Argentina
September 27th 2010 - FALKLANDS/MALVINAS ISLANDS Falklands: Desire begins drilling second exploration well, Rachel 14/15-1 (ARGENTINA)
Source: Mercopress
September 27th 2010 - FALKLANDS/MALVINAS ISLANDS Falklands: Desire begins drilling second exploration well, Rachel 14/15-1 (ARGENTINA)
Source: Mercopress
Desire Petroleum (AIM:DES) the first oil and gas exploration company to contract a rig and begin the current round of drilling in the Falkland Islands announced Monday the spudding of its second exploration well, Rachel 14/15-1.
In an official statement the company which is wholly focused on the North Falkland Basin said that “the Rachel 14/15-1 exploration well was spudded at 15:45 (BST) on 27 September 2010”.
The Rachel prospect is located in Tranche D, south of Sea Lion prospect and has an estimated target depth of 2,850 metres. Drilling operations are expected to take approximately 35 days.
So far in the current round Desire discovered natural gas in two zones of its Liz well and Rockhopper Exploration struck oil at its Sea Lion Prospect, with an initial flow of 2.000 bopd, in spite of ‘technical constraints’ encountered to gauge volumes.
“In order to give ourselves time to evaluate the results of the Rachel well we are most likely to drill the Dawn/Jacinta prospect following the Rachel well. Despite the disappointing (Rockhopper) Ernest well result the Dawn/Jacinta prospect continues to excite us” said Desire in a recent half year report to shareholders.
“Since the Sea Lion discovery, Desire’s geo-science effort has concentrated on identifying similar prospects for early drilling. In addition to the already recognised Rachel, Anna and Ninky prospects an exciting new prospect named Elaine has been identified”.
Commenting on the June 30 mid year balance Desire chairman Stephen Phipps said that the confirmation of oil and gas in the NFB has clearly significantly de-risked the rest of the drilling campaign, “we now enter an exciting period of drilling activity which may see us drilling up to four wells back to back.”
Last week Desire announced Friday it had successfully placed 16,294,600 shares at 140 pence each raising £22.8 million before expenses. The funds will be predominantly used to acquire and process further 3D seismic over the Desire acreage on the east flank of NFB, in Tranches D and F.
The Board of Desire currently expects that the seismic programme will begin in December 2010.
Desire Petroleum director Ian Duncan and chairman Stephen Phipps plan to visit the Falklands at the beginning of October.
In an official statement the company which is wholly focused on the North Falkland Basin said that “the Rachel 14/15-1 exploration well was spudded at 15:45 (BST) on 27 September 2010”.
The Rachel prospect is located in Tranche D, south of Sea Lion prospect and has an estimated target depth of 2,850 metres. Drilling operations are expected to take approximately 35 days.
So far in the current round Desire discovered natural gas in two zones of its Liz well and Rockhopper Exploration struck oil at its Sea Lion Prospect, with an initial flow of 2.000 bopd, in spite of ‘technical constraints’ encountered to gauge volumes.
“In order to give ourselves time to evaluate the results of the Rachel well we are most likely to drill the Dawn/Jacinta prospect following the Rachel well. Despite the disappointing (Rockhopper) Ernest well result the Dawn/Jacinta prospect continues to excite us” said Desire in a recent half year report to shareholders.
“Since the Sea Lion discovery, Desire’s geo-science effort has concentrated on identifying similar prospects for early drilling. In addition to the already recognised Rachel, Anna and Ninky prospects an exciting new prospect named Elaine has been identified”.
Commenting on the June 30 mid year balance Desire chairman Stephen Phipps said that the confirmation of oil and gas in the NFB has clearly significantly de-risked the rest of the drilling campaign, “we now enter an exciting period of drilling activity which may see us drilling up to four wells back to back.”
Last week Desire announced Friday it had successfully placed 16,294,600 shares at 140 pence each raising £22.8 million before expenses. The funds will be predominantly used to acquire and process further 3D seismic over the Desire acreage on the east flank of NFB, in Tranches D and F.
The Board of Desire currently expects that the seismic programme will begin in December 2010.
Desire Petroleum director Ian Duncan and chairman Stephen Phipps plan to visit the Falklands at the beginning of October.
September 25, 2010 - FALKLANDS/MALVINAS ISLANDS: Cristina blasts UK and UN Security Council for lack of progress in Falklands/Malvinas (ARGENTINA)
Source: Mercopress
Addressing the United Nations General Assembly on Friday, President Cristina Fernandez de Kirchner criticized the British government for continuing to ignore Argentina's request for sovereignty talks over the Falklands/Malvinas Islands.
“Once again we have come to claim our sovereign rights over the Malvinas Islands. It’s not a historic claim but an absolutely present-time claim”, added Mrs Kirchner who blasted the UK for systematically refusing to comply with “the resolutions of this organism (General Assembly) which calls on all of us to begin sovereignty talks”.
“That country (UK) is making unilateral decisions on hydrocarbons exploitation which means the plundering of natural resources that do not belong to her”, emphasized Mrs. Kirchner. “The UK is responsible for any ecological catastrophe, just as it was for the British Petroleum oil spill” she warned.
The Malvinas' conflict served as the trigger for the Argentine President to heavily criticize the United Nations Security Council for ”it has lost its power and it is not working taking into account the jeopardy the world is currently facing.“ ”We are no longer in a bipolar world,“ she added.
”Situations and conflicts such as the Malvinas one are clear examples of the fact the Security Council is not working properly and is not preserving peace and security“ affirmed Mrs. Kirchner.
The Argentine president also renewed her claim for the extradition of two high-ranking Iranian officials accused by an Argentine court of being involved in the 1994 Buenos Aires AMIA Jewish Centre bombing, urging the Islamic Republic to jointly pick a neutral country in which they can be taken to trial.
”Even though my country leads in human rights defence and justice, our justice system cannot judge and sentence anyone who's not present. Therefore, we demand their extradition“.
Mrs. Kirchner blasted the Teheran regime saying that she was certain that even though this was her fourth public request for their extradition, this would not yield any results. ”I know it is an evident fact there will be no outcome,“ she assured.
”Therefore, if the Iranian authorities do not trust the Argentina legal system, I ask them to join us into finding a third party, a third country in which those officials would be tried in front of several UN delegates, in order to take those responsible for this horrible attack to court,“ she said.
She used this ”fourth public claim“ as a way of highlighting the ones that were performed on 2007, 2008 and 2009. ”I'm not after guilty people; I'm just looking for justice in the AMIA case investigation. If someone has committed a crime, he or she should be punished,“ she added.
”We should end with neutrality excuses“ Mrs Kirchner emphasized. ”We do not want an impartial trial, but a trial where we can try those who are accused for this horrible attack we suffered back in 1994,“ she concluded the matter.
At the start of her speech at the UN Mrs. Kirchner dealt with figures and statistics regarding her administration, which she highly praised for ”helping Argentina come out of the 2001 crisis.” Both her and her husbands (Nestor Kirchner) governments were the core of the words as soon as she began speaking, stating that “developing countries such as Argentina are currently receiving the impact of the world's economic crisis and are supporting the global economic crisis.”
“During the last eight years, Argentina achieved the greatest economy growth of its 200 years of history”, she said adding that ”we were able to service public debt in a way that had never been recorded before“.
As regards the debt Mrs. Kirchner stated that Argentina negotiated 93% of its debt and, “thanks to the implemented countercyclical measures that were drawn up in 2008 and 2009, the economy grew 9% during this past year”.
Mrs Kirchner assured that the country “managed the reserves with intelligence” when she decided to use them to service public debt. “It was irrational for the country to be in the red, and that is why I decided to use the Central Bank reserves.”
To conclude with figures and statistics, Mrs. Kirchner assured “multilateral credit bodies have to face the fact they need a strong reform, for they failed to maintain a stable economy at a global level.”
Later on the Argentine president tackled several issues that accounted for highly controversial topics. She entered deeply into the Middle East conflict by assuring “it was great news to see that dialogue between Israel and Palestine was resumed.” And added: “I believe we all wish for Palestine to be sitting in the following's United Nations General Assembly,” she stressed, showing her satisfaction on the matter.
Mrs. Kirchner finished her speech by underlining: “It is relevant to be assured that the notions of security and peace are no longer associated with military issues, but with politics, freedom, equity and equality.”
“Once again we have come to claim our sovereign rights over the Malvinas Islands. It’s not a historic claim but an absolutely present-time claim”, added Mrs Kirchner who blasted the UK for systematically refusing to comply with “the resolutions of this organism (General Assembly) which calls on all of us to begin sovereignty talks”.
“That country (UK) is making unilateral decisions on hydrocarbons exploitation which means the plundering of natural resources that do not belong to her”, emphasized Mrs. Kirchner. “The UK is responsible for any ecological catastrophe, just as it was for the British Petroleum oil spill” she warned.
The Malvinas' conflict served as the trigger for the Argentine President to heavily criticize the United Nations Security Council for ”it has lost its power and it is not working taking into account the jeopardy the world is currently facing.“ ”We are no longer in a bipolar world,“ she added.
”Situations and conflicts such as the Malvinas one are clear examples of the fact the Security Council is not working properly and is not preserving peace and security“ affirmed Mrs. Kirchner.
The Argentine president also renewed her claim for the extradition of two high-ranking Iranian officials accused by an Argentine court of being involved in the 1994 Buenos Aires AMIA Jewish Centre bombing, urging the Islamic Republic to jointly pick a neutral country in which they can be taken to trial.
”Even though my country leads in human rights defence and justice, our justice system cannot judge and sentence anyone who's not present. Therefore, we demand their extradition“.
Mrs. Kirchner blasted the Teheran regime saying that she was certain that even though this was her fourth public request for their extradition, this would not yield any results. ”I know it is an evident fact there will be no outcome,“ she assured.
