country $3.6 billion to leave them underground, thus preventing 436m tonnes of carbon dioxide from entering the atmosphere.
The scheme’s prospects were always dubious. The oil’s net present value is over four times greater than the market price of the European carbon credits Mr Correa hoped to obtain. Moreover, the programme’s eligibility for the credits was questionable, since taking Ecuadorean oil off the market might well lead companies to extract even dirtier sources of petroleum elsewhere. And Ecuador’s spotty record of honouring its international commitments gave would-be participants little comfort that it would abide by the deal’s terms—Mr Correa defaulted on $3.2 billion of bonds in 2008.
Nonetheless, Ecuador forged ahead. In 2008, it received a €300,000 ($425,000) grant from Germany for feasibility studies. And six weeks ago, it signed a memorandum of understanding with the United Nations Development Programme, which stipulated that the organisation would administer a trust fund that would use payments into the scheme for Ecuadorean renewable-energy projects. Chile donated a polite $100,000 last week.
Now, however, the wheels are starting to come off. Ecuador had been counting on a $700m contribution from Germany over the next decade. Dirk Niebel, the German government’s cooperation minister, recently wrote that the plan lacks “a comprehensive rationale, a clear structure of goals and concrete statements on which guarantees will be given,” suggesting that few German funds will be forthcoming. To assuage such concerns, Ecuador’s patrimony minister, María Fernanda Espinosa, will travel to Germany next week. But she will have a tough time accounting for the decision by Ecuador’s Congress last week to cancel the country’s investment-protection treaty with Germany.
The plan is also attracting increased scrutiny at home. Local activists have long questioned Mr Correa’s commitment to protecting the environment. They point out that the scheme would protect just 15% of the Yasuní park, and that the government continues to subsidise domestic fuel consumption.
Perhaps the best indicator of the programme’s prospects is that the president himself is hedging his bets. Even as he seeks contributions to the fund, he has continued preparations for a “Plan B” in which the state oil company would drill the field.
September 23, 2010 - QUITO: Ecuador's Rio Napo To Raise Output By 16% Next Year: Official (ECUADOR)
Source: The Wall Street Journal
The Ecuadorean-Venezulean owned Rio Napo will increase production at its Sacha oil field by 16% next year to 60,000 barrels per day, a high-level company official told Dow Jones Newswires.
"We plan to drill 30 wells during next year and reach an output of about 60,000 barrels per day," said Rio Napo's General Manager, Hugo Coronel, in an interview late Wednesday.
Rio Napo is 70% owned by Ecuador's state oil company, Petroecuador, while Venezuelan state oil company, Petroleos de Venezuela S.A., or PdVSA, holds 30%. The Sacha oil field, in Ecuador's Amazon region, has estimated reserves of 491 million barrels of crude oil.
Currently Sacha produces about 51,600 barrels of oil per day. By the end of the year, said Coronel, Sacha should produce an average of 53,000 barrels per day, and by 2014 or 2015 the company plans to reach an oil output of around 70,000 barrels per day.
Rio Napo began to operate the Sacha field last November with an average oil output of about 49,000 barrels per day, Coronel said. It will invest $621 million in exploration and production activities at Sacha over the next 10 years. About 60% of this investment will be used in the first five years.
Coronel said Rio Napo has already invested $118 million, and next year the company plans to invest about $150 million.
The Rio Napo joint venture is part of a strategy to integrate the Ecuadorean and Venezulean state oil companies. The venture began in February 2007 with an agreement to swap Ecuadorian oil for Venezuelan diesel and naphtha.
September 22, 2010 - QUITO: Back for More in Ecuador (ECUADOR)
Source: The American Law Daily
Ecuadorian judge Leonardo Ordonez, who currently presides over the case where indigenous plaintiffs seek to hold Chevron Corporation liable for pollution of the Amazon river basin, closed the evidentiary phase of the trial, as plaintiffs released a new damages recommendation of $90 to $113 billion. Chevron has sought to discredit the damages figure previously embraced by plaintiffs--up to $27 billion--by attacking the credibility of the court-appointed expert who recommended the figure (click here and here for previous reports on the matter). Far from rolling over, plaintiffs have doubled down, and doubled down again.
The close of evidence in Ecuador came a day after a San Francisco federal magistrate granted a motion by Ecuador for discovery under 28 U.S.C. section 1782 in aid of a foreign tribunal, and ordered the deposition of the man who produced the videotape that Chevron has cited as evidence of judicial prejudice and corruption. It was a turning of the tables for Chevron, which has won 1782 motions from coast to coast.
On the two biggest-ticket items, plaintiffs' damages numbers greatly exceed the earlier recommendations of controversial court-appointed expert Richard Cabrera. To calculate the cost of cancer deaths, the new upper-range figure of about $70 billion is based on a projection of both past and future deaths allegedly attributable to oil pollution in a large region surrounding the oil concession. (Cabrera had counted only past deaths.) To calculate unjust enrichment, the plaintiffs reached a new upper-range figure of about $38 billion by multiplying the amount that the oil company allegedly saved through cutting corners by a factor of four. Plaintiffs reason that this is necessary to deter similar conduct because they estimate the oil company ran only a 25 percent chance of being penalized. With a maximum claim of $113 billion, the suit against Chevron, first filed in U.S. court in 1993, arguably takes the title of world's biggest dispute from the arbitration filed against Russia by the former shareholders of Yukos Oil Company. The San Francisco ruling, ordering the deposition of the videotaper Diego Borja, was based on evidence that, in the court's words, might suggest "that Mr. Borja was not an innocent third party who just happened to learn of the alleged bribery scheme but rather was a long-time associate of Chevron whom Chevron would pay for any favorable testimony." Ecuador points to an audiotape, recorded by an old friend of Borja's, in which Borja repeatedly boasted that Chevron promised him a future reward for sharing his judicial videotapes. In one passage, Borja bragged to his friend: "[Before I give them the things they said, 'Look, we can't give you money because you can't go and buy evidence as if they sold it in the supermarket. . . . So they said, instead of giving you money, we can give you other things. . . . What we can do is. . . . You're our business partner, you get it? Now, that little word means a lot of things, right? . . . I mean it's a brass ring this big, brother."
Ecuador's lawyers at Winston & Strawn argue that deposing Borja will help them to defend the treaty arbitration filed by Chevron against Ecuador in the Permanent Court of Arbitration, where Chevron seeks a declaration that the company is not liable for damages in Ecuador, and an order that Ecuador indemnify Chevron.
Chevron denies the allegation that it promised to reward Borja for sharing his videos. Spokesperson Kent Robertson adds: "They've offered no evidence of any kind that casts any doubt on the authenticity of the videos or explains the judge's improper participation in the meetings. [T]heir 'investigation' [only] confirms that Chevron had no involvement whatsoever in planning or recording the meetings."
As for the plaintiffs' damages recommendation, Chevron rejects it wholesale. In Chevron's view, Judge Ordonez acted without authority in closing the evidence phase of the trial, because Chevron has asked him to recuse himself for declining to examine its new allegations arising out of U.S. discovery, including purported evidence that plaintiffs ghostwrote Cabrera's report. (The plaintiffs maintain that they violated no Ecuadorian law and that Chevron also engaged in ex parte contacts.) Ecuadorian law bars judges from ruling while recusal motions are pending. Ideally, Chevron would like the close of evidence to be delayed until it can complete its U.S. discovery.
Chevron's lawyers at Gibson, Dunn & Crutcher; Jones Day; and King & Spalding have long characterized the Ecuadorian court as politicized and biased, which plaintiffs deny. In the event that plaintiffs obtain a judgment against Chevron and seek to collect it, the company will continue to press its evidence of fraud in the treaty arbitration, and in enforcement proceedings. A judge need only have "substantial doubt about the integrity of the court" to refuse enforcement under the U.S. Uniform Foreign-Country Money Judgments Recognition Act. (The actual standard will depend on where plaintiffs try to collect.)
But as last week's developments make plain, plaintiffs are not content to play defense, and after 17 years, they are not giving up. The Ecuadorian court estimated in June that it would be ready to rule some time between February and April 2011. Get ready for year 18 of the world's biggest dispute.
September 22, 2010 - QUITO: Ecuador looks to its own people in the battle against climate change (ECUADOR)
Source: The Guardian
Ecuador's Yasuni park where, as part of the climate change battle, oil will be left in the ground if donors pay half its value.
We left thirsty Peru and have reached Quito in Ecuador on the great Oxfam/Guardian Andean climate journey. First stop is to meet the government and community leaders of a state that stretches from the Pacific coast, over the mountains, and deep into the Amazon forest.
The environment minister is the redoubtable Maria Fernanda Espinoza, who is grappling with the contradictions of having a revolutionary new constitution that guarantees the rights of nature and all living entities, yet depends on vast oil reserves. She is adamant that Ecuador wants to find ways to get out of the petrol economy and invest in renewables to avoid climate change.
One plan is to guarantee to leave nearly one billion barrels of oil – nearly 20% of the country's reserves – in the ground if rich countries and individuals give them $3.6bn, half the oil's value. The money from the Yasuni project would go to a UN-run fund to pay for national park conservation, as well as health and education. It would save nearly 400m tonnes of emissions and is being hailed as an innovative climate change solution.
Hmmm. No one knows if this will catch on – even as we meet the minister, the press is reporting that the plan's biggest western backer, Germany, is having second thoughts – but the radical government led by Rafael Correa will push it at the global climate change talks in Mexico in November.
(Less remarkable, but something I have never seen before in 20 years of interviewing politicians, is the way Espinoza gets a senior civil servant to hold, brush and lovingly arrange her long brown hair throughout the hour-long interview. It's a cross between a hairdresing salon and a Vanity Fair photo-shoot.)
The leaders of the country's powerful, 12 million-strong indigenous peoples are also image conscious. Delfin Tenesaca, who runs the largest group, Ecuarunari, gives us an audience in front of a giant scarlet banner proclaiming human, water and other rights. The group sees climate change as an urgent social issue that can only be addressed by communities organising themselves.
Even though Ecuador is right on the equator and is somewhat protected from climate change by the vast Amazon rainforest, its glaciers are melting fast and rainfall is decreasing steadily.
For the indigenous peoples, the "Pachamama" - or Mother Earth - is ill. We are going through a period of "vaciacad", or melancholy, and we need to embrace "Sumak Kawsay", the good way of living to restire Mother Earth's balance, says Tenesaca.
Interpreted, that means the world must abandon the neo-liberal policies that favour the rich. It must redistribute land, make the right to water universal and protect biodiversity. Any other way guarantees climate change, poverty and inequality.
But the indigenous peoples' relationship with government is complex. The new constitution gives them far more than what they had before, but they bitterly complain that the state has not passed the laws needed to make the constitution workable.
Indigenous peoples throughout Latin America are gaining confidence. They are at the forefront of the new political philosophies emerging from Bolivia to Venezuela. Climate change – specifically the right to water – is central to the political revolution taking place.
One of the architects of the Ecuadorean constitition is Humerto Cholango, the man tipped to lead all Andean indigenous peoples.
This intellectual onion grower, a friend of Bolivia's radical president Evo Morales, shares four hectares with his eight brothers on the slopes of the ice-capped volcano Coyambe. He has led a remarkable struggle to protect and provide water for thousands of small farmers.
They have, by consensus and without the help of the central or local state, redistributed land and water, conserved the high pastures of the mountain (which acts as a giant sponge), increased water supply by 10%, and repaired thousands of miles of water channel. It is a model of "Sumak Kawsay". If this had been a World Bank project, it would have cost billions and probably would not have succeeded.
What is impressive is that the indigenous peoples of Ecuador are proactive in adapting society to climate change. Government now gets its ideas from them.
Mexico
September 22, 2010 - MEXICO CITY: Access to some Mexico oil wells blocked by floods (MEXICO)
Source: News Agency
Mexico's state-run oil company Pemex said on Wednesday that flooding in the wake of Hurricane Karl last weekend has blocked access to some of its installations but production was not affected.
The hurricane raked along Mexico's Gulf coast hitting oil producing regions inland in the southern state of Tabasco.
The entrance to several Tabasco oil fields were blocked and four oil wells had been flooded, Pemex [PEMX.UL] said in a statement.
"Despite some problems at the installations, no wells have had to stop production," the statement said.
On Tuesday, the company reestablished operations at 14 offshore oil wells evacuated because of the hurricane.
A majority of Mexico's 2.55 million-barrel-per-day oil production comes from offshore wells.
September 21, 2010 - MEXICO CITY: Carbon deal for Eoliatec wind farms to boost IRR - Santander -(MEXICO)
Source: Business News Americas
The deal to sell 4.57Mt of carbon credits (CERs) from Spanish firm Eolia Renovables de Inversiones' two Mexican wind projects will provide a "substantial boost" to IRR and marks a new possible model for financing renewable projects in Mexico, Justin Bryon, director of Asset & Capital Structuring for Santander Mexico, told BNamericas.
Santander acted as mandated lead arranger in the sale of the carbon credits to German development bank KfW and Nordic finance institution Nefco for delivery between 2012 and 2020.
"This means Santander can not only do project finance, but can also do this carbon monetization. The impact on the promoter is that we push up the yield because the asset itself is denominated in euros. So we finance in euros and the cost of funding in euros is less than half the cost of funding in pesos," Bryon said.
"That's what gives the boost to the return on investment to the shareholder, and can often make the difference between doing a wind farm in Mexico or not," Bryon said.
Local Eolia subsidiaries Eoliatec del Pacifico and Eoliatec del Istmo are developing the two projects in Mexico's Tehuantepec Isthmus.