”Therefore, if the Iranian authorities do not trust the Argentina legal system, I ask them to join us into finding a third party, a third country in which those officials would be tried in front of several UN delegates, in order to take those responsible for this horrible attack to court,“ she said.
She used this ”fourth public claim“ as a way of highlighting the ones that were performed on 2007, 2008 and 2009. ”I'm not after guilty people; I'm just looking for justice in the AMIA case investigation. If someone has committed a crime, he or she should be punished,“ she added.
”We should end with neutrality excuses“ Mrs Kirchner emphasized. ”We do not want an impartial trial, but a trial where we can try those who are accused for this horrible attack we suffered back in 1994,“ she concluded the matter.
At the start of her speech at the UN Mrs. Kirchner dealt with figures and statistics regarding her administration, which she highly praised for ”helping Argentina come out of the 2001 crisis.” Both her and her husbands (Nestor Kirchner) governments were the core of the words as soon as she began speaking, stating that “developing countries such as Argentina are currently receiving the impact of the world's economic crisis and are supporting the global economic crisis.”
“During the last eight years, Argentina achieved the greatest economy growth of its 200 years of history”, she said adding that ”we were able to service public debt in a way that had never been recorded before“.
As regards the debt Mrs. Kirchner stated that Argentina negotiated 93% of its debt and, “thanks to the implemented countercyclical measures that were drawn up in 2008 and 2009, the economy grew 9% during this past year”.
Mrs Kirchner assured that the country “managed the reserves with intelligence” when she decided to use them to service public debt. “It was irrational for the country to be in the red, and that is why I decided to use the Central Bank reserves.”
To conclude with figures and statistics, Mrs. Kirchner assured “multilateral credit bodies have to face the fact they need a strong reform, for they failed to maintain a stable economy at a global level.”
Later on the Argentine president tackled several issues that accounted for highly controversial topics. She entered deeply into the Middle East conflict by assuring “it was great news to see that dialogue between Israel and Palestine was resumed.” And added: “I believe we all wish for Palestine to be sitting in the following's United Nations General Assembly,” she stressed, showing her satisfaction on the matter.
Mrs. Kirchner finished her speech by underlining: “It is relevant to be assured that the notions of security and peace are no longer associated with military issues, but with politics, freedom, equity and equality.”
September 25th 2010 - FALKLANDS/MALVINAS ISLANDS: Falklands Desire raises an extra £ 22.8 million for further oil seismic surveying (ARGENTINA)
Source: Mercopress
Source: Mercopress
Desire Petroleum (AIM:DES), one of the Falkland Islands oil exploration companies announced Friday it had successfully placed 16,294,600 shares at 140 pence each raising £22.8 million before expenses.
According to the company’s release the funds will be predominantly used to acquire and process further 3D seismic over the Desire acreage on the east flank of the North Falkland Basin, NFB, in Tranches D and F.
Following the Sea Lion oil discovery by Rockhopper Exploration, Desire has concentrated on identifying prospects in the same play type as Sea Lion and has outlined a fan sandstone play fairway in the eastern flank.
These fan sandstones can only be fully identified on 3D data and currently Desire has 3D coverage over only half of this fairway on its acreage.
“Desire believes that it is essential that it acquires and processes new 3D seismic data as quickly as possible in order to fully understand the potential of this play”.
Tenders for a 3D seismic survey have been received and Desire intends to award a contract for the acquisition and processing of the survey in the near future. In addition, discussions are underway with other NFB oil operators regarding a joint seismic program that could go some way to mitigate the significant cost of the mobilisation/demobilisation of a seismic vessel to Falkland waters.
The Board of Desire currently expects that the seismic programme will begin in December 2010.
Now that Rockhopper has concluded the successful flow test on the Sea Lion discovery, the Ocean Guardian drilling rig will revert to Desire to drill a number of its prospects the first of which will be drilling the Rachel prospect.
According to the company’s release the funds will be predominantly used to acquire and process further 3D seismic over the Desire acreage on the east flank of the North Falkland Basin, NFB, in Tranches D and F.
Following the Sea Lion oil discovery by Rockhopper Exploration, Desire has concentrated on identifying prospects in the same play type as Sea Lion and has outlined a fan sandstone play fairway in the eastern flank.
These fan sandstones can only be fully identified on 3D data and currently Desire has 3D coverage over only half of this fairway on its acreage.
“Desire believes that it is essential that it acquires and processes new 3D seismic data as quickly as possible in order to fully understand the potential of this play”.
Tenders for a 3D seismic survey have been received and Desire intends to award a contract for the acquisition and processing of the survey in the near future. In addition, discussions are underway with other NFB oil operators regarding a joint seismic program that could go some way to mitigate the significant cost of the mobilisation/demobilisation of a seismic vessel to Falkland waters.
The Board of Desire currently expects that the seismic programme will begin in December 2010.
Now that Rockhopper has concluded the successful flow test on the Sea Lion discovery, the Ocean Guardian drilling rig will revert to Desire to drill a number of its prospects the first of which will be drilling the Rachel prospect.
September 25, 2010 - FALKLANDS/MALVINAS ISLANDS: Technical constraints limit Falklands’ oil well flow test to 2.000 bopd (ARGENTINA)
Source: Mercopress
Source: Mercopress
Rockhopper Exploration said that during the testing of its Sea Lion well in the Falkland Islands, problems limited the amount of oil extracted to just an average of 2000 barrels per day (bopd). Otherwise, it could have produced sustained rates of at least double that, at 4000 bopd, “without these constraints”.
In a statement released on Friday, Rockhopper gave descriptions of the encountered problems, saying: “Rockhopper believes that the flow rate was inhibited by incomplete perforation, waxing of the tubing string above 800 metres, increased viscosity of the oil as it cooled in the upper part of the test string and a lack of specialist equipment.”
“As such, the Company estimates that the well could have flowed at approximately 4,000 bopd without these constraints”.
They added: “Rockhopper also believes that, with a more optimal well location and horizontal well completions, significantly higher flow rates could be achieved from future production wells.”
Rockhopper was the first company of the several operating (and drilling) in Falklands’ waters, to state that the Sea Lion prospects results were “commercially viable”. However the latest update, although optimistic, is a reminder of the technical difficulties faced by oil companies in the South Atlantic.
Following the release of the update Rockhopper shares soared as much as 9.5% in London. The shares have accumulated an increase of 1.332% since the first announcement on the oil discovery in May.
The other companies with Falklands’ government licences to explore for oil are Desire Petroleum, BHP Billion with Falkland Oil & Gas Ltd, Borders & Southern Petroleum and Argos Resources. Desire, Rockhopper and FOGL have drilled exploratory wells with the “Ocean Guardian” rig in Falklands waters since last February.
In a statement released on Friday, Rockhopper gave descriptions of the encountered problems, saying: “Rockhopper believes that the flow rate was inhibited by incomplete perforation, waxing of the tubing string above 800 metres, increased viscosity of the oil as it cooled in the upper part of the test string and a lack of specialist equipment.”
“As such, the Company estimates that the well could have flowed at approximately 4,000 bopd without these constraints”.
They added: “Rockhopper also believes that, with a more optimal well location and horizontal well completions, significantly higher flow rates could be achieved from future production wells.”
Rockhopper was the first company of the several operating (and drilling) in Falklands’ waters, to state that the Sea Lion prospects results were “commercially viable”. However the latest update, although optimistic, is a reminder of the technical difficulties faced by oil companies in the South Atlantic.
Following the release of the update Rockhopper shares soared as much as 9.5% in London. The shares have accumulated an increase of 1.332% since the first announcement on the oil discovery in May.
The other companies with Falklands’ government licences to explore for oil are Desire Petroleum, BHP Billion with Falkland Oil & Gas Ltd, Borders & Southern Petroleum and Argos Resources. Desire, Rockhopper and FOGL have drilled exploratory wells with the “Ocean Guardian” rig in Falklands waters since last February.
September 27, 2010 - CALGARY: MADALENA CASES THE CAN X-1 EXPLORATION WELL AS POTENTIAL OIL DISCOVERY (CANADA)
Source: cnw
Madalena Ventures Inc. and its wholly owned subsidiary Madalena Austral SA ("Madalena" or the "Corporation"), is pleased to announce that the Corporation's CAN X-1 exploratory well on the Coiron Amargo Block has been cased as a potential oil discovery. The well is situated on a defined 3D anomaly midway between the CAN X-3 well drilled in August 2010 and the CAN X-2 discovery well drilled in 2009.
The CAN X-1 well targeted the Sierras Blancas formation, which is a prolific oil producer in this part of the Neuquén Basin of Argentina. The CAN X-1 exploration well was drilled to total depth ("TD") of 10,930 feet and has been cased to TD.
The well encountered several zones with hydrocarbon potential. Based on electric logs, the Sierras Blancas formation encountered a gross hydrocarbon column of approximately 65 feet. The Vaca Muerta formation had a gross hydrocarbon column similar to that encountered at CAN X-3 of approximately 110 feet. Drilling and electric log data also indicate potential for hydrocarbons in the Lotena formation below the Sierras Blancas formation. A completion rig is being mobilized this week to test the Sierras Blancas formation encountered by the CAN X-3 well followed immediately by the CAN X-1 well.
As previously disclosed, the CAN X-1 exploration well is the second well of a two stage, multi-well drilling program ("Farmout") of the Coiron Amargo Block. Under the Farmout, the Farmee has 60 days from completion of the first stage of the drilling and completion program to elect to enter into the second stage of the program.
Madalena also announces that the drilling rig contracted to drill the Corporation's Curamhuele X-1001 exploratory well (truncation play) is expected to be onsite early October, 2010. The well location was selected based on 3D seismic and is situated up structure from an existing well located 2.4 kilometres away which tested varying light oil rates/cuts from two separate formations. The well is planned to be drilled to a drilling depth of approximately 8,850 feet in order to penetrate the Lower Troncoso and Avile formations. The Lower Troncoso and Avile formations are the main productive horizons from the El Trapial, Chihuido de la Sierra Negra and Lomita Sur fields located approximately 20-30 km east of Curamhuele where they have produced over 750 million barrels of oil to date. All references in this news release referring to oil and natural gas production from the El Trapial, Chihuido de la Sierra Negra and Lomita Sur fields have been obtained from the National Secretary of Energy of Argentina.
Madalena is a publicly traded international junior Canadian oil and gas exploration company trading on the TSX Venture Exchange under the symbol "MVN". The Company is actively evaluating international oil and gas opportunities with a primary focus on South America.
The CAN X-1 well targeted the Sierras Blancas formation, which is a prolific oil producer in this part of the Neuquén Basin of Argentina. The CAN X-1 exploration well was drilled to total depth ("TD") of 10,930 feet and has been cased to TD.
The well encountered several zones with hydrocarbon potential. Based on electric logs, the Sierras Blancas formation encountered a gross hydrocarbon column of approximately 65 feet. The Vaca Muerta formation had a gross hydrocarbon column similar to that encountered at CAN X-3 of approximately 110 feet. Drilling and electric log data also indicate potential for hydrocarbons in the Lotena formation below the Sierras Blancas formation. A completion rig is being mobilized this week to test the Sierras Blancas formation encountered by the CAN X-3 well followed immediately by the CAN X-1 well.
As previously disclosed, the CAN X-1 exploration well is the second well of a two stage, multi-well drilling program ("Farmout") of the Coiron Amargo Block. Under the Farmout, the Farmee has 60 days from completion of the first stage of the drilling and completion program to elect to enter into the second stage of the program.
Madalena also announces that the drilling rig contracted to drill the Corporation's Curamhuele X-1001 exploratory well (truncation play) is expected to be onsite early October, 2010. The well location was selected based on 3D seismic and is situated up structure from an existing well located 2.4 kilometres away which tested varying light oil rates/cuts from two separate formations. The well is planned to be drilled to a drilling depth of approximately 8,850 feet in order to penetrate the Lower Troncoso and Avile formations. The Lower Troncoso and Avile formations are the main productive horizons from the El Trapial, Chihuido de la Sierra Negra and Lomita Sur fields located approximately 20-30 km east of Curamhuele where they have produced over 750 million barrels of oil to date. All references in this news release referring to oil and natural gas production from the El Trapial, Chihuido de la Sierra Negra and Lomita Sur fields have been obtained from the National Secretary of Energy of Argentina.
Madalena is a publicly traded international junior Canadian oil and gas exploration company trading on the TSX Venture Exchange under the symbol "MVN". The Company is actively evaluating international oil and gas opportunities with a primary focus on South America.
28, 2010 - LONDON: UK's Falkland Oil shares slump as partner BHP Billiton pulls out (ENGLAND)
Source: Platts
Source: Platts
UK-based Falkland Oil and Gas Limited's shares slumped Tuesday after the company announced its major exploration partner BHP Billiton was pulling out of their license area to the south of the Falkland Islands.
BHP Billiton has told FOGL it does not intend to take part in the second phase of exploration work on the southern license area, which is due to start in December this year, FOGL said in a statement.
FOGL, however, said it believed the area was "still prospective," and that it would take a 100% interest in the blocks after BHP Billiton returns its 51% stake.
The next phase of work in the southern basin involves drilling a single well by December 2015.
The reassignment of BHP Billiton's interest to FOGL and the transfer of operatorship of the license area from one company to the other still require the approval of the Falkland Islands government.
FOGL's shares in London were down 26% at GBP1.1575 ($1.83) at 0858 GMT.
The company also announced Tuesday that it had been granted a one-year extension of its exploration licenses in the northern Falkland Basin after being unable to meet drilling commitments because of a tight rig market.
Under the existing license terms, FOGL was meant to have started the next phase of its drilling program in 2010, but the company said it was "increasingly unlikely" that this would happen.
The Falkland Islands government has agreed to extend the licenses by one year so that they now expire on December 15, 2011.
Earlier this month FOGL announced a successful flow test of oil from its Sea Lion discovery in the northern Falkland basin, the first significant oil find off the UK's Falkland Islands, whose sovereignty is disputed by Argentina.
BHP Billiton has told FOGL it does not intend to take part in the second phase of exploration work on the southern license area, which is due to start in December this year, FOGL said in a statement.
FOGL, however, said it believed the area was "still prospective," and that it would take a 100% interest in the blocks after BHP Billiton returns its 51% stake.
The next phase of work in the southern basin involves drilling a single well by December 2015.
The reassignment of BHP Billiton's interest to FOGL and the transfer of operatorship of the license area from one company to the other still require the approval of the Falkland Islands government.
FOGL's shares in London were down 26% at GBP1.1575 ($1.83) at 0858 GMT.
The company also announced Tuesday that it had been granted a one-year extension of its exploration licenses in the northern Falkland Basin after being unable to meet drilling commitments because of a tight rig market.
Under the existing license terms, FOGL was meant to have started the next phase of its drilling program in 2010, but the company said it was "increasingly unlikely" that this would happen.
The Falkland Islands government has agreed to extend the licenses by one year so that they now expire on December 15, 2011.
Earlier this month FOGL announced a successful flow test of oil from its Sea Lion discovery in the northern Falkland basin, the first significant oil find off the UK's Falkland Islands, whose sovereignty is disputed by Argentina.
27, 2010 - FALKLANDS/MALVINAS ISLANDS: Falkland Oil sees delay to drilling, BHP pulls out (ARGENTINA)
Source: News Agency
Source: News Agency
Falkland Oil & Gas's (FOGL.L) disputed drilling programme in the Falkland Islands has suffered a setback as drilling in one licence has been delayed and partner BHP Billiton (BLT.L) has pulled out of another.
The British oil and gas explorer said on Tuesday that it was increasingly unlikely it would be able to start drilling at its northern licence off the coast of the islands in 2010 due to difficulty in obtaining a rig.
The government of the Falklands had agreed to a year's extension of the licence terms, it added.
At the same time, resources giant BHP (BHP.AX) has decided not to proceed with the next phase of the southern licences, due to begin in December.
"Falkland Oil & Gas believes, based on the drilling results from the Toroa well analysed to date, that these licences are still prospective," said the company.
It said it would go ahead with the second phase of drilling, taking back BHP's 51 percent interest in the licence.
Shares in Falkland Oil & Gas were down 18 pct at 127.75 pence by 0715 GMT.
The company's acreage in the south is adjacent to prospects held by Borders & Southern Petroleum (BSTH.L).
In the North Falklands basin, a successful oil discovery has propelled the shares of Rockhopper (RKH.L) to an all-time high
But the extent of resources in the region is still far from clear and drilling has led to protests in Argentina, which claims sovereignty over the islands it calls the Malvinas.
Argentina fought a war with Britain after briefly taking possession of them in 1982.
The British oil and gas explorer said on Tuesday that it was increasingly unlikely it would be able to start drilling at its northern licence off the coast of the islands in 2010 due to difficulty in obtaining a rig.
The government of the Falklands had agreed to a year's extension of the licence terms, it added.
At the same time, resources giant BHP (BHP.AX) has decided not to proceed with the next phase of the southern licences, due to begin in December.
"Falkland Oil & Gas believes, based on the drilling results from the Toroa well analysed to date, that these licences are still prospective," said the company.
It said it would go ahead with the second phase of drilling, taking back BHP's 51 percent interest in the licence.
Shares in Falkland Oil & Gas were down 18 pct at 127.75 pence by 0715 GMT.
The company's acreage in the south is adjacent to prospects held by Borders & Southern Petroleum (BSTH.L).
In the North Falklands basin, a successful oil discovery has propelled the shares of Rockhopper (RKH.L) to an all-time high
But the extent of resources in the region is still far from clear and drilling has led to protests in Argentina, which claims sovereignty over the islands it calls the Malvinas.
Argentina fought a war with Britain after briefly taking possession of them in 1982.
September 25th 2010 - BRASILIA: Brazil’s oil prospects break all records of share placing: 70 billion US dollars m(BRAZIL)
Source: Mercopress
Brazil's government managed oil and gas company raised 70 billion US in the world's biggest-ever share offering Thursday. The success of Petrobras issue showed the extent of investor interest in Brazil's massive offshore oil reserves, one of the world's fastest-growing regions for energy production.
Decrease fontIncrease fontPrintShareComment The huge sub-salt deposits are still a technological challenge: two kilometre deep water and four kilometres into the earth’s crust
Petrobras sold more than four billion common and preferred shares in Brazil and the U.S. The money will fund the company's ambitious 224 billion US dollars five-year plan to develop its find.
Those fields lie at least 180 kilometers off the southeast coast of Brazil, close to two kilometers under the ocean's surface and another four kilometers below the sea floor.
Petrobras made the find more than two years ago. It's believed to hold more than 50 billion barrels of recoverable oil.
Petrobras forecasts that by 2014 it will produce the energy equivalent of 3.9 billion barrels of oil per day when natural gas output is included. That's equal to what Exxon Mobil Corp., the world's largest publicly traded oil and gas company produces today.
The increase in market value, to about $220 billion US, already moves Petrobras past Royal Dutch Shell PLC and Chevron into second place behind Exxon's 311.36 billion US dollars.
The sale amounted to about 18% of the value of all equity offerings completed in 2010, and exceeded by three times the record initial public offering of 22.1 billion USD by Agricultural Bank of China in July.
Nippon Telecom and Telegraph's 1987 share offering that brought in 36.7 billion US had been the largest on record.
After Petrobras share offer Brazil's federal government boosted its total stake in the company to about 48% from 40% after the company's share offer, according to Finance Minister Guido Mantega.