They will have a combined 324MW capacity when completed in August 2012, Santander said in a statement.
The first wind turbines are expected to start operations in August 2011.
On September 15, Eolia used the proceeds from the sale of the CERs to pay state power company CFE for transmission rights, Bryon said.
Private generators reserved 1.49GW of capacity with CFE under the open season model and committed to pay some 80% of the US$209mn cost, BNamericas reported previously.
The sale of the CERs to KfW and Nefco was funded by KfW itself, Mexican export development bank Bancomext and the European Investment Bank.
The size of the deal is at the very least notable, but Bryon said more significant is the fact that the CERs correspond to the period after expiration of the Kyoto Protocol, for which there is not yet a replacement agreement.
"It's a huge deal. The average deal size is a couple hundred thousand tonnes. This is 10 times that. [...] I have seen deals from China where the amount of tonnes is greater, but not post-Kyoto, because China is not in that market yet," he said.
The purchase of post-Kyoto carbon credits by Germany's KfW and Nefco - which was established by Denmark, Finland, Iceland, Norway and Sweden - is thus a positive signal in the run-up to the United Nations Climate Change Conference (COP-16) to be held in Cancun later this year.
"The fact that governments are buying substantial tonnage like this is revealing for me. It shows they have faith in the carbon market and gives me great reassurance as they have votes in Cancun," Bryon said.
September 22, 2010 - MEXICO CITY: BP and Shell show interest in new oil contracts (MEXICO)
Source: UPSTREAMONLINE
Anglo-Dutch Shell and BP are interested in new oil contracts in Mexico, local reports said, citing the UK’s ambassador to the Latin America country.
News wires 21 September 2010 20:52 GMT
The two companies want to take part in performance-based contracts being offered by state-owned oil producer Pemex, Mexico City-based newspaper Reforma reported today, citing ambassador Judith McGregor.
Pemex is looking to hire foreign oil companies to explore in the Gulf of Mexico as it seeks to arrest a five-year output decline, Bloomberg reported.
Peru
Septemebr 22, 2010 - LIMA: Camisea Accepts Deal (PERU)
Source: Poder 360
Camisea Accepts Deal Camisea consortium agrees to devote Lot 88 gas reserves to the domestic market
The state firm Perupetro reported that the Camisea consortium agreed to devote Lot 88 gas reserves to the internal market. The business conglomerate will only use Lot 56 reserves for gas exports as part of the deal. The renegotiation of the Camisea contract was accomplished after inhabitants of the La Convencion province in Cusco were massively opposed to the exportation of the fuel
Septemebr 22, 2010 - LIMA: Peru Nat Gas Export Limit Talks Not Finished - Consortium (PERU)
Source: The Wall Street Journal
Talks with the Peruvian government over limiting natural gas exports from one production block are at a "preliminary" stage, said a statement from the Camisea gas production consortium.
The Wednesday statement follows reports the consortium had agreed to limit natural gas exports from Lot 88 of Peru's main Camisea fields, making more gas available to the domestic market.
This year, following widespread protests over Peru's gas exports which started in June, the government passed laws aimed at keeping more gas from Lot 88 for domestic use and raising natural gas royalty payments.
On Tuesday Daniel Saba, president of the state agency Perupetro which is responsible for renegotiating both export limits and royalty payments, told state newspaper El Peruano an agreement had been reached over Lot 88. Saba said the formal contract modifications would be made during the rest of the year.
Media reports Wednesday, however, also saw Saba rowing back, saying negotiations over Lot 88 had not yet concluded.
Wednesday's statement from the consortium said current gas exports--via another consortium called Peru LNG--derive only from Lot 56 and said there was a no-export agreement over Lot 88 until 2014.
The consortium also said it was spending over $4 billion to develop Lots 88 and 56 of the Camisea gas fields.
The Camisea consortium is led by Pluspetrol Peru Corp. SA. The U.S.'s Hunt Oil Co. and Spain's Repsol YPF SA (REP, REP.MC) are members of both the Camisea and Peru LNG consortiums.
Uruguay
September 22, 2010 - MONTEVIDEO: ANP to invest US$200mn over next five years - (URUGUAY)
Source: News Americas
Uruguay's national port authority ANP plans to invest US$200mn during the 2011-15 period, an official from the economy and finance ministry told BNamericas.
The authority's proposed investment plan has been submitted to congress and is expected to be approved by legislators by December 31.
The plan includes construction of Montevideo port's Muelle C dock, as well as dredging projects and ongoing work on a new fishing terminal in Montevideo's Capurro area.
ANP will also continue to promote the construction of a deepwater port in Rocha department's La Paloma district, which is expected to be built under a concession contract.
The authority expects a number of other projects to be carried out through public-private partnerships, the official said.
Venezuela
September 21, 2010 - CARACAS: Venezuela invests in large hydro to meet power demand (VENEZUELA)
Source: Power Gen Worldwide
The Venezuelan government's Ministry of Planning and Finances has approved the construction of four hydroelectric projects, representing a total cost of $5.5m.
The projects will be financed by a fund in which the Chinese government has contributed.
One of the projects is the El Chorrin hydroelectric power plant, which is due to be built in the Venezuelan Guayana, one of the world’s last untouched natural habitats. The hydropower station will generate 1000 MW of power, according a report in El Nacional.
Up to now, the Venezuelan government has been reticent in the construction of new hydro projects because of their perceived impact on the environment.
However, the necessity to satisfy the population’s electricity demand now makes such a move a necessity.
For more Hydroelectric news.
September 21, 2010 - CARACAS: Venezuela guards power grid to buffer elections (VENEZUELA)
Source: Arab News
The government said Monday it is taking steps designed to prevent blackouts that have been hitting several regions across Venezuela, so there won't be interruptions during congressional elections this weekend.
Energy Minister Ali Rodriguez said the plan "involves the presence of workers and military personnel" at all major power plants.
"The objective is not only avoiding acts of sabotage, but also preventing any failure that could occur within the electricity system," he said.
In addition, polling stations will be equipped with diesel power generators in case of emergencies, Rodriguez said.
Several regions, including Venezuela's capital, have been hit by power outages in recent weeks.
Government officials blame the blackouts on sabotage, accusing President Hugo Chavez's opponents of trying to damage the power grid as a way to hurt the popularity of the socialist leader and his allies ahead of the vote Sunday.
Opposition leaders reject the allegations, saying the power failures are due to problems in the system.
Aixa Lopez, director of the Committee for People Affected by Power Outages, an opposition-allied group that tracks blackouts and proposes solutions, said the problem is government inefficiency and lack of investment.
"The real cause of the blackouts is that the government has not made the necessary investment and maintenance," Lopez said.
Throughout the first half of 2010, Venezuela experienced recurring power outages across the country as a lack of rainfall caused water shortages and starved the hydroelectric dams that produce about three-fourths of the South American country's electricity.
Chavez has said the water level at the Guri dam, the country's largest, returned to normal levels after the rainy season began in June.
"At the beginning, government authorities told us that the problem was caused by lack of rain, but Guri is full now and the only excuse they can come up with is purported sabotage," Lopez said during a telephone interview.
Blackouts have been occurring in the capital as well as six of Venezuela's 23 states, including Nueva Esparta, Falcon, Anzoategui, Merida and Tachira, Lopez said.
Lopez said she doubted the government is capable of guaranteeing an uninterrupted electricity supply across the entire country during the elections, and she warned that any power outages Sept. 26 could lead to protests and violent conflict between political rivals.
Repeating previous accusations by Chavez's government, the energy minister told the state-run AVN news agency that recent blackouts were "the result of sabotage." Rodriguez added that employees of state power companies could be involved.
September 22, 2010 - CARACAS: Authorities to strengthen security measures to protect Venezuela's power grid (VENEZUELA)
Source: El Universal
About 300 power generation plants for polling centers in Venezuela
A total of 266 power generation plants for parliament election have been installed
Election 2010 Members of the Venezuelan Electricity Joint Chiefs of Staff agreed, in a regular meeting, to strengthen security measures in Venezuelan thermal and hydroelectric power plants as well as distribution and transmission networks throughout the country, four days ahead of the parliament election.
Joaquín Osorio, the National Commissioner for Distribution and Marketing in the electricity sector, said that in addition to the security staff of the National Electric Corporation (Corpoelec) and the National Bolivarian Armed Forces troops, members of the Socialist Workers Front "Braulio Criollo" will participate in surveillance and monitoring of the power generation system.
Osorio added that about 300 thermal power plants have been installed in the polling centers and in the regional headquarters of the National Electoral Council (CNE). So far, 75 percent of power generation plants have been installed to ensure the performance of September 26 parliament poll.
Meanwhile, Keperin Bilbao, the Vice President of Distribution and Marketing, state-run power utility Cadafe, reported through a press release that 200 workers will provide technical and operational support for the power plants purchased by the CNE
September 22, 2010 - CARACAS: Venezuela's new wave of social projects (VENEZUELA)
Source: News Agency
- Venezuelan President Hugo Chavez has launched new social programs ahead of Sunday's legislative elections, in which his Socialist Party will try to keep its clear majority in the 165-seat National Assembly. The 56-year-old leader has reinforced his state-sponsored health and nutrition programs with new ones meant to distribute low-cost cars and sell household electronic goods like washing machines and televisions at a discount.
One program even helps low-income people see the country's natural wonders through subsidized tourism.
Sunday's vote is seen as a precursor to a 2012 presidential election, when Chavez is expected to seek another term to extend his "Bolivarian revolution" in the OPEC member country.
Much is at stake for the former paratrooper, who first won power in 1998 but has seen his popularity fall due to an increase in crime, a nagging recession and, at about 30 percent, the highest inflation rate in the Americas.
Here are some details of Chavez's new social programs:
* The "Good Life" credit card, which allows consumers to buy food and other items including electronic household goods in state-run stores offering favorable financing conditions.
* The state-subsidized "Popular Tourism" plan that lets poor Venezuelans visit sites such as the breathtaking Angel Falls waterfall, the Los Roques islands, until now a playground for the yachting set, and other tourist destinations that would otherwise be out of reach financially.
* A program for distributing cars that run on natural gas and carry a guarantee of free maintenance. State oil company PDVSA loses hundreds of millions of dollars per year selling gasoline on the domestic market at the lowest prices in the world.
* Supermarkets and megastores, once operated by private companies that were taken over by the state in January, are offering subsidized food. The stores are meant to back up nutritional programs which, along with free medical care provided by 20,000 Cuban doctors sent to Venezuela in exchange for cheap petroleum, have become a mainstay of the government.
* Sale of imported electronic devices at below-market prices. The program is made possible by a deal with China in which Venezuela's government buys goods at the official exchange rate, rather than the black market rate, allowing it to sell cheaply to consumers.
September 22, 2010 - CARACAS: Declining production will continue to hit Pdvsa (VENEZUELA)
Source: El Universal
Exports of Venezuela’s state-run steel and aluminum companies declined 45 percent last year Economy Venezuela's executive office submitted to the Securities and Exchange Commission (SEC) the 2009 annual report in which the government recognized that state-run oil company Petróleos de Venezuela (Pdvsa) will continue being affected by declining production.
The report, which was prepared by the Ministry of Planning and Finance, includes Pdvsa's consolidated results, characterized by falling revenues, lower earnings, and a growing debt. The report conceded that the oil industry was hit by lower production and a decline in oil prices.
Financial authorities acknowledged that production and expenditures have been key factors in the financial situation of the oil industry. They added that these factors will continue to hit the industry in the future.
The annual reports highlights that Pdvsa's oil contractors have filed complaints against the state-run oil company over late payments.
The Ministry of Finance also reported the economic situation of Guayana's basic industries (steel, aluminum), where output has tumbled due to the energy crisis.
Steel production fell 31 percent in 2009, whereas aluminum output decreased by 6 percent and alumina dropped 14 percent. Total exports of such commodities declined 45 percent last year, the report added.
September 22, 2010 - CARACAS: Russia to supply Venezuela with 10 oil tankers: report (VENEZUELA)
PETROLEUMWORLD
Russia will supply Venezuela with 10 crude oil tankers for 700 million dollars (535 million euros), a spokesman for Russian shipbuilder OSK was quoted Wednesday as saying by RIA Novosti news agency.
"The agreement is for the supply of 10 tankers to Venezuela by 2016," said Igor Ryabov of United Shipbuilding Corporation, or OSK in Russian.
Seven of the tankers will be built in Russia and three in South Korea, where OSK has a joint venture agreement with Daewoo.
Venezuelan President Hugo Chavez and Russian Prime Minister Vladimir Putin signed a series of defence and energy deals in April including for the supply of oil tankers and jets for Venezuela's air force.
Regional
September 22, 2010 - India seeks energy security with Latin American interests - Regional
Source: Business News Americas
ONGC Videsh, the international unit of India's state oil behemoth ONGC, is seeking to shore up national energy security though E&P operations in Latin America, country manager for Colombia R K Khanna told BNamericas.
"ONGC goes overseas for many reasons. But one of the main reasons is energy security. We are the national oil company in India and besides exploring in India, we pursue a lot overseas," Khanna said. "ONGC right now is the only Indian or South Asian oil and gas company in Latin America."
In Colombia, the company has interests in five exploration blocks, three of which are offshore.
"Chevron and Ecopetrol have found gas offshore Colombia," Khanna said. "And yes, we hope that something positive will happen for us also."
ONGC Videsh has extensive offshore expertise with its Mumbai High offshore platform, which accounts for half of yearly domestic oil production in India.
Besides exploration, the company also has a stake in Colombian producer Mansarovar Energy.