As a direct consequence of the placing Brazil’s currency, Real rose for a sixth week, the longest winning streak in 11 months.
The Real advanced 0.6% to 1.7109 per dollar. The currency rallied for seven consecutive weeks in the period ended Oct. 16, 2009, prompting the government to impose taxes on foreigners in stocks and bonds.
Decrease fontIncrease fontPrintShareComment The huge sub-salt deposits are still a technological challenge: two kilometre deep water and four kilometres into the earth’s crust
Petrobras sold more than four billion common and preferred shares in Brazil and the U.S. The money will fund the company's ambitious 224 billion US dollars five-year plan to develop its find.
Those fields lie at least 180 kilometers off the southeast coast of Brazil, close to two kilometers under the ocean's surface and another four kilometers below the sea floor.
Petrobras made the find more than two years ago. It's believed to hold more than 50 billion barrels of recoverable oil.
Petrobras forecasts that by 2014 it will produce the energy equivalent of 3.9 billion barrels of oil per day when natural gas output is included. That's equal to what Exxon Mobil Corp., the world's largest publicly traded oil and gas company produces today.
The increase in market value, to about $220 billion US, already moves Petrobras past Royal Dutch Shell PLC and Chevron into second place behind Exxon's 311.36 billion US dollars.
The sale amounted to about 18% of the value of all equity offerings completed in 2010, and exceeded by three times the record initial public offering of 22.1 billion USD by Agricultural Bank of China in July.
Nippon Telecom and Telegraph's 1987 share offering that brought in 36.7 billion US had been the largest on record.
After Petrobras share offer Brazil's federal government boosted its total stake in the company to about 48% from 40% after the company's share offer, according to Finance Minister Guido Mantega.
As a direct consequence of the placing Brazil’s currency, Real rose for a sixth week, the longest winning streak in 11 months.
The Real advanced 0.6% to 1.7109 per dollar. The currency rallied for seven consecutive weeks in the period ended Oct. 16, 2009, prompting the government to impose taxes on foreigners in stocks and bonds.
September 24, 2010 - BRASILIA: Government's enlarged 48% stake in Petrobras within expectations - analyst - (BRAZIL)
Source: Business News Americas
The Brazilian government's increased total stake of 48% in federal energy company Petrobras (NYSE: PBR) was within market expectations, and investors will now observe how much new political interference the company will suffer, Fausto Gouveia, an economist at Legan Asset Management, told BNamericas.
Brazilian finance minister Guido Mantega said the government had raised its stake in Petrobras to 48% from 32% in the capitalization process, according to state news agency Agencia Brasil. The government controls the company through 55.6% of voting shares.
The company on September 23 fixed its price for the new shares and ended up bringing in a record US$70bn once supplementary shares were counted.
Petrobras on September 17 doubled the amount of stock that could be issued in the capitalization process.
Petrobras sold as much as 2.72bn common shares and 1.98bn preferred shares. The government is buying about US$42.5bn worth of stock in return for the right to develop about 5Bb of reserves.
With the US$70bn raised, the Petrobras capitalization became the biggest in history, topping the 1987 capitalization of Japan's Nippon Telephone and Telegraph Corporation (NTT) that raised the equivalent of US$68bn at today's rates.
Petrobras will use proceeds from the issue to finance its US$224bn investment plan for the next five years.
Brazilian finance minister Guido Mantega said the government had raised its stake in Petrobras to 48% from 32% in the capitalization process, according to state news agency Agencia Brasil. The government controls the company through 55.6% of voting shares.
The company on September 23 fixed its price for the new shares and ended up bringing in a record US$70bn once supplementary shares were counted.
Petrobras on September 17 doubled the amount of stock that could be issued in the capitalization process.
Petrobras sold as much as 2.72bn common shares and 1.98bn preferred shares. The government is buying about US$42.5bn worth of stock in return for the right to develop about 5Bb of reserves.
With the US$70bn raised, the Petrobras capitalization became the biggest in history, topping the 1987 capitalization of Japan's Nippon Telephone and Telegraph Corporation (NTT) that raised the equivalent of US$68bn at today's rates.
Petrobras will use proceeds from the issue to finance its US$224bn investment plan for the next five years.
September 27, 2010 - BRASILIA: Petrobras fixes share price in huge capitalization (BRAZIL)
Source: PETROLEUMWORLD
Petrobras, Brazil's state-controlled oil company, said late Thursday it had priced a new share issue to bring in more than 67 billion dollars in a capitalization that could be the world's biggest.
The company said it had fixed the price of ordinary, non-voting shares in the issuance at 29.65 reais (17.21 dollars) each, and voting preferential shares at 26.30 reais (15.27 dollars) each.
It said that would be applied to 2.29 billion ordinary shares and 1.79 billion preferred shares, for a total of 66.89 billion dollars.
But over-allotments and an extra release if demand was high enough could edge that figure higher.
If more than 69 billion dollars ends up being raised, the Petrobras offer will be the biggest in history, topping the 1987 capitalization of Japan's Nippon Telephone and Telegraph Corp. (NTT) that generated 36.8 billion dollars -- equivalent to 68.6 billion dollars today, adjusted for inflation.
Brazil's government has already been attributed the lion's share of the Petrobras capitalization, walking away with 42 billion dollars' worth of shares in exchange for ceding five billion barrels of oil to the company.
The Brazilian financial daily said the government's stake in Petrobras could expand from 39 percent to 45 percent.
The new shares were to be traded from Friday in New York and from Monday in Sao Paulo.
The company said it had fixed the price of ordinary, non-voting shares in the issuance at 29.65 reais (17.21 dollars) each, and voting preferential shares at 26.30 reais (15.27 dollars) each.
It said that would be applied to 2.29 billion ordinary shares and 1.79 billion preferred shares, for a total of 66.89 billion dollars.
But over-allotments and an extra release if demand was high enough could edge that figure higher.
If more than 69 billion dollars ends up being raised, the Petrobras offer will be the biggest in history, topping the 1987 capitalization of Japan's Nippon Telephone and Telegraph Corp. (NTT) that generated 36.8 billion dollars -- equivalent to 68.6 billion dollars today, adjusted for inflation.
Brazil's government has already been attributed the lion's share of the Petrobras capitalization, walking away with 42 billion dollars' worth of shares in exchange for ceding five billion barrels of oil to the company.
The Brazilian financial daily said the government's stake in Petrobras could expand from 39 percent to 45 percent.
The new shares were to be traded from Friday in New York and from Monday in Sao Paulo.
September 27, 2010 - BRASILIA: Petrobras raises $70bn in share offering (BRAZIL)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Brazilian state oil company Petrobras raised $70 billion in the world's biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves.
Brazil's federal government increased its total stake the company to about 48% from 40% said Finance Minister Guido Mantega.
The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais ($15.26) each, the company said in a regulatory filing. It sold 2.4 billion new common – or voting – shares at 29.65 reais each.
The cash will help fund the world's largest oil exploration plan, which at $224 billion for the 2010-2014 period aims to turn Brazil into a major energy exporter.
Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than $70 billion off its market value. But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.
"The deal priced at a very tight discount, which is comforting to know because the market expected it to price lower," Marcio Macedo, who manages about $40 million of stocks for Sao Paulo-based Humaita Investimentos, told Reuters.
"After this very successful deal, markets will be in a good tone tomorrow."
The deal's 2% discount to yesterday's closing price was much smaller than what investors expected, Macedo said.
The record-setting stock offering, which was larger than what the company originally planned but fell short of the maximum it had filed to sell, had total demand of $140 billion. The bids included $98 billion from existing shareholders and $42 billion from institutional investors, a source with knowledge of the transaction said.
Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity.
The offering had "tremendous demand" from US mutual funds, the source added.
Petrobras said in the filing that it may sell another 188 million new shares to meet demand in the next 30 days.
Brazil's federal government increased its total stake the company to about 48% from 40% said Finance Minister Guido Mantega.
The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais ($15.26) each, the company said in a regulatory filing. It sold 2.4 billion new common – or voting – shares at 29.65 reais each.
The cash will help fund the world's largest oil exploration plan, which at $224 billion for the 2010-2014 period aims to turn Brazil into a major energy exporter.
Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than $70 billion off its market value. But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.
"The deal priced at a very tight discount, which is comforting to know because the market expected it to price lower," Marcio Macedo, who manages about $40 million of stocks for Sao Paulo-based Humaita Investimentos, told Reuters.
"After this very successful deal, markets will be in a good tone tomorrow."
The deal's 2% discount to yesterday's closing price was much smaller than what investors expected, Macedo said.
The record-setting stock offering, which was larger than what the company originally planned but fell short of the maximum it had filed to sell, had total demand of $140 billion. The bids included $98 billion from existing shareholders and $42 billion from institutional investors, a source with knowledge of the transaction said.
Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity.
The offering had "tremendous demand" from US mutual funds, the source added.
Petrobras said in the filing that it may sell another 188 million new shares to meet demand in the next 30 days.
September 28, 2010 - BRASILIA: Lula tells Brazilians to vote for 'continuity' with successor (BRAZIL)
Source: PETROLEUMWORLD
Source: PETROLEUMWORLD
The favorite to win Brazil's presidential elections next weekend, Dilma Rousseff, wrapped up her campaigning Monday with her mentor, President Luiz Inacio Lula da Silva, calling for Brazilians to elect her in the name of "continuity."
Rousseff, 62, repeatedly told a crowd of thousands under rain in Sao Paulo she was proud to have served as Lula's cabinet chief, reinforcing her association with the hugely popular outgoing leader.
"Sunday, we are going to again show that this democratic country knows how to give its opinion," she said. "So much so that eight years ago it voted for change and hope as the president of Brazil."