Regionally, in addition to interests in blocks in Venezuela, Brazil and Cuba, the company is also looking at Peru and Ecuador, according to Khanna.
The full interview with Khanna will appear in an upcoming Oil & Gas Perspectives, for subscribers only.
Around the World
September 22, 2010 - China's Aug. oil demand Up 7.6% from year ago at 8.4 mil. b/d
Source: PETROLEUMWORLD
China consumed an estimated 35.54 million metric tons (mt) of oil in August, 7.6% higher than the corresponding month of last year, but a continuing decline from June's all-time peak, according to a just-released Platts analysis of official data from the People's Republic of China.
The August apparent* oil demand equates to an average 8.40 million barrels per day (b/d), compared with 8.47 million b/d in July and 8.97 million b/d in June this year.
Meanwhile, for the first eight months of 2010, China's apparent oil demand was 282.17 million mt or an average of 8.51 million b/d, up 10.9% from the corresponding period of 2009, Platts data showed.
Chinese refiners processed a total 34.73 million mt or an average 8.21 million b/d of crude oil in August, up 6.7% from a year ago, but down 1.6% from July, according to data released earlier in the month by China's National Bureau of Statistics. Crude imports jumped 13% from a year ago to 20.9 million mt, or about 4.92 million b/d.
"The growth in China's monthly implied oil demand has dropped to single digits since May from the 13% to 18% range seen in the first four months of this year. While this could be partly explained by a low comparison base in the early part of 2009 when the Chinese economy briefly stalled, one cannot ignore the month-on-month decline since July," said Vandana Hari, Asia editorial director at Platts.
"At first glance, the decline in Chinese oil consumption from June's record high of 8.97 million b/d seems counter-intuitive in the face of official data showing acceleration in the country's industrial output, retail sales, and imports in August. But that suggests the current trough in oil demand might be short-lived," Hari said.
Meanwhile, China's net refined product imports surged nearly 76% to 0.81 million mt in August from 0.46 million mt a year earlier. On a month-to-month basis, August imports surpassed July's 0.54 million mt as product exports dropped more sharply than imports.
On Monday, Mercopress based on its own sources reported that the ‘sequence of events” involving the South Atlantic patrol incident differed from those described by the Uruguayan Ministry of Defence spokesman who said that denying the Type 42 destroyer access to Montevideo was “business as usual”.
Mujica said he called British ambassador Patrick Mullee and the Foreign Affairs ministry (which gave the green light for HMS Gloucester) to explain the government’s decision which is above all the “priority” his government assigns to relations with Argentina plus the fact that the Malvinas issue “is very delicate”.
Anyhow, according to official sources, Mujica said that “this does not imply a concession to nobody, but rather to value the state of relations with Argentina and, --he emphasized-- we can’t take risks”.
The Uruguayan president added he was “quite surprised” how the news “had filtered”.
According to Mercopress sources in Uruguay, Falkland Islands and UK Defence, the request for HMS Gloucester, bound for the Falklands and sailing from Rio do Janeiro (where it had spent time), to call in Montevideo for supplies and fuel, was done well in advance of last week.
HMS Gloucester was due to visit Montevideo 15th-17th this month, and on the 14th she was cruising slowly towards the River Plate ready to arrive early am 15th when they received the word that due to ‘expected’ pressure from Argentina the call had been cancelled by Uruguay.
In the Falkland Islands, where HMS Gloucester arrived last week, the local radio station reported that the British military spokesperson at MPA has confirmed the news and “they are obviously disappointed with this last minute decision from the Uruguayan government, but respect their right to make it”.
The military spokesperson added that the British government has a longstanding close defence relationship with Uruguay and “this incident will not affect those good links”.
“The decision is seen as a solidarity gesture towards the Argentine government with which Uruguay is trying to improve relations”.
Mercopress also has reliable information that President Mujica contacts with the British ambassador actually took place last week in the midst of the incident (Sept. 14/15) when he personally turned up at the embassy.
On Tuesday President Mujica in his daily broadcast reaffirmed the importance of Argentina for Uruguay from a geographic, economic and social point of view.
“It’s simple and we must not forget, we live on this side of the River Plate and on the other side is Argentina and countries do not move. We must build our strategy and our future where we are, surrounded by whom we know, and the rest is speculation and has little to do with reality that hurts and bites”, said Mujica.
The Uruguayan president also pointed out the economic and tourist significance of Argentina for Uruguay, and the privileged logistic location of Uruguay with its rivers, water courses and navigable canals.
“These are issues we must make transparent and negotiate”, because they are “a mandate constructed by history but imposed by geography and have to do with our relation with Argentina”.
Mujica also mentioned what he described as a vital energy agreement for Uruguay’s future (almost ready to be signed) which is sharing a floating re-gasification plant with the River Plate neighbour and for which “we need an excellent diplomatic relation with Argentina”.
The president called on Uruguayans to remember the long Fray Bentos (pulp mills) conflict (dating back to 2006) which “we managed to overcome with diplomacy and with a constructive spirit, defending our national interests”.
Finally he said 400.000 Uruguayans live in Argentina, and Buenos Aires is the second largest Uruguayan city in the world.
“These Uruguayans are not foreigners, they feel they belong. It’s the only country (Argentina) in the world where this happens with us. This miracle should make us think”, concluded the Uruguayan president.
September 22, 2010 - BUENOS AIRES: Crown Point Completes Third Oil Well at Drilling Program in Argentina (ARGENTINA)
Source: Proactive Investors
Junior oil and gas company Crown Point Ventures has completed oil well EV 24, the third well of its three- well drilling program in the Golfo San Jorge Basin, Argentina, it said Wednesday.
The EV 24 well, which was completed in three separate zones, follows the completions of the EV 22 and EV 23 wells. The company has an 80% interest in the three-well program.
The first zone completed of the EV 24 well was a three metre zone in the Mina El Carmen formation, which during swab testing produced oil, at an 80% oil cut, at rates of 100 bbls of oil per day.
The other two zones were a five metre zone and a separate four metre zone in the Canadon Seco formation. During swab testing, these two zones produced oil at an 80% and 93% oil cut, respectively, for rates of 205 and 241 bbls of oil per day.
The EV 24 well, like its preceding wells, has created additional development drilling locations to be drilled later this year and in 2011, the company said.
Prior to the end of 2011, Crown Point expects to drill up to 12 more wells at El Valle, subject to financing. Between three and five of these wells are expected to be drilled either late this year or early next.
"We are pleased with the results from this drilling program, we had a 100% drilling success rate and experienced evaluation results at the upper end of the spectrum," said CEO Murray McCartney.
Just last month, the company reported that extended production testing at the EV 22 well generated flow rates of 443 barrels per day, of which 300 barrels per day was oil.
Earlier that month, Crown Point reported that the EV 23 well generated a cumulative test flow rate from the four zones between 250 and 300 barrels of oil per day, with the best response coming from a three metre section at 1005 metres that flowed with a 90% oil cut, at a rate of 180 bopd.
Canada-based Crown Point's main activities are focused in the onshore Golfo San Jorge and Neuquen Basins in Argentina, and the company is continually evaluating other growth opportunities in the region.
The company was up more than 3%, trading at $1.47 as of 11:05am ET on Wednesday.
September 22, 2010 - BUEN0S AIRES: Cash-strapped BP In Talks To Sell Major Oil Asset In Argentina (ARGENTINA)
Source: Official Wire
Cash-strapped BP is in talks with China's oil giant CNOOC to relieve itself of majority stake in Argentina's Pan American Energy LLC to raise cash for compensation claims.
BP is under mounting pressure to have cash ready for a spate of compensation claims over the Gulf of Mexico Deepwater Horizon disaster, the largest oil spill in U.S. history earlier this year.
BP and the China National Offshore Oil Corporation, the country's third largest national oil company and biggest offshore oil explorer, began talking about a further sale earlier this year after CNOOC acquired 20 percent of the Argentine company.
Pan American Energy is Argentina's second-largest oil producer, after Repsol YPF S.A., accounting for about 17 percent of the country's overall output.
Talks on a new deal that would give CNOOC control of the company appeared snagged over the final price tag. Industry analysts said the final price for the 60 percent, likely to be around $10 billion, would still require BP to raise another $20 billion in preparation for compensation payouts.
If implemented, this would be CNOOC's biggest purchase so far, after shopping for oil assets worth about $6 billion over the past four years.
China's national energy industries are implementing a state-led strategy to secure sources for hydrocarbons to meet existing and future demands in an expanding economy.
A question as yet unanswered is whether CNOOC, once in control of Pan American, would want to go it alone or would seek partnerships for a long-term operation, seen as a precursor to further Chinese acquisitions in Central and South America.
Meanwhile, CNOOC and China Petrochemical Corp. are in the market for a hefty share of Brazil's OGX Petroleo & Gas Participacoes S.A., which is conducting the largest private sector exploratory campaign in Brazil and owns oil fields in the Campos Basin.
OGX announced Monday it identified the presence of hydrocarbons in the Maastrichtian section of well 1-OGX-20-RJS, in the BM-C-41 block, in the shallow waters of the basin. OGX holds a 100 percent working interest in the block.
"This discovery highlights the importance of the Maastrichtian section in our blocks in the Campos Basin, where oil bearing reservoirs were initially identified in the OGX-5 well, Krakatoa prospect, and now were also found in the BM-C-41 block, once again presenting excellent permo-porosity characteristics," said Paulo Mendonca, general executive officer of OGX.
"The well OGX-20 marks the 1-year anniversary of the initiation of our exploratory campaign, which has demonstrated an unprecedented success rate and continues in full execution phase aiming for new discoveries and the delineation of the discoveries already made," Mendonca said.
Hydrocarbons were identified in two different levels in sandstone reservoirs in the Maastrichtian section of the OGX-20 well. The drilling of well OGX-20, also known as the Tupungato prospect, will follow to an estimated final depth of about 12,000 feet.
The OGX-20 well, located in the BM-C-41 block, is about 50 miles off the coast of the state of Rio de Janeiro at a water depth of about 430 feet. The rig Ocean Ambassador began drilling there Sept. 5.
September 21, 2010 - BUEN0S AIRES: Terra Energy to supply satellite surveillance on Argentine pipelines (ARGENTINA)
Source: Pipelines International
Terra Energy & Resource Technologies has entered into a Memorandum of Understanding (MoU) with Argentina’s Transportadora de Gas del Sur (TGS), to undertake a satellite monitoring trial for TGS’ pipeline assets.
Terra has proposed a satellite-based methodology to identify conditions which could lead to pipeline corrosion and other types of related costly breaks on TGS’ 6,000 km pipeline system.
If TGS deems the predictive results provided by Terra during the trial are accurate, a definitive contract could be negotiated.
The companies have been in discussions regarding solutions for pipeline monitoring issues that remain an ongoing challenge in transporting petroleum products through pipeline systems.
Terra Energy & Resource Technologies President Alexandre Agaian said “Satellite-based technologies are applicable to pipeline diagnostics issues potentially translating into major savings for gas transportation companies. Although this type of project is our first, we do not exclude the possibility that the research may be used to build universal spectral models for pipeline monitoring.”
September 22, 2010 - BUEN0S AIRES: Excelerate Energy announces the signing of a Term Sheet for a new LNG Import Project at Escobar, Argentina (ARGENTINA)
Source: Your Oil and Gas News
Excelerate Energy L.P. today announced the signing of a Term Sheet with a consortium formed by Argentina’s ENARSA S.A. and YPF S.A. to develop a second Argentinean liquefied natural gas (LNG) importation facility in Escobar, approximately 30 miles north of Buenos Aires..
The Escobar LNG import facility, complementary to the existing GasPort® operation south of Buenos Aires in Bahia Blanca, will allow delivery of up to an additional 500 million cubic feet of natural gas per day to Argentina’s market. Due to its favored location, the GasPort facility in Escobar will have a significant impact on the supply to Buenos Aires and the north of Argentina, adding flexibility and fast response to these growing markets..
“We are pleased to begin a project in partnership with ENARSA S.A. and YPF S.A.” said Rob Bryngelson, President and CEO of Excelerate Energy. “Excelerate Energy’s GasPort facility design has proven again to be an ideal solution for markets needing diverse energy sources, increased supply to meet growing demand, low capital investment and prompt project completion. The overwhelming success of the Bahía Blanca GasPort demonstrates the clear advantages and opportunities afforded by our Energy Bridge™ technology”.
The Escobar facility, scheduled for completion in May 2011, will be fully integrated with Argentina’s existing gas transmission utilities. The year-round facility will accommodate an Excelerate Energy 150,900m³ Energy Bridge Regasification Vessel® (EBRV®) receiving and regasifying LNG cargos via conventional LNG carriers utilizing Excelerate Energy’s proven Ship to Ship Transfer (STS) process alongside the jetty. In addition to providing basic engineering and design support, Excelerate will provide modular equipment and process control components based on its proven GasPort technology. .
Excelerate Energy’s first Argentine project, in collaboration with YPF, was to design a facility in the port city of Bahía Blanca. The Bahía Blanca LNG import terminal required minimal additional land-based infrastructure while providing flexibility, optimal storage and deliverability. The project took less than 12 months to design, permit and construct, at a fraction of the cost of a traditional onshore LNG terminal. .
Energy Bridge, Excelerate Energy’s proprietary floating LNG regasification and delivery system, combines the purpose-built EBRV® with a connection to a receiving facility. Excelerate’s specially designed EBRVs allow LNG to be vaporized onboard the ships so that it can be directly fed into natural gas pipelines. The EBRVs can load and unload liquid cargo in the same manner as standard LNG tankers yet also retain the flexibility to discharge the LNG as high pressure natural gas through the use of two independent methods. In an offshore, deepwater application, these vessels are specially equipped to discharge natural gas through the EBRV’s connection with a Submerged Turret Loading (STL™) buoy system (Gateway). When dockside, the EBRVs discharge natural gas through a high pressure gas manifold located forward of the vessel’s LNG loading arms (GasPort)..
Bolivia
September 21, 2010 - LA PAZ: Govt to decide on partner for lithium development in December (BOLIVIA)
Source: Business News Americas
The Bolivian government will decide in December which company it will partner with to develop lithium mining in the Uyuni salt flat, a spokesperson from state miner Comibol told BNamericas.
"The agreement will be for mining and processing the metal," the spokesperson said.
The government has offers from companies such as France's Bollore, South Korean state company Kores and compatriot firm LG, as well as Japanese companies Mitsubishi and Sumitomo.
Authorities have also received technological support proposals from the governments of Japan, Finland and Italy.
The Uyuni salt flat has a surface area of almost 10,000km2 and could have reserves of up to 8.9Mt lithium, 7.7Mt boron and 211Mt magnesium, in addition to sodium and calcium.
Some 5.4Mt of lithium could be mined from the salt flat, compared to 3Mt in Chile, 1.1Mt in China and 410,000t in the US, according to figures from the US Geological Institute.
Brazil
September 23, 21010 - BRASILIA: Petrobras `reverse privatization' looms as Brazil backs $78 billion offer
PETROLEUMWORLD
Brazil is reclaiming part of the Petroleo Brasileiro SA stake it sold to investors a decade ago in a record $78 billion share sale today.
The government will boost its stake in Petrobras, Latin America's largest company by market value, to as much as 55 percent from 39 percent now, Adriano Pires , head of the Brazilian Center for Infrastructure, a research group based in Rio de Janeiro, said yesterday in a telephone interview.
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc. , on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. The Petrobras transaction signals President Luiz Inacio Lula da Silva is seeking a greater role for the state in the economy ahead of the likely election of chosen successor Dilma Rousseff next month.
“Many are worried Petrobras is really becoming a policy arm of the Brazilian government,” Harold Sharon , who helps manage $100 billion including Petrobras shares at Lord Abbett in Jersey City, said in an interview. “As they sit back and look at this entire development, it looks far too interventionist.”
Petrobras is planning to sell as many as 2.718 billion common shares and 1.983 billion preferred shares. The government is buying about $42.5 billion-worth of stock in return for the right to develop about 5 billion barrels of reserves. State-run financial institutions such as the BNDES development bank will likely buy additional shares for cash, UBS AG said Sept. 21.
The Petrobras sale would amount to more than 20 percent of the value of all equity offerings already completed in 2010 and be more than three times the record $22.1 billion raised by Agricultural Bank of China in July, according to Bloomberg data.
Strengthening Control
Lula is strengthening control over the domestic oil industry after the Tupi discovery in 2007, the largest find in the Western Hemisphere since Mexico's Cantarell in 1976. Lula says Brazil is relying on the country's oil wealth to help raise the nation's 192 million people out of poverty.
“It's a clear process of reverse privatization,” Rogerio Freitas , who manages about $25 million at Teorica Investimentos in Rio de Janeiro, said in a telephone interview. “The Brazilian public sector will increase its participation, and that's not good.”
The government and state agencies will buy 56 percent to 69 percent of the offering, allowing Petrobras to place all the shares, Lilyanna Yang , an analyst at UBS AG in New York, said in a Sept. 21 note to clients.
Telephone messages left at Lula's press office in Brasilia were not returned. A spokeswoman at Petrobras's press office, who declined to be identified under company policy, wouldn't comment on the prospect of increased government control.
Rising Prices
Brazil, the world's largest producer of orange juice and coffee, is taking advantage of rising prices to exert greater control over commodity companies. Lula has asked Vale SA , the world's largest iron ore company, to invest in steelmaking plants in Brazil instead of sending iron ore abroad, while Dilma, a former Petrobras chairman, said Vale should face tougher requirements for tapping Brazil's natural resources, according to a February interview with Epoca magazine.
Dilma “has a very state-orientated discourse,” Roberto Padovani , chief economist at Banco WestLB do Brasil SA in Sao Paulo, said in a Sept. 22 telephone interview.
Brazil's government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The government holdings of Petrobras's voting shares will probably rise to about 65 percent after the share sale, according to the Infrastructure Institute's Pires.
$4.1 Billion Sale
Since the government sold more than a quarter of Petrobras's shares for about $4.1 billion in 2000, the company has invested in boosting the search for oil. State-owned rivals Petroleos Mexicanos and Petroleos de Venezuela SA struggled to stem declines and Pemex posted five straight years of lower output. Petrobras expects to double output by 2020.
Brazil's development bank, known as BNDES, will buy enough shares in the Petrobras offer to maintain its shareholding, Andre Carvalhal , head of the international market department at BNDES, said in a Sept. 15 interview. BNDES is the second-largest shareholder in Petrobras after Brazil's government.
About $379 billion has been raised by companies selling shares this year, the same pace as a year ago, data compiled by Bloomberg show. A total of 167 equity offerings valued at $29.5 billion have been postponed or withdrawn around the world this year, the most since at least 1998, the data show.
State's Interests
The share sale is putting the state's interests above those of minority shareholders, said Ed Kuczma , an emerging markets analyst at Van Eck Associates in New York, which manages $21 billion and sold Petrobras shares this quarter.
“We vote with where we put our funds and decided to get out,” Kuczma said in a telephone interview. “A lot of the investment is going toward downstream facilities like refining, which tend to have lower returns.”
Petrobras plans to spend $73.6 billion on refining and distribution in the five years through 2014. Profit margins there are typically lower than in its exploration and production business. That's about one third of planned spending of about $224 billion. The company will “assist” the government in meeting Brazilian fuel demand, it said in a Sept. 3 prospectus.
“This big offering is coming at a time when there's more concern about the government moving to the left,” said Nick Robinson , who helps manage $25 billion in emerging-market assets at Aberdeen Asset Management Inc. and owns Petrobras shares. “Most of the refineries are in the north and the current government gets most of its support from the north.”
Ended Monopoly
Brazil ended Petrobras's monopoly on exploration and production in 1997 to create competition and encourage the discovery of oil to fuel the domestic economy. The company also sold shares to finance exploration, with the government retaining control of the company's voting shares.
“The Brazilian federal government, as our principal shareholder, may cause us to pursue certain macroeconomic and social objectives,” Petrobras said in a Sept. 3 prospectus. “We may engage in activities that give preference to the objectives of the Brazilian federal government rather than to our own economic and business objectives,” the company said.
Petrobras on Sept. 17 doubled the amount of stock that can be issued in an additional allotment to as much as 20 percent of the main sale. That's on top of an already announced supplementary over-allotment of as much as 5 percent.
The offering has “very strong support from domestic pension funds and the government,” Christopher Palmer , who oversees about $5 billion as head of global emerging markets at Gartmore Investment Management Ltd. in London, said in a Sept. 21 telephone interview. “The government thinks this is a good investment.”
September 23, 21010 - BRASILIA: Hygroelectric Power - Energy From The Air Could Be The Green Wave Of The Future (BRAZIL)
Source: Science 20
Energy from the air? How very Tesla of you! But unlike America's favorite quirky inventor, this isn't transmitted power and no dogs have to die. It's using moisture from the air - and the more humidity you have the better.
Similar to the way solar cells capture sunlight, hygroelectric collectors would collect moisture and use it to light a house or recharge an electric car. Bonus: Panels on the rooftops of buildings could prevent lightning strikes - and the technology is already in the early stages of development.
Scientists once believed that water droplets in the atmosphere were electrically neutral and remained so even after coming into contact with the electrical charges on dust particles and droplets of other liquids. But new evidence suggests that water in the atmosphere picks up an electrical charge.
It may also help explain a 200-year-old scientific riddle about how electricity is produced and discharged in the atmosphere.
Study leader Fernando Galembeck in the Department of Physical Chemistry at University of Campinas (Brazil) confirmed it using laboratory experiments that simulated water's contact with dust particles in the air. They used tiny particles of silica and aluminum phosphate, both common airborne substances, showing that silica became more negatively charged in the presence of high humidity and aluminum phosphate became more positively charged.
Just as solar cells work best in sunny areas of the world, he said hygroelectrical panels would work more efficiently in areas with high humidity, such as the northeastern and southeastern United States and the humid tropics.
"Our research could pave the way for turning electricity from the atmosphere into an alternative energy source for the future," said Galembeck. "Just as solar energy could free some households from paying electric bills, this promising new energy source could have a similar effect."
September 22, 21010 - BRASILIA: Petrobras `Reverse Privatization' Looms as Brazil Control Rises (BRAZIL)
Source: Bloomberg
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc., on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. Photographer: Adriano Machado/Bloomberg Brazil is reclaiming part of the Petroleo Brasileiro SA stake it sold to investors a decade ago in a record $78 billion share sale today.
The government will boost its stake in Petrobras, Latin America’s largest company by market value, to as much as 55 percent from 39 percent now, Adriano Pires, head of the Brazilian Center for Infrastructure, a research group based in Rio de Janeiro, said yesterday in a telephone interview.
Petrobras slumped 29 percent this year, the second-worst performing major oil stock after BP Plc., on concern the sale will cut earnings and boost state interference after the company discovered the largest oilfield in three decades. The Petrobras transaction signals President Luiz Inacio Lula da Silva is seeking a greater role for the state in the economy ahead of the likely election of chosen successor Dilma Rousseff next month.
“Many are worried Petrobras is really becoming a policy arm of the Brazilian government,” Harold Sharon, who helps manage $100 billion including Petrobras shares at Lord Abbett in Jersey City, said in an interview. “As they sit back and look at this entire development, it looks far too interventionist.”
Petrobras is planning to sell as many as 2.718 billion common shares and 1.983 billion preferred shares. The government is buying about $42.5 billion-worth of stock in return for the right to develop about 5 billion barrels of reserves. State-run financial institutions such as the BNDES development bank will likely buy additional shares for cash, UBS AG said Sept. 21.
The Petrobras sale would amount to more than 20 percent of the value of all equity offerings already completed in 2010 and be more than three times the record $22.1 billion raised by Agricultural Bank of China in July, according to Bloomberg data.
Strengthening Control
Lula is strengthening control over the domestic oil industry after the Tupi discovery in 2007, the largest find in the Western Hemisphere since Mexico’s Cantarell in 1976. Lula says Brazil is relying on the country’s oil wealth to help raise the nation’s 192 million people out of poverty.
“It’s a clear process of reverse privatization,” Rogerio Freitas, who manages about $25 million at Teorica Investimentos in Rio de Janeiro, said in a telephone interview. “The Brazilian public sector will increase its participation, and that’s not good.”
The government and state agencies will buy 56 percent to 69 percent of the offering, allowing Petrobras to place all the shares, Lilyanna Yang, an analyst at UBS AG in New York, said in a Sept. 21 note to clients.
Telephone messages left at Lula’s press office in Brasilia were not returned. A spokeswoman at Petrobras’s press office, who declined to be identified under company policy, wouldn’t comment on the prospect of increased government control.
Rising Prices
Brazil, the world’s largest producer of orange juice and coffee, is taking advantage of rising prices to exert greater control over commodity companies. Lula has asked Vale SA, the world’s largest iron ore company, to invest in steelmaking plants in Brazil instead of sending iron ore abroad, while Dilma, a former Petrobras chairman, said Vale should face tougher requirements for tapping Brazil’s natural resources, according to a February interview with Epoca magazine.
Dilma “has a very state-orientated discourse,” Roberto Padovani, chief economist at Banco WestLB do Brasil SA in Sao Paulo, said in a Sept. 22 telephone interview.
Brazil’s government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The government holdings of Petrobras’s voting shares will probably rise to about 65 percent after the share sale, according to the Infrastructure Institute’s Pires.
$4.1 Billion Sale
Since the government sold more than a quarter of Petrobras’s shares for about $4.1 billion in 2000, the company has invested in boosting the search for oil. State-owned rivals Petroleos Mexicanos and Petroleos de Venezuela SA struggled to stem declines and Pemex posted five straight years of lower output. Petrobras expects to double output by 2020.
Brazil’s development bank, known as BNDES, will buy enough shares in the Petrobras offer to maintain its shareholding, Andre Carvalhal, head of the international market department at BNDES, said in a Sept. 15 interview. BNDES is the second-largest shareholder in Petrobras after Brazil’s government.
About $379 billion has been raised by companies selling shares this year, the same pace as a year ago, data compiled by Bloomberg show. A total of 167 equity offerings valued at $29.5 billion have been postponed or withdrawn around the world this year, the most since at least 1998, the data show.
State’s Interests
The share sale is putting the state’s interests above those of minority shareholders, said Ed Kuczma, an emerging markets analyst at Van Eck Associates in New York, which manages $21 billion and sold Petrobras shares this quarter.
“We vote with where we put our funds and decided to get out,” Kuczma said in a telephone interview. “A lot of the investment is going toward downstream facilities like refining, which tend to have lower returns.”
Petrobras plans to spend $73.6 billion on refining and distribution in the five years through 2014. Profit margins there are typically lower than in its exploration and production business. That’s about one third of planned spending of about $224 billion. The company will “assist” the government in meeting Brazilian fuel demand, it said in a Sept. 3 prospectus.