Lula, who came to power in 2003, is constitutionally barred from seeking a third four-year term.
He has thrown his considerable charisma behind Rousseff, helping her climb in the polls so far that it appears she could win Sunday's election outright with enough votes to make a runoff round unnecessary.
He also used the campaign stage to list his government's achievements, including the capitalization of state-run oil company Petrobras, which last week launched a new share offer worth 70 billion dollars.
"I'm the one who has to thank the Brazilian people for their trust and their help," he said.
Rousseff, 62, repeatedly told a crowd of thousands under rain in Sao Paulo she was proud to have served as Lula's cabinet chief, reinforcing her association with the hugely popular outgoing leader.
"Sunday, we are going to again show that this democratic country knows how to give its opinion," she said. "So much so that eight years ago it voted for change and hope as the president of Brazil."
Lula, who came to power in 2003, is constitutionally barred from seeking a third four-year term.
He has thrown his considerable charisma behind Rousseff, helping her climb in the polls so far that it appears she could win Sunday's election outright with enough votes to make a runoff round unnecessary.
He also used the campaign stage to list his government's achievements, including the capitalization of state-run oil company Petrobras, which last week launched a new share offer worth 70 billion dollars.
"I'm the one who has to thank the Brazilian people for their trust and their help," he said.
September 28, 2010 - BRASILIA: Petrobras becomes 3rd biggest oil firm with share issue (BRAZIL)
Source: PETROLEUMWORLD
Source: PETROLEUMWORLD
Brazil's President Luiz Inacio Lula da Silva, Finance Minister Guido Mantega and Petrobras Chief Executive Jose Sergio Gabrielli (L-R) attend Brazilian state oil company Petrobras' share offering ceremony in Sao Paulo September 24, 2010.
Brazil's state-run Petrobras became the world's third-biggest oil firm by market capitalization Monday as it completed a record share issue expected to bring in around 70 billion dollars.
After selling the stock on the New York stock exchange from last Friday, in the form of American Depository Receipts, the company began also selling the shares Monday on the Sao Paulo stock exchange.
Those shares rose 1.93 percent to 30.23 reals by the end of trading -- higher than the 29.65 reals the new shares were priced at for trading, showing strong demand.
The offering has made Petrobras the third largest oil company in the world after US-based ExxonMobil and PetroChina.
Brokers, though, said a long-term "uncertainty, a negative pressure" lingered over the shares because of doubts over investors' returns.
The government's increase in its stake in Petrobras, from 40 percent to 48 percent, also generated concerns.
"The degree of government intervention in decisions during the whole (capitalization) process was too high for a publicly listed company," said Miriam Leitao, an economic columnist for the newspaper O Globo.
She noted that Petrobras had lost a quarter of its value over this year because of that preoccupation.
"Small investors are in the hands of the government," Fabio Knczuk, an economics professor at the University of Sao Paulo, told AFP.
Petrobras is to use the proceeds from the share sale to explore the offshore oil fields, which are so big they could make Brazil a major exporter.
The company wants to boost capital expenditure over the next five years to 224 billion dollars to exploit the fresh reserves.
Petrobras estimates the so-called subsalt fields could more than triple its existing proven oil reserves of 14 billion barrels.
Brazil's state-run Petrobras became the world's third-biggest oil firm by market capitalization Monday as it completed a record share issue expected to bring in around 70 billion dollars.
After selling the stock on the New York stock exchange from last Friday, in the form of American Depository Receipts, the company began also selling the shares Monday on the Sao Paulo stock exchange.
Those shares rose 1.93 percent to 30.23 reals by the end of trading -- higher than the 29.65 reals the new shares were priced at for trading, showing strong demand.
The offering has made Petrobras the third largest oil company in the world after US-based ExxonMobil and PetroChina.
Brokers, though, said a long-term "uncertainty, a negative pressure" lingered over the shares because of doubts over investors' returns.
The government's increase in its stake in Petrobras, from 40 percent to 48 percent, also generated concerns.
"The degree of government intervention in decisions during the whole (capitalization) process was too high for a publicly listed company," said Miriam Leitao, an economic columnist for the newspaper O Globo.
She noted that Petrobras had lost a quarter of its value over this year because of that preoccupation.
"Small investors are in the hands of the government," Fabio Knczuk, an economics professor at the University of Sao Paulo, told AFP.
Petrobras is to use the proceeds from the share sale to explore the offshore oil fields, which are so big they could make Brazil a major exporter.
The company wants to boost capital expenditure over the next five years to 224 billion dollars to exploit the fresh reserves.
Petrobras estimates the so-called subsalt fields could more than triple its existing proven oil reserves of 14 billion barrels.
September 28, 2010 - BRASILIA: Inga test cheers OGX (BRAZIL)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Brazilian explorer OGX has notched up another success, with a cased hole drillstem test on the OGX-18-RJS well, drilled on the Inga prospect, delivering the goods.
The well is in Block BM-C-40, in the shallow waters of the Campos Basin. OGX holds a 100% working interest in the block.
Paulo Mendonca, OGX's general executive, said: “The recent conclusion of another drillstem test in this part of the Campos basin, reaching high productivity levels, represents an important step in the pursuit of knowledge on the reservoirs’ characteristics, with the objective of beginning production as quickly as possible, always applying the best practices within the industry."
The OGX-18 well was drilled to a depth of 2260 metres, resulting in the detection of hydrocarbons in both the sandstone reservoirs of the Santonian section and in the carbonate reservoirs of the Albian section.
The cased hole drillstem test was carried out in sandstone reservoirs of the Santonian accumulation in order to verify the reservoir’s characteristics under dynamic conditions.
Pressure and flow data, as well as permo-porosity conditions, confirm the potential production of between 8000 and 12,000 barrels of 27 degree API oil per day in each vertical well and between 25,000 and 35,000 bpd in each horizontal well.
The static pressures measured were normal with no indication of depletion.
Ocean Lexington, the rig used in the drilling of the well and in this test, will be mobilised to the Pipeline discovery well in Block BM-C-41, in order to collect additional data concerning the existing reservoirs.
The well is in Block BM-C-40, in the shallow waters of the Campos Basin. OGX holds a 100% working interest in the block.
Paulo Mendonca, OGX's general executive, said: “The recent conclusion of another drillstem test in this part of the Campos basin, reaching high productivity levels, represents an important step in the pursuit of knowledge on the reservoirs’ characteristics, with the objective of beginning production as quickly as possible, always applying the best practices within the industry."
The OGX-18 well was drilled to a depth of 2260 metres, resulting in the detection of hydrocarbons in both the sandstone reservoirs of the Santonian section and in the carbonate reservoirs of the Albian section.
The cased hole drillstem test was carried out in sandstone reservoirs of the Santonian accumulation in order to verify the reservoir’s characteristics under dynamic conditions.
Pressure and flow data, as well as permo-porosity conditions, confirm the potential production of between 8000 and 12,000 barrels of 27 degree API oil per day in each vertical well and between 25,000 and 35,000 bpd in each horizontal well.
The static pressures measured were normal with no indication of depletion.
Ocean Lexington, the rig used in the drilling of the well and in this test, will be mobilised to the Pipeline discovery well in Block BM-C-41, in order to collect additional data concerning the existing reservoirs.
September 28, 2010 - BRASILIA: Brazil Proposes 3700 MW of Novel Hydropower Capacity (BRAZIL)
Source: AzoTech
Source: AzoTech
Brazil might sell the rights towards building approximately 3,700 MW of hydropower capacity before 2010-end since 10 novel hydroelectric projects are likely to be auctioned off.
Brazil’s electricity regulator is currently preparing these auctions while the environmental licenses for these projects might be ready by year end.
The auction might include power generated from the Santo Antonio do Jari dam located in the Amazon region of Brazil, four hydroelectric projects located in the center-west region on the river of Teles Pires and five hydro projects located in the northeastern region along the Parnaiba River.
The winning bids that offer to sell power from dams for the lowest possible prices would be required to start generating energy by the year 2015, as per indications from reports.
Brazil’s electricity regulator is currently preparing these auctions while the environmental licenses for these projects might be ready by year end.
The auction might include power generated from the Santo Antonio do Jari dam located in the Amazon region of Brazil, four hydroelectric projects located in the center-west region on the river of Teles Pires and five hydro projects located in the northeastern region along the Parnaiba River.
The winning bids that offer to sell power from dams for the lowest possible prices would be required to start generating energy by the year 2015, as per indications from reports.
September 28, 2010 - BRASILIA: Brazil's oil wealth a golden opportunity (BRAZIL)
Source: Irish Times
AFTER BRAZIL’S energy giant Petrobras discovered vast new oil fields off the country’s southeast coast in 2007, President Luiz Inácio Lula da Silva had no doubt about the significance of the find. It was, he said, “a gift from God”.
Brazil knows only too well the vital importance of oil to a modern economy. In the late 1960s and early 1970s the country was expanding at rates now associated with China. But as the economy grew it needed to import more crude, making it especially vulnerable to the oil shocks of 1973 and 1979. Those sudden spikes in prices caused a ballooning of its foreign debt, which by the start of the 1980s had strangled growth.
The resulting “lost decade” produced a rise in inequality and a decline in investment, leaving the country with an infrastructure creaking under the demands placed on it by the return of sustained growth in recent years.
Now the hope is that tapping the new fields will transform Brazil from self-sufficiency in oil into a big exporter, thus accelerating Brazil’s advance to become one of the world’s top five economies. The profits are to go towards transforming the underfunded public health and education systems as part of a campaign to eradicate centuries of poverty. “What we have in our hands is superior to all the opportunities offered to us by our history,” said President Lula on Friday.
He was speaking at a ceremony to mark the conclusion of the biggest share offering in Brazil’s history in which Petrobras raised the equivalent of €50 billion in capital. It will go towards the company’s €166 billion investment plan that will fund new oil platforms, tankers, refineries and pipelines over the next five years.
Such huge spending has reactivated the country’s long-moribund shipbuilding industry while captains of industries from steel to high tech can barely contain their excitement at the thought of the orders set to roll in from the energy industry in the future.
However, sceptics warn that Mr Lula’s government, in its eagerness to ensure most of the benefits from the oil boom stay in Brazil, is loading excessive risk on to state-controlled Petrobras. New legislation reserves the lion’s share of the pre-salt fields for the company, restricting foreign oil companies to being little more than junior investors in Petrobras operations.
Economists warn that this leaves Petrobras carrying most of the risk for realising what should be an oil region even bigger than the North Sea, which took decades and dozens of firms to develop.
Costs could also spiral as the government insists new drilling rigs, platforms and ships be at least 65 per cent “made in Brazil”. The goal is to use the oil to broaden and deepen the industrial base. But meeting that demand will be a challenge even to the rapidly expanding shipbuilding industry and its suppliers.
Petrobras will have to train tens of thousands of engineers and technicians in a country where 15 per cent of children between 15 and 17 do not attend school and where a fifth of the population is defined as functionally illiterate by the ministry of education. The foreign manager of one oil rig hired by the state oil company said it has to fly in electricians from abroad because of the difficulty finding qualified locals able to read a basic instruction manual.
The extent of the funds being raised to transform the pre-salt finds into productive oil fields also masks a worrying level of underinvestment in infrastructure in the wider economy that calls into question Brazil’s preparedness for hosting the World Cup and the Olympics within the next six years.
Even before the world’s sports’ fans descend on the country, the air network is straining under rising demand for flights. At Santos, Latin America’s biggest port, ships line up out at sea for a berth while there are often long lines of trucks forced to sit on the hard shoulder of roads leading to the quays as they wait to unload.
These trucks often have to travel for days across poor roads, all the while eating away at the country’s competitive advantage. Brazil’s boom is running into bottlenecks.
According to the Organisation for Economic Co-operation and Development of the world’s 11 biggest economies Brazil has the lowest rate of investment, at just 17.52 per cent. This compares to 40 per cent in China and is below the 25 per cent economists say the country needs to allow the economy to grow without running into bottlenecks that fuel inflation.
A perennial scourge for Brazil, the risk of higher inflation is that it will provoke a hawkish central bank to raise interest rates, which at 10.75 per cent makes Brazilian financing among the most expensive in the world. This would further discourage investment by a private sector already burdened by the sort of taxes and red tape which meant Brazil slipped this year to 58th in the World Economic Forum’s annual competitiveness index of 139 countries, behind China and India.
“There is no incentive to invest. The immediate bottleneck is infrastructure. But the biggest problem in terms of Brazil overall is taxes. The tax system explains the savings rate being low, the investment rate being low, interest rates being high. And why is that? Because we have a government that is very hungry,” says Emy Shayo, an economist with JP Morgan in São Paulo.
The favourite to win Sunday’s election to replace Lula as president is acutely aware of the problem. As chairwoman of Petrobras and charged with Mr Lula’s infrastructure investment programme, Dilma Rousseff knows the challenges the country faces. Moreover, Ms Rousseff realises she will be closely associated with any failure to overcome them. She has assembled a €600 billion investment programme over the next five years and is rumoured to be planning a “super” transport ministry in order to have Brazil’s airports ready for the 2014 World Cup. All of the main candidates talk about the urgent need for tax reform next year.
But with the world’s premier soccer tournament now less than four years away the growing sense of urgency risks exposing Brazil’s weak controls against corruption.
During Lula’s administration the country fell from 45th to 75th place on Transparency International’s ranking of the globe’s least corrupt states. The 2007 Pan American Games in Rio de Janeiro – seen as a trial run for the Olympics – came in eight times over budget, despite little of the promised infrastructure having been built.
“The government is already creating special rules to govern spending on the World Cup and the Olympics. When you start speaking of special rules you have to be careful, there is always something wrong going on. Why does it have to be special? Because they do not want this spending submitted to the usual controls,” says Claudio Weber Abramo, executive director of Transparência Brasil, a local anti-corruption organisation.
While Brazil’s government is confident that it will be ready to host the world’s showpiece sporting events the question for its citizens is – at what price?
Brazil knows only too well the vital importance of oil to a modern economy. In the late 1960s and early 1970s the country was expanding at rates now associated with China. But as the economy grew it needed to import more crude, making it especially vulnerable to the oil shocks of 1973 and 1979. Those sudden spikes in prices caused a ballooning of its foreign debt, which by the start of the 1980s had strangled growth.
The resulting “lost decade” produced a rise in inequality and a decline in investment, leaving the country with an infrastructure creaking under the demands placed on it by the return of sustained growth in recent years.
Now the hope is that tapping the new fields will transform Brazil from self-sufficiency in oil into a big exporter, thus accelerating Brazil’s advance to become one of the world’s top five economies. The profits are to go towards transforming the underfunded public health and education systems as part of a campaign to eradicate centuries of poverty. “What we have in our hands is superior to all the opportunities offered to us by our history,” said President Lula on Friday.
He was speaking at a ceremony to mark the conclusion of the biggest share offering in Brazil’s history in which Petrobras raised the equivalent of €50 billion in capital. It will go towards the company’s €166 billion investment plan that will fund new oil platforms, tankers, refineries and pipelines over the next five years.
Such huge spending has reactivated the country’s long-moribund shipbuilding industry while captains of industries from steel to high tech can barely contain their excitement at the thought of the orders set to roll in from the energy industry in the future.
However, sceptics warn that Mr Lula’s government, in its eagerness to ensure most of the benefits from the oil boom stay in Brazil, is loading excessive risk on to state-controlled Petrobras. New legislation reserves the lion’s share of the pre-salt fields for the company, restricting foreign oil companies to being little more than junior investors in Petrobras operations.
Economists warn that this leaves Petrobras carrying most of the risk for realising what should be an oil region even bigger than the North Sea, which took decades and dozens of firms to develop.
Costs could also spiral as the government insists new drilling rigs, platforms and ships be at least 65 per cent “made in Brazil”. The goal is to use the oil to broaden and deepen the industrial base. But meeting that demand will be a challenge even to the rapidly expanding shipbuilding industry and its suppliers.
Petrobras will have to train tens of thousands of engineers and technicians in a country where 15 per cent of children between 15 and 17 do not attend school and where a fifth of the population is defined as functionally illiterate by the ministry of education. The foreign manager of one oil rig hired by the state oil company said it has to fly in electricians from abroad because of the difficulty finding qualified locals able to read a basic instruction manual.
The extent of the funds being raised to transform the pre-salt finds into productive oil fields also masks a worrying level of underinvestment in infrastructure in the wider economy that calls into question Brazil’s preparedness for hosting the World Cup and the Olympics within the next six years.
Even before the world’s sports’ fans descend on the country, the air network is straining under rising demand for flights. At Santos, Latin America’s biggest port, ships line up out at sea for a berth while there are often long lines of trucks forced to sit on the hard shoulder of roads leading to the quays as they wait to unload.
These trucks often have to travel for days across poor roads, all the while eating away at the country’s competitive advantage. Brazil’s boom is running into bottlenecks.
According to the Organisation for Economic Co-operation and Development of the world’s 11 biggest economies Brazil has the lowest rate of investment, at just 17.52 per cent. This compares to 40 per cent in China and is below the 25 per cent economists say the country needs to allow the economy to grow without running into bottlenecks that fuel inflation.
A perennial scourge for Brazil, the risk of higher inflation is that it will provoke a hawkish central bank to raise interest rates, which at 10.75 per cent makes Brazilian financing among the most expensive in the world. This would further discourage investment by a private sector already burdened by the sort of taxes and red tape which meant Brazil slipped this year to 58th in the World Economic Forum’s annual competitiveness index of 139 countries, behind China and India.
“There is no incentive to invest. The immediate bottleneck is infrastructure. But the biggest problem in terms of Brazil overall is taxes. The tax system explains the savings rate being low, the investment rate being low, interest rates being high. And why is that? Because we have a government that is very hungry,” says Emy Shayo, an economist with JP Morgan in São Paulo.
The favourite to win Sunday’s election to replace Lula as president is acutely aware of the problem. As chairwoman of Petrobras and charged with Mr Lula’s infrastructure investment programme, Dilma Rousseff knows the challenges the country faces. Moreover, Ms Rousseff realises she will be closely associated with any failure to overcome them. She has assembled a €600 billion investment programme over the next five years and is rumoured to be planning a “super” transport ministry in order to have Brazil’s airports ready for the 2014 World Cup. All of the main candidates talk about the urgent need for tax reform next year.
But with the world’s premier soccer tournament now less than four years away the growing sense of urgency risks exposing Brazil’s weak controls against corruption.
During Lula’s administration the country fell from 45th to 75th place on Transparency International’s ranking of the globe’s least corrupt states. The 2007 Pan American Games in Rio de Janeiro – seen as a trial run for the Olympics – came in eight times over budget, despite little of the promised infrastructure having been built.
“The government is already creating special rules to govern spending on the World Cup and the Olympics. When you start speaking of special rules you have to be careful, there is always something wrong going on. Why does it have to be special? Because they do not want this spending submitted to the usual controls,” says Claudio Weber Abramo, executive director of Transparência Brasil, a local anti-corruption organisation.
While Brazil’s government is confident that it will be ready to host the world’s showpiece sporting events the question for its citizens is – at what price?
September 24, 2010 - BOGOTA: Endesa to build 400MW hydroelectric plant in Colombia (COLOMBIA)
Source: Energy Business Review
EBR Staff Writer Published 24 September 2010 Spanish utility Endesa, through its subsidiary Emgesa, will invest $837m to build a 400MW hydroelectric plant in southeastern Colombia.