“This big offering is coming at a time when there’s more concern about the government moving to the left,” said Nick Robinson, who helps manage $25 billion in emerging-market assets at Aberdeen Asset Management Inc. and owns Petrobras shares. “Most of the refineries are in the north and the current government gets most of its support from the north.”
Ended Monopoly
Brazil ended Petrobras’s monopoly on exploration and production in 1997 to create competition and encourage the discovery of oil to fuel the domestic economy. The company also sold shares to finance exploration, with the government retaining control of the company’s voting shares.
“The Brazilian federal government, as our principal shareholder, may cause us to pursue certain macroeconomic and social objectives,” Petrobras said in a Sept. 3 prospectus. “We may engage in activities that give preference to the objectives of the Brazilian federal government rather than to our own economic and business objectives,” the company said.
Petrobras on Sept. 17 doubled the amount of stock that can be issued in an additional allotment to as much as 20 percent of the main sale. That’s on top of an already announced supplementary over-allotment of as much as 5 percent.
The offering has “very strong support from domestic pension funds and the government,” Christopher Palmer, who oversees about $5 billion as head of global emerging markets at Gartmore Investment Management Ltd. in London, said in a Sept. 21 telephone interview. “The government thinks this is a good investment.”
September 22, 2010 - BRASILIA: US behind Brazil, China and India as preferred place to invest, says Bloomberg (BRAZIL)
Source: Mercopress
The United States has fallen behind emerging markets Brazil, China and India as the preferred place to invest, according to a survey from Bloomberg. The US ranked first three months ago in the last quarterly Bloomberg Global Poll.
Decrease fontIncrease fontPrintShareComment A majority of respondents support Bernanke performance and the Fed’s policies
But in the September poll of 1,408 investors, analysts and traders who are Bloomberg subscribers, respondents rate the US fourth for potential returns over the next year, behind Brazil and China, tied for first, and India, in third place.
The US economic situation “is obviously unsustainable, and the concerted attempt to suspend disbelief is playing increasingly poorly abroad” says poll respondent Eric Kraus, chief strategist for Otkritie Brokerage House in Moscow.
“One can delay, but no one can forestall the un-wind of a multi-decade credit bubble.”
Economic reports released since the June poll show US GDP growth slowed to 1.6% in the second quarter from 3.7% in the first quarter. In the final quarter of last year, GDP grew at a 5% annual rate.
Expectations for US GDP growth next year have dropped to a median forecast of 2.5% in September from 2.9% in June, according to Bloomberg’s monthly survey of economists.
Since the June survey, US stock markets have been on the rise. The S&P’s 500 Index has risen 3.62% since the last investor poll was completed June 3. That’s not as much as Brazil’s Bovespa Index, which is up 10.56% and India’s Bombay Stock Exchange Sensitive Index, which is up 10.44%. The U.S. stocks still did better than China’s Shanghai Stock Exchange Composite Index, which has risen 1.41% since June 3.
Two-thirds of investors say they believe Federal Reserve policy makers will ease monetary policy through bond purchases by the end of the year. A similar 65% majority say the Fed bond purchases won’t boost U.S. economic growth.
Overall, investors give the central bank favourable marks, with a 57% majority believing its monetary policy is “about right.” More say it has been too aggressive, the view of 26%, than say it has been too timid, a view held by 14%.
Fed Chairman Ben S Bernanke is viewed favourably by 71% of respondents, up from 67% in June. He ranks highest in a list of eight global leaders and policy makers that includes President Obama, German Chancellor Angela Merkel and European Central Bank President Jean Claude Trichet.
Only 1 out of 6 investors believes the US economy is currently improving, though a 45% plurality considers the US “stable.” Another 37% believe the US is deteriorating.
The poll also shows that confidence in the US dollar has slipped since June, when 63% of investors believed the US currency would rise against the Euro during the following three months. Forecasts are now evenly divided: 34% now expect a stronger dollar in three months; 32% expect little change; and 30% a weaker dollar.
The Bloomberg Global Poll was conducted by Selzer & Co., of Des Moines, Iowa, and has a margin of error of plus or minus 2.6 percentage points.
September 22, 21010 - BRASILIA: Petrobras yields climb as share sale not enough: Brazil credit (BRAZIL)
Source: PETROLEUMWORLD
Petroleo Brasileiro SA's borrowing costs are surging to a two-month high on concern the state-owned oil company will tap the bond market for financing even after it completes a stock sale of up to 134 billion reais ($78 billion).
Petrobras's 7.875 percent bonds due in 2019 yield 4.65 percent, or 100 basis points more than Brazilian government bonds that mature the same year, according to data compiled by Bloomberg. The gap swelled from 57 basis points on Aug. 2.
The company's debt is lagging behind similar-rated bonds sold by OAO Gazprom , the Moscow-based natural gas exporter. Yields on Petrobras's 2019 bonds fell 99 basis points this year, compared with a decline of 136 on Gazprom's similar-maturity notes. Petrobras , which is issuing $42.5 billion of stock to the government in return for the rights to develop 5 billion barrels of oil reserves, will receive about $30 billion in cash from the offering, making a return to the bond market likely, according to Royal Bank of Canada.
“The company is still going to have to turn to the debt market for their huge financing needs,” said Eduardo Suarez , an emerging-markets strategist at RBC in Toronto. “The oil they will develop isn't going to turn into cash for quite some time.”
The yield on Petrobras's $2.75 billion of 7.875 percent notes climbed 31 basis points, or 0.31 percentage point, since Aug. 19 to 4.65 percent yesterday, Bloomberg data shows. The government's 8.875 percent notes yielded 3.65 percent, up 6 basis points during the same period. Petrobras is rated Baa1 by Moody's Investors Service, two levels above the government.
Debt ‘Limits'
Petrobras, which lost 26 percent of its market value this year, posted the second-smallest profit in the second quarter among the world's 10 largest oil producers. It surpassed London- based BP Plc. , whose earnings were hurt by the Gulf of Mexico oil spill.
Chief Executive Officer Jose Sergio Gabrielli said in an April 30 interview in Sao Paulo that the company doesn't plan to sell bonds this year because it's reaching the “upper limits” of debt ratios before putting credit ratings at risk.
Petrobras, based in Rio de Janeiro, will seek to raise $96 billion in debt and equity over the next five years to finance its investment plan, said an official who declined to be identified in accordance with company policy. The $224 billion plan is the biggest in the oil industry.
Tupi
“They will have to go back to the debt market,” said Esther Chan , who helps manage $5 billion of emerging-market assets at Aberdeen Asset Management Plc in London. “Investors aren't very keen.” Petrobras will have to raise $114 billion in debt over the next five years, Chan estimates.
Petrobras is seeking to finance the development of fields such as Tupi, the largest discovery in the Americas in three decades.
The extra yield investors demand to own Brazilian government dollar bonds instead of U.S. Treasuries widened 10 basis point to 211, according to JPMorgan Chase & Co.
The cost of protecting Brazilian bonds against default for five years fell less than one basis point to 118, according to CMA DataVision prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. Five-year swaps on Petrobras debt climbed to 158 basis points from 123 at the start of 2010.
The yield on Brazil's interest-rate futures contract due in January, the most active in Sao Paulo trading, was unchanged at 10.67 percent.
Dollar Purchases
The real gained 1.3 percent to 1.7108 per dollar by 5:35 p.m. in New York. It's up 34 percent against the dollar since the beginning of last year, the second-best performer among the most-traded currencies tracked by Bloomberg.
The government authorized its sovereign wealth fund to start purchasing foreign currencies such as the dollar as part of an effort to slow the real's rally, the Finance Ministry said in a statement yesterday.
Petrobras said Sept. 17 it boosted the value of its share sale to as much as 134 billion reais from about 129 billion reais because of higher demand. The company plans to sell 1.59 billion new preferred shares and 2.17 billion new voting shares in its main offer on Sept. 29.
“There's going to be enough interest for Petrobras's offering, so it will be able to avoid going to the debt market,” said Christopher Garman , the Eurasia Group's director for Latin America in Washington D.C. “They're going to buy themselves some time.”
‘Ideal'
The company's debt as a percentage of equity climbed to 34 percent in the second quarter from 32 percent in the previous quarter and 28 percent a year earlier, Chief Financial Officer Almir Barbassa told reporters on Aug. 13. A ratio of 25 percent to 35 percent is “ideal,” he said.
Standard & Poor's cut Petrobras one level to BBB-, the lowest investment grade, in June 2009 on concern the company's investment plan was too big.
Milena Zaniboni , an analyst at S&P, didn't immediately return calls and messages for comment.
Petrobras's bonds yields are also rising on concern the share sale will lead to more government involvement in the company. The Brazilian government owns a 32 percent stake in Petrobras and controls the company through 55.6 percent of voting shares. The sale will probably lead to an increase in the government's stake, the company said in a Sept. 3 prospectus.
“The mechanics of the transaction have a lot of people uncomfortable because it just brings to the surface a likely increase in the political component to the management of Petrobras,” said Duncan Littlejohn, who helps manage $1.6 billion in global private equity funds at Paul Capital in Sao Paulo. “It has taken a different dimension because the company is going to get bigger after this offering.”
September 22, 2010 - BRASILIA: Punters line up for slice of Petrobras (BRAZIL)
Source: UPSTREAMONLINE
Brazilian state oil company Petrobras has received more than enough investor interest to sell all the shares in a massive offer worth up to $79 billion.
The offer is "comfortably oversubscribed" with strong investor demand, said one source, though is probably not two times oversubscribed given the size of the deal, reported Reuters.
A second source said heavy demand for shares was fueled by the strong participation of state pension funds and institutional investors.
The sources asked not to be identified because they are not allowed to speak publicly about the share offer, which prices today after markets close.
The issue, the biggest in capital markets history, includes a $42.5 billion oil-for-shares swap between Petrobras and the government.
The company will use the proceeds to finance the world's largest oil investment program that focuses on Brazil's vast deep water crude deposits that the South American nation hopes will turn it into a major energy exporter.
This month the company filed to sell 1.59 billion new preferred shares and 2.17 billion new common shares - figures that do not include a "greenshoe" option that would expand the offer on extraordinary demand.
At yesterday's closing prices, the sale of those shares could fetch 106 billion reais ($61.5 billion).
The "greenshoe" option could take the offering to as much as $79 billion.
Colombia
September 23, 2010 - BOGOTA: La Cortex to switch Puerto Barco taps back on (COLOMBIA)
Source: UPSTREAMONLINE
South-America focused operator La Cortez said today it has decided to restart production from the Puerto Barco field in Colombia before the end of the first quarter of next year.
“This plan includes conducting workover activities in some of the existing wells,” said La Cortez in a statement.
“In addition, the plan includes upgrading the production facilities as well as the access road and reprocessing of around 138 kilometres of 2D is under way.”
Meanwhile the company said together with partner and operator of the Putumayo 4 Block, Petronorte, it has identified a layout plan for 2D seismic on the Block.
The new seismic, which will cover around 104 kilometres in the north part of the block, is expected to be carried out in the fourth quarter.
In addition, the company also plans to drill the first exploratory well on the block during the first half of next year and is currently seeking regulatory approval.
September 23, 2010 - BOGOTA: Endesa to build 837-million-dollar hydro plant in Colombia (COLOMBIA)
Source: Expatica
Spanish energy group Endesa, owned by Italy's Enel, announced Thursday plans to invest 837 million dollars (627 million euros) in a hydroelectric plant in Colombia.
The plant will have a capacity will generate 2,200 Gigawatts of electricity per year, it said in a statement.
It will be built in the southeastern region of Huila and supplied by the Magdalena river, Colombia's largest.
It will be the first hydroelectric plant built by a private company in Colombia and Endesa's largest in Latin America.
Endesa, in which Enel owns 92 percent, is the largest private company in the energy sector in Latin America.
Septemebr 23, 2010 - BOGOTA: Geothermal projects in Colombia and Ecuador (COLOMBIA)
Source: Pennenergy
22 September 2010 - The governments of Colombia and Ecuador are currently working together on a project to develop geothermal generation in the border region of these South American nations.
According to an official statement issued by the Colombian authorities, the project is known as the Bilateral Agreement Geothermal Project Chiles-Cerro Negro-Tufino, and its first phase is expected to be completed within 18 months.
The collaboration of both countries to generate this type of electricity is being carried out in other parts of the region. For example, in the Ecuadorian province of Carchi, a project is underway that is expected to generate 138 MW.
Septemebr 23, 2010 - BOGOTA: Are Smart Grids the future of power distribution in Latin America? (COLOMBIA)
Source: Power Gen Worldwide
Alex Lima, regional sales director for Latin America for IT giant Microsoft, said in an interview with Business News Americas, that the future of electricity networks in the Latin American region lies in having them linked to intelligent systems. In other words, the Smart Grid.
According to Lima, making the electricity networks intelligent has wide implications in the world of politics, society, technology and the economy. He highlighted the numerous benefits of such networks, including: better energy efficiency, greater capability to monitor electrical systems, improved control over fraudulent activities and a greater opportunity to increase the sale of electricity.
American company Silver Spring Networks, whose main activities derive from the implementation of smart grid solutions, has said recently it intends to open its first Latin American office in Sao Paulo, Brazil.
The company will find itself competing to control the market against its rival ConectiSys, the US firm that has supplied its intelligent network technology to Gas Natural Fenosa of Spain. The Spanish company uses this technology in the distribution of electricity in Central America, and in particular Nicaragua.
According to an article in Vanguardia, a Colombian newspaper, the race for the installation of intelligent systems to control the electricity grids in the American continent started in San Mateo, California, USA, where the GreenBeat conference was held late last year.
The conference’s objective was to present ideas and projects that would help improve and modernize the North American electricity network system.