The El Quimbo hydropower plant will generate about 2,216GWh of electricity per year and is controlled by Italy's Enel.
The plant will be fed by the Magdalena River and its construction will take approximately four years.
Endesa claims that this project will increase energy security and stability of the country's electrical system, while confirming the purpose of Endesa Enel Group to have a generating capacity of more than 50% of its capacity free of emissions of greenhouse gases.
This is the largest hydroelectric plant developed by Endesa in Latin America after the 690MW Ralco hydroelectric plant in Chile, which was launched in 2004.
The El Quimbo hydropower plant will generate about 2,216GWh of electricity per year and is controlled by Italy's Enel.
The plant will be fed by the Magdalena River and its construction will take approximately four years.
Endesa claims that this project will increase energy security and stability of the country's electrical system, while confirming the purpose of Endesa Enel Group to have a generating capacity of more than 50% of its capacity free of emissions of greenhouse gases.
This is the largest hydroelectric plant developed by Endesa in Latin America after the 690MW Ralco hydroelectric plant in Chile, which was launched in 2004.
September 27, 2010 - BOGOTA: Global Oil & Gas Leader Ecopetrol Signs Multi-Million Dollar Deal with Mincom to Further Drive Asset, Workforce Performance (COLOMBIA)
Source: Benzinga
Source: Benzinga
To further enhance the performance of its regional oil operations, Ecopetrol, one of the 40 largest petroleum companies in the world and one of the four principal petroleum companies in Latin America, has significantly expanded its relationship with Mincom, the leading global provider of software and services to asset-intensive industries. Building upon a successful 15-year relationship with Mincom, Ecopetrol is upgrading to a new release of Mincom Ellipse, Mincom’s flagship Enterprise Asset Management (EAM) solution, and adopting Mincom Enterprise Reporting & Analytics for enterprise visibility and Mincom Ellipse Work Management for real-time asset maintenance.
As importantly, Ecopetrol is leveraging Mincom’s out-of-the-box integration to leading ERP applications, seamlessly pairing Mincom’s best-of-breed EAM functionality with the company’s enterprise-wide implementation of SAP Enterprise Resource Planning (ERP) applications for HR and Finance.
“We place enormous value on our partnership with Ecopetrol, and believe the company represents a best-practices approach for natural resources companies worldwide who seek to continuously improve operations by optimizing the performance of their assets and workforce,” said Gary Poole, president of Latin America, Mincom. “Ecopetrol also exemplifies how companies can seamlessly implement Mincom Ellipse with their current ERP investments, successfully leveraging Mincom’s best-of-breed EAM functionality with leading ERP applications from SAP or Oracle.”
Ecopetrol and Mincom first partnered in 1994, when Ecopetrol implemented Mincom’s EAM solutions at its refinery in Cartagena, Colombia. The company then extended its Mincom implementation across 32 operational sites across Colombia.
The management of materials and maintenance across Ecopetrol’s organization – which is comprised of more than 6,000 employees, 32 districts, more than 8,500 kilometres of pipeline, 320,0000 assets, 125 warehouses, 16,000 monthly maintenance orders and 290,000 catalogued inventory items – is centralized and optimized through Mincom Ellipse. With Mincom Ellipse, Ecopetrol has successfully streamlined its inventory, increased equipment availability and reduced operational costs – achieving a return on investment in five years and savings of millions of dollars in the first implementation project.
Ecopetrol is one of the 40 largest oil companies worldwide and among the four largest oil companies in Latin America. In addition to Colombia, where the company accounts for 60 percent of the country’s total oil production, Ecopetrol conducts exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico).
September 27, 2010 - HAVANA: Cuba Government Hikes Fuel Prices (CUBA)
Source: Latin American Herald Tribune
As importantly, Ecopetrol is leveraging Mincom’s out-of-the-box integration to leading ERP applications, seamlessly pairing Mincom’s best-of-breed EAM functionality with the company’s enterprise-wide implementation of SAP Enterprise Resource Planning (ERP) applications for HR and Finance.
“We place enormous value on our partnership with Ecopetrol, and believe the company represents a best-practices approach for natural resources companies worldwide who seek to continuously improve operations by optimizing the performance of their assets and workforce,” said Gary Poole, president of Latin America, Mincom. “Ecopetrol also exemplifies how companies can seamlessly implement Mincom Ellipse with their current ERP investments, successfully leveraging Mincom’s best-of-breed EAM functionality with leading ERP applications from SAP or Oracle.”
Ecopetrol and Mincom first partnered in 1994, when Ecopetrol implemented Mincom’s EAM solutions at its refinery in Cartagena, Colombia. The company then extended its Mincom implementation across 32 operational sites across Colombia.
The management of materials and maintenance across Ecopetrol’s organization – which is comprised of more than 6,000 employees, 32 districts, more than 8,500 kilometres of pipeline, 320,0000 assets, 125 warehouses, 16,000 monthly maintenance orders and 290,000 catalogued inventory items – is centralized and optimized through Mincom Ellipse. With Mincom Ellipse, Ecopetrol has successfully streamlined its inventory, increased equipment availability and reduced operational costs – achieving a return on investment in five years and savings of millions of dollars in the first implementation project.
Ecopetrol is one of the 40 largest oil companies worldwide and among the four largest oil companies in Latin America. In addition to Colombia, where the company accounts for 60 percent of the country’s total oil production, Ecopetrol conducts exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico).
September 27, 2010 - HAVANA: Cuba Government Hikes Fuel Prices (CUBA)
Source: Latin American Herald Tribune
The Cuban government announced Monday that the prices of gasoline and diesel fuel will increase by 10 percent to 18 percent.
A note from the Finance and Prices Ministry, published in the Communist Party daily Granma, justifies the increase because “the average international price of oil in the course of the current year, as well as its forecast for the future, is more than 25 percent over the year 2009.”
He also said that the value of fuels on the international market affects the island’s economy, and therefore “it becomes necessary to increase prices in convertible Cuban pesos.”
The Cuban convertible peso, or CUC, is worth $1.08 at the official exchange rate.
The new prices set a liter of premium gasoline at 1.30 CUCs ($1.40), an increase of 18 percent.
Regular gasoline now costs 1.15 CUCs ($1.24) a liter, up 15 percent.
At the same time a liter of regular diesel increases to 1.10 CUCs ($1.18) for a 10 percent price hike.
A liter is a little more than a quarter of a U.S. gallon.
The announcement said that international prices have a “marked instability,” so that in the future the service network “will inform customers about any new changes that become necessary to put into effect.”
Cuba’s last price increase for fuels goes back to September 2008, when without notice the Raul Castro government decreed an increase of up to 87 percent in the price of fuels, coinciding with the devastation from Hurricane Ike.
Cuba receives some 93,000 barrels of oil per day from Venezuela, which amounts to 50 percent of its consumption together with that produced on the island, basically used for generating electricity.
The island pays for part of the Venezuelan oil shipments with services that both countries evaluate according to market criteria, and which include medical treatment plus consultancy and training by technicians and experts in the fields of education and athletics.
The fuel-price increases come at a time when Cuba is going through one of its worst recessions in recent decades.
The median monthly income in Cuba is equivalent to roughly $17.
A note from the Finance and Prices Ministry, published in the Communist Party daily Granma, justifies the increase because “the average international price of oil in the course of the current year, as well as its forecast for the future, is more than 25 percent over the year 2009.”
He also said that the value of fuels on the international market affects the island’s economy, and therefore “it becomes necessary to increase prices in convertible Cuban pesos.”
The Cuban convertible peso, or CUC, is worth $1.08 at the official exchange rate.
The new prices set a liter of premium gasoline at 1.30 CUCs ($1.40), an increase of 18 percent.
Regular gasoline now costs 1.15 CUCs ($1.24) a liter, up 15 percent.
At the same time a liter of regular diesel increases to 1.10 CUCs ($1.18) for a 10 percent price hike.
A liter is a little more than a quarter of a U.S. gallon.
The announcement said that international prices have a “marked instability,” so that in the future the service network “will inform customers about any new changes that become necessary to put into effect.”
Cuba’s last price increase for fuels goes back to September 2008, when without notice the Raul Castro government decreed an increase of up to 87 percent in the price of fuels, coinciding with the devastation from Hurricane Ike.
Cuba receives some 93,000 barrels of oil per day from Venezuela, which amounts to 50 percent of its consumption together with that produced on the island, basically used for generating electricity.
The island pays for part of the Venezuelan oil shipments with services that both countries evaluate according to market criteria, and which include medical treatment plus consultancy and training by technicians and experts in the fields of education and athletics.
The fuel-price increases come at a time when Cuba is going through one of its worst recessions in recent decades.
The median monthly income in Cuba is equivalent to roughly $17.
September 27, 2010 - SANTIAGO: Chile Generator Colbun Aims To Expand Capacity 63% By 2015 (CHILE)
Source: Dow Jones
Chilean power generator Colbun SA (COLBUN.SN) plans to increase its installed capacity by 63% by 2015, the company said late Monday.
The expansion plan comes to keep up with electricity demand on the central SIC grid, Chile's largest, which is forecast to grow around 5.7% annually over the next five years.
Colbun, currently the second largest generator on the SIC grid, expects to expand capacity from 2,620 megawatts to 4,278 mw, according to a company presentation.
The SIC grid supplies energy to over 90% of the Andean nation's population and covers an area from northern Tal Tal to the southern island of Chiloe.
Over the next five years, Colbun also plans to invert its current mix of installed capacity to 52% hydroelectric and 48% thermoelectric, from 52% thermoelectric and 48% hydroelectric currently.
The projects slated to come online by 2015 include the 150 mw San Pedro and 316 mw Angostura hydroelectric projects, the 342 mw Santa Maria I and 350 mw Santa Maria II coal-fired projects, and some 500 mw in non-conventional, renewable energy sources, such as geothermal, wind, biomass and small-scale hydroelectric.