Former US vice president Al Gore, who is known around the world for his work as defender of clean energy and for his struggle against climate change, was present.
The Nobel Peace Prize winner of 2007 said that the installation of intelligent control to direct electricity networks would mean an entire revolution in the sector. He went on to compare this development to the use of the internet for the first time in the 1990s.
The Vanguardia article went on to say that Colombia has been one of the first countries in Latin America to follow the steps of the US when it comes to the implementation of Smart Grids.
By the end of 2009, Colombia was the host of the International Fair of the Electric Sector, where the main discussion gravitated around the installation of such networks as the future key for the distribution of energy.
The increase in the Latin American population over the next decades is also a factor to consider when addressing this topic. Such an increase will bring with it considerable growth in the demand for electricity. In order to cope with it, experts have said, it will be necessary to implement the Smart Grid concept.
Search giant Google has also been experimenting with intelligent systems that allow the company to register, analyze and show the figures of the electric activity in buildings or in private homes.
In that way, private consumers can know instantly how much electricity they have consumed and are able to receive reports about their general use. This allows them to manage their electricity consumption more effectively.
The Vanguardia article also notes that despite the growth in renewable energy sources in Latin America they will not be sufficient to satisfy demand alone, and a lot more needs to be done to be able to store their intermittent power and distribute it in an efficient way. This is where intelligent networks or Smart Grids play a key role.
In some South American countries, such as Venezuela, power cuts are frequent. This problem could also be solved y through the use of intelligent grids.
The introduction of new natural resources that can produce electricity is important but they do not guarantee the correct distribution of the electricity. This is why the installation of the smart Grid will become crucial in the years to come in
September 22, 2010 - BOGOTA: Ecopetrol Soars 70% in 2010 (COLOMBIA)
Source: The Street
A seldom mentioned emerging-market country is nurturing a future oil giant. Colombia is a growing and dynamic economy. Some people think of Colombia as a violent and lawless place dominated by drug cartels, or perhaps even confuse it with socialist Venezuela. But, the truth is that Colombia has come a long way.
After nearly 30 years of drug-related violence, a new pro-business government and a U.S.-supported crackdown have vastly improved conditions in the past decade. Since 2002, terrorist acts are down 84%, kidnappings have dropped 88% and the homicide rate is the lowest in 22 years. Colombia's crime rate is now lower than that of many U.S. cities. As a result, Colombia is attracting more investors and domestic spending is on the rise. Its gross domestic product grew 5% in the first half of 2010 (compared with 1.6% in the second quarter in the U.S.), and the stock market has reacted.
The Colombian exchange traded fund Global X/InterBolsa FTSE Colombia 20 ETF(GXG_) has soared 48% so far this year and was the top-performing country-specific ETF for the year as of July 30. Colombia is rich in natural resources, including one of the largest deposits of oil and gas in Latin America. There are just two Colombian companies trading on the New York Stock Exchange, but luckily, one of them has been on fire. Ecopetrol is Colombia's largest integrated oil company, and is also the fourth-biggest oil major in Latin America. The company focuses on exploration and production, but is also involved in refining and transportation. About 90% of the firm is owned by the state. Ecopetrol explores for oil and gas across Colombia and is expanding internationally through exploration partnerships in Brazil, Peru, and the United States (Gulf of Mexico).
As of the end of the first quarter, Ecopetrol had reserves of 1.9 billion barrels of oil equivalent (BOE), 71% of which is oil and 29% gas. The company's production for the quarter was 83% oil and 17% gas. The company, like the country, is looking to the future. Ecopetrol has hyper-aggressive plans to expand and become a major international oil giant. It plans to invest a whopping $80 billion on expansion in the next 10 years and forecasts dramatic production and reserve gains in a relatively short period. The company is targeting daily production growth of 27% in 2011 (from spring 2010 levels) and reserve growth of 68% by 2015 and more than 200% by 2020.
September 22, 2010 - BOGOTA: Colombia oil production continues upward swing (COLOMBIA)
Source: Colombia Report
Oil production and exploration continues to expand in Colombia, with companies planning to open 110 new exploratory wells this year.
According to Portafolio, several companies are requesting permits to explore new territory such as Llanos Orientales (Eastern Plains), the Magdalena Valley, and areas near the Caribbean coast.
For the past two months, these companies have been going through proceedings with the Environment Ministry to secure the permits necessary to expand exploration in new parts of the country.
Ecopetrol, Cepcolsa, Emerald, Ramshorn, Petrolifera, Pacific Stratus, Thorneloe, Columbus Energy, and Nexen are seeking permits. In 2009, the government's oil-licensing agency, the ANH, reached 58 agreements. For 2010, the current figure is at seven agreements, but will most likely surpass 2009 contracts, when the agreements from the Open Round Colombia 2010 are finalized.
Colombian oil production is expected to continue to consistently rise. Analysts credit the increase in investment and production to the country's decline in violence and to regulatory reforms.
Colombia has the fifth-largest crude oil reserves in South America, and currently exports around half of its production, with a significant portion of this going to the United States
Cuba
September 22, 21010 - HAVANA: Cuba props foreign investment projects and fires basic industry minister (CUBA)
Source: Mercopress
President Raul Castro sacked his energy and resources minister, the last remaining minister from his brother Fidel cabinet. Minister for basic industry, Yadira Garcia, was fired late Sunday for “shortcomings,” specifically exerting “weak control over resources set aside for investment and production,” an official declaration read on state television said.
Yadira García was removed because of “shortcomings”, but was also the last of cabinet ministers named by Fidel Castro
The basic industry ministry is responsible for electricity, oil, nickel, rubber and medicine production. Garcia, a member of the political bureau of Cuba's ruling Communist Party, was named to the portfolio in 2004 after her predecessor was sacked following a domestic energy crisis.
Garcia's deputy, Tomas Benitez, will head the ministry until a successor is named.
Since taking over the presidency from his ailing brother in 2008, Raul Castro has embarked on a number of changes that have rolled back Fidel Castro's communist revolution.
He has replaced or reshuffled more than a dozen members of government, notably ejecting vice president Carlos Lage and foreign minister Felipe Perez Roque, both accused of harbouring unacceptable ambitions to take power.
Other Fidel-era appointees who lost posts or decision-making power include those in charge of the ministries for the economy, agriculture, sugar, communications, transport, trade, commerce, finance, construction, food industry, light industry, steelmaking industry, science and technology, and the head of the central bank.
The Ministry for Basic Industry concentrates most foreign capital investments with exploitations projects for oil with corporations from at least ten different countries including Brazil, Venezuela, Canada, China and Russia.
Ms García was considered a vital link in relations with Venezuela, Cuba’s main economic, political and trade associate. With Venezuela she managed the main refinery in Cuba and the construction of a petrochemical pole, among other multi-million projects involving the two countries.
The Cuban oil industry is preparing to drill with foreign partners in the Gulf of Mexico next year and in partnership with Venezuela is developing its refining and other oil related infrastructure.
Unrefined nickel is Cuba's most important export at around 70,000 tons per year and a joint venture with Venezuela plans to add 60,000 tons of ferronickel by 2013.
Chile
September 21, 2010 - SANTIAGO: MPX to continue with Castilla thermo -
Business News Americas
Brazilian generator MPX Energia will continue with the legal and environmental process for the 2.4GW coal-fired Castilla thermo plant in northern Chile despite a ruling against the project by the Copiapo appeals court last week, a company spokesperson told BNamericas.
"MPX maintains the conviction that the Castilla plant complies with all the environmental requirements of Chilean law and also those stipulated by international financing organizations for projects of this type," the company said.
MPX also denied rumors that it was looking for a partner in the project.
"MPX is not looking for partners," the spokesperson said. "Chile is very strategic. What happens is that a project of this magnitude will always mean people approach the company with proposals. That is all."
The planned US$4.4bn project, to be constructed 80km south of Copiapo, has suffered numerous setbacks during the permitting process.
MPX first submitted the EIS in December 2008 and was given an extension in March 2009 to respond to questions from various agencies involved in the environmental approval process.
In February of this year, the EIS was once again delayed when sanitation authorities gave an unfavorable review of the project, according to MPX.
Plans for the plant call for the construction of two 127MW diesel-fired turbines and six 350MW pulverized coal-fired units. The project also calls for the construction of a multi-use port, which would ship in the coal required to fire the plant.
The rejection of the 540MW Barrancones coal plant last month by President Sebastian Piñera has put the spotlight on thermo projects in Chile. Castilla is the largest of the numerous coal-fired plants in the pipeline for Chile's northern regions.
September 22, 2010 - SANTIAGO: Chilean Coal Plant Includes Solar Power (CHILE)
Source: OfficialWire
A concentrated solar power facility in Chile will help reduce emissions at a coal-fired power plant, German and French energy companies announced.
GDF Suez announced it had teamed with German renewable energy company Solar Power Group to develop a 5-megawatt thermal solar concentrated solar power plant. The facility will provide stream to the 150 MW Mejillones coal plant in northern Chile.
The solar facility will heat water for steam production, giving the coal plant the ability to "store" thermal energy by using steam to drive turbines for electricity after sunset.
The so-called solar boiler will connect directly to the coal-fired power plant, reducing coal consumption and decreasing the amount of harmful greenhouse gas emissions.
"The inclusion of our solar boilers in the Mejillones plant is an important milestone on a path toward affordable clean energy production," said Jacques de Lalaing, founding and managing director of Solar Power Group, in a statement.
GDF Suez points to estimates from the International Energy Agency that suggest more than 10 percent of global electricity production will come from concentrated solar power by 2050.
September 22, 2010 - SANTIAGO: Marginal Costs On Chile's Largest Power Grid Seen Falling In 4Q -Analysts (CHILE)
Source: The Wall Street Journal
-Melting snow and ice is expected to push marginal costs on Chile's largest power grid down as much as 20% on the year, to average around $100 per megawatt hour in the fourth quarter, analysts said Wednesday.
While an unusually dry rainy season pushed marginal costs higher, and electricity bills along with it during the year, melting ice and snow could increase hydroelectric generation and pull those prices back down, said energy analyst Tomas Gonzalez of investment bank Celfin Capital.
The SIC grid, which supplies energy to more than 90% of the nation's population, has 47% of its installed capacity in hydroelectric power generation.
During the first half of the year, marginal costs on the SIC averaged $140 per megawatt hour, while for the year, those costs are expected to average around $135 per megawatt hour.
Meanwhile, costs and bills are seen likely to rise in February, March and April as much as 7% per month as snow melt runs dry and the country awaits a new rainy season.
"When the snow and ice melts thin out, we'll see higher dependence on diesel and liquefied natural gas, which will have the effect of increasing marginal costs and consequently the electric bill you and I pay," said energy analyst Marcelo Catalan with investment bank BCI.
The largest generators on the SIC grid are Empresa Nacional de Electricidad SA (EOC, ENDESA.SN), Colbun SA (COLBUN.SN) and AES Gener SA (GENER.SN, AESZF). Endesa is owned by Chilean energy holding company Enersis SA (ENI, ENERSIS.SN), while AES Gener is owned by U.S. energy company AES Corp. (AES).
Ecuador
September 22, 2010 - QUITO: Ecuador's Environment (ECUADOR)
Source: The Economist
IN 2007, Ecuador’s president, Rafael Correa, proposed a rather unorthodox approach to exploiting his country’s oil resources. Rather than pumping the estimated 900m barrels in the Ishpingo-Tiputini-Tambococha field buried below the Yasuní rainforest park—which represent around a fifth of the country’s total reserves—he suggested that the world pay his country $3.6 billion to leave them underground, thus preventing 436m tonnes of carbon dioxide from entering the atmosphere.
The scheme’s prospects were always dubious. The oil’s net present value is over four times greater than the market price of the European carbon credits Mr Correa hoped to obtain. Moreover, the programme’s eligibility for the credits was questionable, since taking Ecuadorean oil off the market might well lead companies to extract even dirtier sources of petroleum elsewhere. And Ecuador’s spotty record of honouring its international commitments gave would-be participants little comfort that it would abide by the deal’s terms—Mr Correa defaulted on $3.2 billion of bonds in 2008.
Nonetheless, Ecuador forged ahead. In 2008, it received a €300,000 ($425,000) grant from Germany for feasibility studies. And six weeks ago, it signed a memorandum of understanding with the United Nations Development Programme, which stipulated that the organisation would administer a trust fund that would use payments into the scheme for Ecuadorean renewable-energy projects. Chile donated a polite $100,000 last week.
Now, however, the wheels are starting to come off. Ecuador had been counting on a $700m contribution from Germany over the next decade. Dirk Niebel, the German government’s cooperation minister, recently wrote that the plan lacks “a comprehensive rationale, a clear structure of goals and concrete statements on which guarantees will be given,” suggesting that few German funds will be forthcoming. To assuage such concerns, Ecuador’s patrimony minister, María Fernanda Espinosa, will travel to Germany next week. But she will have a tough time accounting for the decision by Ecuador’s Congress last week to cancel the country’s investment-protection treaty with Germany.
The plan is also attracting increased scrutiny at home. Local activists have long questioned Mr Correa’s commitment to protecting the environment. They point out that the scheme would protect just 15% of the Yasuní park, and that the government continues to subsidise domestic fuel consumption.
Perhaps the best indicator of the programme’s prospects is that the president himself is hedging his bets. Even as he seeks contributions to the fund, he has continued preparations for a “Plan B” in which the state oil company would drill the field.
September 23, 2010 - QUITO: Ecuador's Rio Napo To Raise Output By 16% Next Year: Official (ECUADOR)
Source: The Wall Street Journal
The Ecuadorean-Venezulean owned Rio Napo will increase production at its Sacha oil field by 16% next year to 60,000 barrels per day, a high-level company official told Dow Jones Newswires.
"We plan to drill 30 wells during next year and reach an output of about 60,000 barrels per day," said Rio Napo's General Manager, Hugo Coronel, in an interview late Wednesday.
Rio Napo is 70% owned by Ecuador's state oil company, Petroecuador, while Venezuelan state oil company, Petroleos de Venezuela S.A., or PdVSA, holds 30%. The Sacha oil field, in Ecuador's Amazon region, has estimated reserves of 491 million barrels of crude oil.
Currently Sacha produces about 51,600 barrels of oil per day. By the end of the year, said Coronel, Sacha should produce an average of 53,000 barrels per day, and by 2014 or 2015 the company plans to reach an oil output of around 70,000 barrels per day.
Rio Napo began to operate the Sacha field last November with an average oil output of about 49,000 barrels per day, Coronel said. It will invest $621 million in exploration and production activities at Sacha over the next 10 years. About 60% of this investment will be used in the first five years.
Coronel said Rio Napo has already invested $118 million, and next year the company plans to invest about $150 million.
The Rio Napo joint venture is part of a strategy to integrate the Ecuadorean and Venezulean state oil companies. The venture began in February 2007 with an agreement to swap Ecuadorian oil for Venezuelan diesel and naphtha.
September 22, 2010 - QUITO: Back for More in Ecuador (ECUADOR)
Source: The American Law Daily
Ecuadorian judge Leonardo Ordonez, who currently presides over the case where indigenous plaintiffs seek to hold Chevron Corporation liable for pollution of the Amazon river basin, closed the evidentiary phase of the trial, as plaintiffs released a new damages recommendation of $90 to $113 billion. Chevron has sought to discredit the damages figure previously embraced by plaintiffs--up to $27 billion--by attacking the credibility of the court-appointed expert who recommended the figure (click here and here for previous reports on the matter). Far from rolling over, plaintiffs have doubled down, and doubled down again.
The close of evidence in Ecuador came a day after a San Francisco federal magistrate granted a motion by Ecuador for discovery under 28 U.S.C. section 1782 in aid of a foreign tribunal, and ordered the deposition of the man who produced the videotape that Chevron has cited as evidence of judicial prejudice and corruption. It was a turning of the tables for Chevron, which has won 1782 motions from coast to coast.
On the two biggest-ticket items, plaintiffs' damages numbers greatly exceed the earlier recommendations of controversial court-appointed expert Richard Cabrera. To calculate the cost of cancer deaths, the new upper-range figure of about $70 billion is based on a projection of both past and future deaths allegedly attributable to oil pollution in a large region surrounding the oil concession. (Cabrera had counted only past deaths.) To calculate unjust enrichment, the plaintiffs reached a new upper-range figure of about $38 billion by multiplying the amount that the oil company allegedly saved through cutting corners by a factor of four. Plaintiffs reason that this is necessary to deter similar conduct because they estimate the oil company ran only a 25 percent chance of being penalized. With a maximum claim of $113 billion, the suit against Chevron, first filed in U.S. court in 1993, arguably takes the title of world's biggest dispute from the arbitration filed against Russia by the former shareholders of Yukos Oil Company. The San Francisco ruling, ordering the deposition of the videotaper Diego Borja, was based on evidence that, in the court's words, might suggest "that Mr. Borja was not an innocent third party who just happened to learn of the alleged bribery scheme but rather was a long-time associate of Chevron whom Chevron would pay for any favorable testimony." Ecuador points to an audiotape, recorded by an old friend of Borja's, in which Borja repeatedly boasted that Chevron promised him a future reward for sharing his judicial videotapes. In one passage, Borja bragged to his friend: "[Before I give them the things they said, 'Look, we can't give you money because you can't go and buy evidence as if they sold it in the supermarket. . . . So they said, instead of giving you money, we can give you other things. . . . What we can do is. . . . You're our business partner, you get it? Now, that little word means a lot of things, right? . . . I mean it's a brass ring this big, brother."
Ecuador's lawyers at Winston & Strawn argue that deposing Borja will help them to defend the treaty arbitration filed by Chevron against Ecuador in the Permanent Court of Arbitration, where Chevron seeks a declaration that the company is not liable for damages in Ecuador, and an order that Ecuador indemnify Chevron.
Chevron denies the allegation that it promised to reward Borja for sharing his videos. Spokesperson Kent Robertson adds: "They've offered no evidence of any kind that casts any doubt on the authenticity of the videos or explains the judge's improper participation in the meetings. [T]heir 'investigation' [only] confirms that Chevron had no involvement whatsoever in planning or recording the meetings."
As for the plaintiffs' damages recommendation, Chevron rejects it wholesale. In Chevron's view, Judge Ordonez acted without authority in closing the evidence phase of the trial, because Chevron has asked him to recuse himself for declining to examine its new allegations arising out of U.S. discovery, including purported evidence that plaintiffs ghostwrote Cabrera's report. (The plaintiffs maintain that they violated no Ecuadorian law and that Chevron also engaged in ex parte contacts.) Ecuadorian law bars judges from ruling while recusal motions are pending. Ideally, Chevron would like the close of evidence to be delayed until it can complete its U.S. discovery.
Chevron's lawyers at Gibson, Dunn & Crutcher; Jones Day; and King & Spalding have long characterized the Ecuadorian court as politicized and biased, which plaintiffs deny. In the event that plaintiffs obtain a judgment against Chevron and seek to collect it, the company will continue to press its evidence of fraud in the treaty arbitration, and in enforcement proceedings. A judge need only have "substantial doubt about the integrity of the court" to refuse enforcement under the U.S. Uniform Foreign-Country Money Judgments Recognition Act. (The actual standard will depend on where plaintiffs try to collect.)
But as last week's developments make plain, plaintiffs are not content to play defense, and after 17 years, they are not giving up. The Ecuadorian court estimated in June that it would be ready to rule some time between February and April 2011. Get ready for year 18 of the world's biggest dispute.
September 22, 2010 - QUITO: Ecuador looks to its own people in the battle against climate change (ECUADOR)
Source: The Guardian
Ecuador's Yasuni park where, as part of the climate change battle, oil will be left in the ground if donors pay half its value.
We left thirsty Peru and have reached Quito in Ecuador on the great Oxfam/Guardian Andean climate journey. First stop is to meet the government and community leaders of a state that stretches from the Pacific coast, over the mountains, and deep into the Amazon forest.
The environment minister is the redoubtable Maria Fernanda Espinoza, who is grappling with the contradictions of having a revolutionary new constitution that guarantees the rights of nature and all living entities, yet depends on vast oil reserves. She is adamant that Ecuador wants to find ways to get out of the petrol economy and invest in renewables to avoid climate change.
One plan is to guarantee to leave nearly one billion barrels of oil – nearly 20% of the country's reserves – in the ground if rich countries and individuals give them $3.6bn, half the oil's value. The money from the Yasuni project would go to a UN-run fund to pay for national park conservation, as well as health and education. It would save nearly 400m tonnes of emissions and is being hailed as an innovative climate change solution.
Hmmm. No one knows if this will catch on – even as we meet the minister, the press is reporting that the plan's biggest western backer, Germany, is having second thoughts – but the radical government led by Rafael Correa will push it at the global climate change talks in Mexico in November.
(Less remarkable, but something I have never seen before in 20 years of interviewing politicians, is the way Espinoza gets a senior civil servant to hold, brush and lovingly arrange her long brown hair throughout the hour-long interview. It's a cross between a hairdresing salon and a Vanity Fair photo-shoot.)
The leaders of the country's powerful, 12 million-strong indigenous peoples are also image conscious. Delfin Tenesaca, who runs the largest group, Ecuarunari, gives us an audience in front of a giant scarlet banner proclaiming human, water and other rights. The group sees climate change as an urgent social issue that can only be addressed by communities organising themselves.
Even though Ecuador is right on the equator and is somewhat protected from climate change by the vast Amazon rainforest, its glaciers are melting fast and rainfall is decreasing steadily.
For the indigenous peoples, the "Pachamama" - or Mother Earth - is ill. We are going through a period of "vaciacad", or melancholy, and we need to embrace "Sumak Kawsay", the good way of living to restire Mother Earth's balance, says Tenesaca.
Interpreted, that means the world must abandon the neo-liberal policies that favour the rich. It must redistribute land, make the right to water universal and protect biodiversity. Any other way guarantees climate change, poverty and inequality.
But the indigenous peoples' relationship with government is complex. The new constitution gives them far more than what they had before, but they bitterly complain that the state has not passed the laws needed to make the constitution workable.
Indigenous peoples throughout Latin America are gaining confidence. They are at the forefront of the new political philosophies emerging from Bolivia to Venezuela. Climate change – specifically the right to water – is central to the political revolution taking place.
One of the architects of the Ecuadorean constitition is Humerto Cholango, the man tipped to lead all Andean indigenous peoples.
This intellectual onion grower, a friend of Bolivia's radical president Evo Morales, shares four hectares with his eight brothers on the slopes of the ice-capped volcano Coyambe. He has led a remarkable struggle to protect and provide water for thousands of small farmers.
They have, by consensus and without the help of the central or local state, redistributed land and water, conserved the high pastures of the mountain (which acts as a giant sponge), increased water supply by 10%, and repaired thousands of miles of water channel. It is a model of "Sumak Kawsay". If this had been a World Bank project, it would have cost billions and probably would not have succeeded.
What is impressive is that the indigenous peoples of Ecuador are proactive in adapting society to climate change. Government now gets its ideas from them.
Mexico
September 22, 2010 - MEXICO CITY: Access to some Mexico oil wells blocked by floods (MEXICO)
Source: News Agency
Mexico's state-run oil company Pemex said on Wednesday that flooding in the wake of Hurricane Karl last weekend has blocked access to some of its installations but production was not affected.
The hurricane raked along Mexico's Gulf coast hitting oil producing regions inland in the southern state of Tabasco.
The entrance to several Tabasco oil fields were blocked and four oil wells had been flooded, Pemex [PEMX.UL] said in a statement.
"Despite some problems at the installations, no wells have had to stop production," the statement said.
On Tuesday, the company reestablished operations at 14 offshore oil wells evacuated because of the hurricane.
A majority of Mexico's 2.55 million-barrel-per-day oil production comes from offshore wells.
September 21, 2010 - MEXICO CITY: Carbon deal for Eoliatec wind farms to boost IRR - Santander -(MEXICO)
Source: Business News Americas
The deal to sell 4.57Mt of carbon credits (CERs) from Spanish firm Eolia Renovables de Inversiones' two Mexican wind projects will provide a "substantial boost" to IRR and marks a new possible model for financing renewable projects in Mexico, Justin Bryon, director of Asset & Capital Structuring for Santander Mexico, told BNamericas.
Santander acted as mandated lead arranger in the sale of the carbon credits to German development bank KfW and Nordic finance institution Nefco for delivery between 2012 and 2020.
"This means Santander can not only do project finance, but can also do this carbon monetization. The impact on the promoter is that we push up the yield because the asset itself is denominated in euros. So we finance in euros and the cost of funding in euros is less than half the cost of funding in pesos," Bryon said.
"That's what gives the boost to the return on investment to the shareholder, and can often make the difference between doing a wind farm in Mexico or not," Bryon said.
Local Eolia subsidiaries Eoliatec del Pacifico and Eoliatec del Istmo are developing the two projects in Mexico's Tehuantepec Isthmus.
They will have a combined 324MW capacity when completed in August 2012, Santander said in a statement.
The first wind turbines are expected to start operations in August 2011.
On September 15, Eolia used the proceeds from the sale of the CERs to pay state power company CFE for transmission rights, Bryon said.
Private generators reserved 1.49GW of capacity with CFE under the open season model and committed to pay some 80% of the US$209mn cost, BNamericas reported previously.
The sale of the CERs to KfW and Nefco was funded by KfW itself, Mexican export development bank Bancomext and the European Investment Bank.
The size of the deal is at the very least notable, but Bryon said more significant is the fact that the CERs correspond to the period after expiration of the Kyoto Protocol, for which there is not yet a replacement agreement.
"It's a huge deal. The average deal size is a couple hundred thousand tonnes. This is 10 times that. [...] I have seen deals from China where the amount of tonnes is greater, but not post-Kyoto, because China is not in that market yet," he said.
The purchase of post-Kyoto carbon credits by Germany's KfW and Nefco - which was established by Denmark, Finland, Iceland, Norway and Sweden - is thus a positive signal in the run-up to the United Nations Climate Change Conference (COP-16) to be held in Cancun later this year.
"The fact that governments are buying substantial tonnage like this is revealing for me. It shows they have faith in the carbon market and gives me great reassurance as they have votes in Cancun," Bryon said.
September 22, 2010 - MEXICO CITY: BP and Shell show interest in new oil contracts (MEXICO)
Source: UPSTREAMONLINE
Anglo-Dutch Shell and BP are interested in new oil contracts in Mexico, local reports said, citing the UK’s ambassador to the Latin America country.
News wires 21 September 2010 20:52 GMT
The two companies want to take part in performance-based contracts being offered by state-owned oil producer Pemex, Mexico City-based newspaper Reforma reported today, citing ambassador Judith McGregor.
Pemex is looking to hire foreign oil companies to explore in the Gulf of Mexico as it seeks to arrest a five-year output decline, Bloomberg reported.
Peru
Septemebr 22, 2010 - LIMA: Camisea Accepts Deal (PERU)
Source: Poder 360
Camisea Accepts Deal Camisea consortium agrees to devote Lot 88 gas reserves to the domestic market
The state firm Perupetro reported that the Camisea consortium agreed to devote Lot 88 gas reserves to the internal market. The business conglomerate will only use Lot 56 reserves for gas exports as part of the deal. The renegotiation of the Camisea contract was accomplished after inhabitants of the La Convencion province in Cusco were massively opposed to the exportation of the fuel
Septemebr 22, 2010 - LIMA: Peru Nat Gas Export Limit Talks Not Finished - Consortium (PERU)
Source: The Wall Street Journal
Talks with the Peruvian government over limiting natural gas exports from one production block are at a "preliminary" stage, said a statement from the Camisea gas production consortium.
The Wednesday statement follows reports the consortium had agreed to limit natural gas exports from Lot 88 of Peru's main Camisea fields, making more gas available to the domestic market.
This year, following widespread protests over Peru's gas exports which started in June, the government passed laws aimed at keeping more gas from Lot 88 for domestic use and raising natural gas royalty payments.
On Tuesday Daniel Saba, president of the state agency Perupetro which is responsible for renegotiating both export limits and royalty payments, told state newspaper El Peruano an agreement had been reached over Lot 88. Saba said the formal contract modifications would be made during the rest of the year.
Media reports Wednesday, however, also saw Saba rowing back, saying negotiations over Lot 88 had not yet concluded.
Wednesday's statement from the consortium said current gas exports--via another consortium called Peru LNG--derive only from Lot 56 and said there was a no-export agreement over Lot 88 until 2014.
The consortium also said it was spending over $4 billion to develop Lots 88 and 56 of the Camisea gas fields.
The Camisea consortium is led by Pluspetrol Peru Corp. SA. The U.S.'s Hunt Oil Co. and Spain's Repsol YPF SA (REP, REP.MC) are members of both the Camisea and Peru LNG consortiums.
Uruguay
September 22, 2010 - MONTEVIDEO: ANP to invest US$200mn over next five years - (URUGUAY)
Source: News Americas
Uruguay's national port authority ANP plans to invest US$200mn during the 2011-15 period, an official from the economy and finance ministry told BNamericas.
The authority's proposed investment plan has been submitted to congress and is expected to be approved by legislators by December 31.
The plan includes construction of Montevideo port's Muelle C dock, as well as dredging projects and ongoing work on a new fishing terminal in Montevideo's Capurro area.
ANP will also continue to promote the construction of a deepwater port in Rocha department's La Paloma district, which is expected to be built under a concession contract.
The authority expects a number of other projects to be carried out through public-private partnerships, the official said.
Venezuela
September 21, 2010 - CARACAS: Venezuela invests in large hydro to meet power demand (VENEZUELA)
Source: Power Gen Worldwide
The Venezuelan government's Ministry of Planning and Finances has approved the construction of four hydroelectric projects, representing a total cost of $5.5m.
The projects will be financed by a fund in which the Chinese government has contributed.
One of the projects is the El Chorrin hydroelectric power plant, which is due to be built in the Venezuelan Guayana, one of the world’s last untouched natural habitats. The hydropower station will generate 1000 MW of power, according a report in El Nacional.
Up to now, the Venezuelan government has been reticent in the construction of new hydro projects because of their perceived impact on the environment.
However, the necessity to satisfy the population’s electricity demand now makes such a move a necessity.
For more Hydroelectric news.
September 21, 2010 - CARACAS: Venezuela guards power grid to buffer elections (VENEZUELA)
Source: Arab News
The government said Monday it is taking steps designed to prevent blackouts that have been hitting several regions across Venezuela, so there won't be interruptions during congressional elections this weekend.
Energy Minister Ali Rodriguez said the plan "involves the presence of workers and military personnel" at all major power plants.
"The objective is not only avoiding acts of sabotage, but also preventing any failure that could occur within the electricity system," he said.
In addition, polling stations will be equipped with diesel power generators in case of emergencies, Rodriguez said.
Several regions, including Venezuela's capital, have been hit by power outages in recent weeks.
Government officials blame the blackouts on sabotage, accusing President Hugo Chavez's opponents of trying to damage the power grid as a way to hurt the popularity of the socialist leader and his allies ahead of the vote Sunday.
Opposition leaders reject the allegations, saying the power failures are due to problems in the system.
Aixa Lopez, director of the Committee for People Affected by Power Outages, an opposition-allied group that tracks blackouts and proposes solutions, said the problem is government inefficiency and lack of investment.
"The real cause of the blackouts is that the government has not made the necessary investment and maintenance," Lopez said.
Throughout the first half of 2010, Venezuela experienced recurring power outages across the country as a lack of rainfall caused water shortages and starved the hydroelectric dams that produce about three-fourths of the South American country's electricity.
Chavez has said the water level at the Guri dam, the country's largest, returned to normal levels after the rainy season began in June.
"At the beginning, government authorities told us that the problem was caused by lack of rain, but Guri is full now and the only excuse they can come up with is purported sabotage," Lopez said during a telephone interview.
Blackouts have been occurring in the capital as well as six of Venezuela's 23 states, including Nueva Esparta, Falcon, Anzoategui, Merida and Tachira, Lopez said.
Lopez said she doubted the government is capable of guaranteeing an uninterrupted electricity supply across the entire country during the elections, and she warned that any power outages Sept. 26 could lead to protests and violent conflict between political rivals.
Repeating previous accusations by Chavez's government, the energy minister told the state-run AVN news agency that recent blackouts were "the result of sabotage." Rodriguez added that employees of state power companies could be involved.
September 22, 2010 - CARACAS: Authorities to strengthen security measures to protect Venezuela's power grid (VENEZUELA)
Source: El Universal
About 300 power generation plants for polling centers in Venezuela
A total of 266 power generation plants for parliament election have been installed
Election 2010 Members of the Venezuelan Electricity Joint Chiefs of Staff agreed, in a regular meeting, to strengthen security measures in Venezuelan thermal and hydroelectric power plants as well as distribution and transmission networks throughout the country, four days ahead of the parliament election.
Joaquín Osorio, the National Commissioner for Distribution and Marketing in the electricity sector, said that in addition to the security staff of the National Electric Corporation (Corpoelec) and the National Bolivarian Armed Forces troops, members of the Socialist Workers Front "Braulio Criollo" will participate in surveillance and monitoring of the power generation system.
Osorio added that about 300 thermal power plants have been installed in the polling centers and in the regional headquarters of the National Electoral Council (CNE). So far, 75 percent of power generation plants have been installed to ensure the performance of September 26 parliament poll.
Meanwhile, Keperin Bilbao, the Vice President of Distribution and Marketing, state-run power utility Cadafe, reported through a press release that 200 workers will provide technical and operational support for the power plants purchased by the CNE
September 22, 2010 - CARACAS: Venezuela's new wave of social projects (VENEZUELA)
Source: News Agency
- Venezuelan President Hugo Chavez has launched new social programs ahead of Sunday's legislative elections, in which his Socialist Party will try to keep its clear majority in the 165-seat National Assembly. The 56-year-old leader has reinforced his state-sponsored health and nutrition programs with new ones meant to distribute low-cost cars and sell household electronic goods like washing machines and televisions at a discount.
One program even helps low-income people see the country's natural wonders through subsidized tourism.
Sunday's vote is seen as a precursor to a 2012 presidential election, when Chavez is expected to seek another term to extend his "Bolivarian revolution" in the OPEC member country.
Much is at stake for the former paratrooper, who first won power in 1998 but has seen his popularity fall due to an increase in crime, a nagging recession and, at about 30 percent, the highest inflation rate in the Americas.
Here are some details of Chavez's new social programs:
* The "Good Life" credit card, which allows consumers to buy food and other items including electronic household goods in state-run stores offering favorable financing conditions.
* The state-subsidized "Popular Tourism" plan that lets poor Venezuelans visit sites such as the breathtaking Angel Falls waterfall, the Los Roques islands, until now a playground for the yachting set, and other tourist destinations that would otherwise be out of reach financially.
* A program for distributing cars that run on natural gas and carry a guarantee of free maintenance. State oil company PDVSA loses hundreds of millions of dollars per year selling gasoline on the domestic market at the lowest prices in the world.
* Supermarkets and megastores, once operated by private companies that were taken over by the state in January, are offering subsidized food. The stores are meant to back up nutritional programs which, along with free medical care provided by 20,000 Cuban doctors sent to Venezuela in exchange for cheap petroleum, have become a mainstay of the government.
* Sale of imported electronic devices at below-market prices. The program is made possible by a deal with China in which Venezuela's government buys goods at the official exchange rate, rather than the black market rate, allowing it to sell cheaply to consumers.
September 22, 2010 - CARACAS: Declining production will continue to hit Pdvsa (VENEZUELA)
Source: El Universal
Exports of Venezuela’s state-run steel and aluminum companies declined 45 percent last year Economy Venezuela's executive office submitted to the Securities and Exchange Commission (SEC) the 2009 annual report in which the government recognized that state-run oil company Petróleos de Venezuela (Pdvsa) will continue being affected by declining production.
The report, which was prepared by the Ministry of Planning and Finance, includes Pdvsa's consolidated results, characterized by falling revenues, lower earnings, and a growing debt. The report conceded that the oil industry was hit by lower production and a decline in oil prices.
Financial authorities acknowledged that production and expenditures have been key factors in the financial situation of the oil industry. They added that these factors will continue to hit the industry in the future.
The annual reports highlights that Pdvsa's oil contractors have filed complaints against the state-run oil company over late payments.
The Ministry of Finance also reported the economic situation of Guayana's basic industries (steel, aluminum), where output has tumbled due to the energy crisis.
Steel production fell 31 percent in 2009, whereas aluminum output decreased by 6 percent and alumina dropped 14 percent. Total exports of such commodities declined 45 percent last year, the report added.
September 22, 2010 - CARACAS: Russia to supply Venezuela with 10 oil tankers: report (VENEZUELA)
PETROLEUMWORLD
Russia will supply Venezuela with 10 crude oil tankers for 700 million dollars (535 million euros), a spokesman for Russian shipbuilder OSK was quoted Wednesday as saying by RIA Novosti news agency.
"The agreement is for the supply of 10 tankers to Venezuela by 2016," said Igor Ryabov of United Shipbuilding Corporation, or OSK in Russian.
Seven of the tankers will be built in Russia and three in South Korea, where OSK has a joint venture agreement with Daewoo.
Venezuelan President Hugo Chavez and Russian Prime Minister Vladimir Putin signed a series of defence and energy deals in April including for the supply of oil tankers and jets for Venezuela's air force.
Regional
September 22, 2010 - India seeks energy security with Latin American interests - Regional
Source: Business News Americas
ONGC Videsh, the international unit of India's state oil behemoth ONGC, is seeking to shore up national energy security though E&P operations in Latin America, country manager for Colombia R K Khanna told BNamericas.
"ONGC goes overseas for many reasons. But one of the main reasons is energy security. We are the national oil company in India and besides exploring in India, we pursue a lot overseas," Khanna said. "ONGC right now is the only Indian or South Asian oil and gas company in Latin America."
In Colombia, the company has interests in five exploration blocks, three of which are offshore.
"Chevron and Ecopetrol have found gas offshore Colombia," Khanna said. "And yes, we hope that something positive will happen for us also."
ONGC Videsh has extensive offshore expertise with its Mumbai High offshore platform, which accounts for half of yearly domestic oil production in India.
Besides exploration, the company also has a stake in Colombian producer Mansarovar Energy.
Regionally, in addition to interests in blocks in Venezuela, Brazil and Cuba, the company is also looking at Peru and Ecuador, according to Khanna.
The full interview with Khanna will appear in an upcoming Oil & Gas Perspectives, for subscribers only.
Around the World
September 22, 2010 - China's Aug. oil demand Up 7.6% from year ago at 8.4 mil. b/d
Source: PETROLEUMWORLD
China consumed an estimated 35.54 million metric tons (mt) of oil in August, 7.6% higher than the corresponding month of last year, but a continuing decline from June's all-time peak, according to a just-released Platts analysis of official data from the People's Republic of China.
The August apparent* oil demand equates to an average 8.40 million barrels per day (b/d), compared with 8.47 million b/d in July and 8.97 million b/d in June this year.
Meanwhile, for the first eight months of 2010, China's apparent oil demand was 282.17 million mt or an average of 8.51 million b/d, up 10.9% from the corresponding period of 2009, Platts data showed.
Chinese refiners processed a total 34.73 million mt or an average 8.21 million b/d of crude oil in August, up 6.7% from a year ago, but down 1.6% from July, according to data released earlier in the month by China's National Bureau of Statistics. Crude imports jumped 13% from a year ago to 20.9 million mt, or about 4.92 million b/d.
"The growth in China's monthly implied oil demand has dropped to single digits since May from the 13% to 18% range seen in the first four months of this year. While this could be partly explained by a low comparison base in the early part of 2009 when the Chinese economy briefly stalled, one cannot ignore the month-on-month decline since July," said Vandana Hari, Asia editorial director at Platts.
"At first glance, the decline in Chinese oil consumption from June's record high of 8.97 million b/d seems counter-intuitive in the face of official data showing acceleration in the country's industrial output, retail sales, and imports in August. But that suggests the current trough in oil demand might be short-lived," Hari said.
Meanwhile, China's net refined product imports surged nearly 76% to 0.81 million mt in August from 0.46 million mt a year earlier. On a month-to-month basis, August imports surpassed July's 0.54 million mt as product exports dropped more sharply than imports.