Colbun's expansion plans don't consider the $3.2 billion HidroAysen hydroelectric joint venture project in Chile's far south, which it is developing with power-generator Empresa Nacional de Electricidad SA (EOC, ENDESA.SN).
The 2,750 mw hydropower project, which opponents criticize because it includes plans to lay a 2,000-kilometer (1,240 miles) transmission line through pristine land and to dam both the Baker and Pascua rivers, has yet to receive environmental approval.
The expansion plan comes to keep up with electricity demand on the central SIC grid, Chile's largest, which is forecast to grow around 5.7% annually over the next five years.
Colbun, currently the second largest generator on the SIC grid, expects to expand capacity from 2,620 megawatts to 4,278 mw, according to a company presentation.
The SIC grid supplies energy to over 90% of the Andean nation's population and covers an area from northern Tal Tal to the southern island of Chiloe.
Over the next five years, Colbun also plans to invert its current mix of installed capacity to 52% hydroelectric and 48% thermoelectric, from 52% thermoelectric and 48% hydroelectric currently.
The projects slated to come online by 2015 include the 150 mw San Pedro and 316 mw Angostura hydroelectric projects, the 342 mw Santa Maria I and 350 mw Santa Maria II coal-fired projects, and some 500 mw in non-conventional, renewable energy sources, such as geothermal, wind, biomass and small-scale hydroelectric.
Colbun's expansion plans don't consider the $3.2 billion HidroAysen hydroelectric joint venture project in Chile's far south, which it is developing with power-generator Empresa Nacional de Electricidad SA (EOC, ENDESA.SN).
The 2,750 mw hydropower project, which opponents criticize because it includes plans to lay a 2,000-kilometer (1,240 miles) transmission line through pristine land and to dam both the Baker and Pascua rivers, has yet to receive environmental approval.
September 27, 2010 - SANTIAGO: Govt disappointed at investment in private power (CHILE)
Source: Times
Source: Times
Speaking at a wind energy seminar in Johannesburg, she said government had committed itself in 2006 to a target of a minimum of 30 percent participation by the private sector in the electricity generation industry.
This commitment was born out of the realisation that it was critical for Independent Power Producers (IPPs) to complement electricity generated by national utility, Eskom, to enable the country to achieve the goal of ensuring energy security.
"We have, however, noted with serious concerns that investment by the private sector has not happened at the magnitude that was originally envisaged," Peters said.
"As government, we are continuously evaluating our policies and are working tirelessly to create an environment that is conducive for IPPs to enter the electricity market and provide the much needed power to complement and boost up Eskom's capacity."
At the beginning of the year, President Jacob Zuma established an Inter-Ministerial Committee (IMC) on Energy to finalise policy decisions on this matter.
Work had progressed well in this regard and the IMC was in the process of reporting back to Cabinet on its proposals, she said.
The energy department was in the process of facilitating the establishment of an Independent System and Market Operator (ISMO) to facilitate the procurement of power from IPPs.
The ISMO was intended to level the playing field and eliminate conflict of interest between the buyer and the seller of electricity in a manner that protected all players from potential market abuse.
The department was working closely with other key government institutions, such as the National Energy Regulator, Eskom and the National Treasury to ensure that processes for IPPs were streamlined, Peters said.
This commitment was born out of the realisation that it was critical for Independent Power Producers (IPPs) to complement electricity generated by national utility, Eskom, to enable the country to achieve the goal of ensuring energy security.
"We have, however, noted with serious concerns that investment by the private sector has not happened at the magnitude that was originally envisaged," Peters said.
"As government, we are continuously evaluating our policies and are working tirelessly to create an environment that is conducive for IPPs to enter the electricity market and provide the much needed power to complement and boost up Eskom's capacity."
At the beginning of the year, President Jacob Zuma established an Inter-Ministerial Committee (IMC) on Energy to finalise policy decisions on this matter.
Work had progressed well in this regard and the IMC was in the process of reporting back to Cabinet on its proposals, she said.
The energy department was in the process of facilitating the establishment of an Independent System and Market Operator (ISMO) to facilitate the procurement of power from IPPs.
The ISMO was intended to level the playing field and eliminate conflict of interest between the buyer and the seller of electricity in a manner that protected all players from potential market abuse.
The department was working closely with other key government institutions, such as the National Energy Regulator, Eskom and the National Treasury to ensure that processes for IPPs were streamlined, Peters said.
September 27, 2010 - SANTIAGO: Chile Enap To Downsize Workforce To Cuts Costs, Turn Profit (CHILE)
Source: The Wall Street Journal
Source: The Wall Street Journal
Chilean state oil and gas company Empresa Nacional del Petroleo SA, or Enap, will lay off part of its workforce shortly as part of its plans to cuts costs and turn a profit this year, a company spokeswoman said Tuesday.
For the first half of the year Enap posted a $78 million net loss after its Aconcagua and Bio Bio refineries suffered extensive damages and temporarily halted operations because of a massive February earthquake. Enap managed to turn around a $956 million loss it suffered in 2008 and posted a net profit of $242 million in 2009.
"The final list of how many workers will be let go isn't defined yet, but we will have that information soon. The plan for the layoffs was unanimously approved by the board," said the spokeswoman.
Local press reports in daily newspapers El Mercurio and La Tercera, however, estimate some 500 to 530 workers will be laid off.
Enap supplies about 80% of Chile's fuel needs and exports refined products to Peru, Ecuador and Central America.
For the first half of the year Enap posted a $78 million net loss after its Aconcagua and Bio Bio refineries suffered extensive damages and temporarily halted operations because of a massive February earthquake. Enap managed to turn around a $956 million loss it suffered in 2008 and posted a net profit of $242 million in 2009.
"The final list of how many workers will be let go isn't defined yet, but we will have that information soon. The plan for the layoffs was unanimously approved by the board," said the spokeswoman.
Local press reports in daily newspapers El Mercurio and La Tercera, however, estimate some 500 to 530 workers will be laid off.
Enap supplies about 80% of Chile's fuel needs and exports refined products to Peru, Ecuador and Central America.
September 28, 2010 - QUITO: UN backs Ecuador's Amazon proposal Comments (ECUADOR)
Source: Postmedia News
Ecuador wants US$3.6-billion from the world's richest governments in exchange for not drilling for oil in the Amazon, and Canada may be among countries being targeted for cash.
The United Nations is strongly backing the proposal by the Ecuadorian government, which says the money would go toward alleviating poverty and advancing "alternative" energy sources such as wind and solar power.
Addressing the UN General Assembly yesterday, Lenin Moreno Garces, Ecuador's Vice-President, said the country could make twice as much money if it exploited the huge oil reserves beneath Yasuni National Park. He warned that if Ecuador does not get the money, it will begin drilling.
"By the end of 2011, if we haven't received at least $100-million, we will have to go to Plan B and extract the oil," Mr. Moreno said.
Yasuni -- a million-hectare tropical rainforest at the intersection of the Andes, the Amazon and the Equator -- is home to various indigenous tribes who live in isolation and hundreds, if not thousands, of species of trees and plants. UNESCO, the UN's educational, scientific and cultural agency, declared the park a world biosphere reserve in 1989. But Yasuni also sits on top of Ecuador's largest proven heavy crude reserves, estimated at 846 million barrels.
Exploiting the oil field would bring contamination, deforestation and the extinction of cultures, critics say. Ecuador says that if it exploited the reserves it could make US$7-billion.
Mr. Moreno argued that in handing over the cash it would give the world a chance to "assess the value of lifestyle of the Amazon peoples" while saving the atmosphere from being filled with 407 million tonnes of temperature-raising carbon dioxide if the oil were burned.
"Ecuador has decided not to receive 50% of the potential income that oil will generate just as long as the international community makes a similar effort to our own," Mr. Moreno said.
"I call on our fellow countries across the world -- especially the industrialized countries -- to support the Yasuni Initiative," which is focused on three oil fields on the park's eastern boundary.
Mr. Moreno signalled that rich countries have the "greatest responsibility" for contributing to the fund, with Canada among those in the targeted group.
An agreement Ecuador signed in August 2009 with the UN's Development Program says donors could have 13 years to pay the entire contribution.
"There is nothing around this wonderful decision taken by the people of Ecuador and the government that is not wonderful," said Rebeca Grynspan, UNDP associate administrator, who signed the agreement on behalf of the UN agency.
"We are totally convinced in UNDP that the sustainable development, environment and climate change are totally interlinked with the objectives of poverty eradication and human development," she added.
Ms. Grynspan also spoke of Ecuador's "guarantees" that
a future Ecuadorian government would not exploit the oil after donors hand over the US$3.6-billion -- expressing UNDP's confidence in certificates Ecuador plans to issue that promise refunds in the event of drilling.
Canada is contributing to other climate-change initiatives, and "isn't in a position" to give directly to the Yasuni fund, said Meredith McDonald, spokeswoman for Peter Kent, Secretary of State for Foreign Affairs of the Americas.
But while some critics have charged the scheme is little more than a way to effect a major cash transfer from the developed to developing world, environmental activists in many Western countries are lobbying for their respective governments to participate.
Mr. Moreno said Ecuador intends to "follow up on commitments" from Belgium, Spain, Italy, Turkey and China, while Chile had already made a "symbolic contribution of $100,000." .
September 25, 2010 - QUITO: Celec launches bidding for 190MW thermo (ECUADOR)
Source: Business News Americas
The United Nations is strongly backing the proposal by the Ecuadorian government, which says the money would go toward alleviating poverty and advancing "alternative" energy sources such as wind and solar power.
Addressing the UN General Assembly yesterday, Lenin Moreno Garces, Ecuador's Vice-President, said the country could make twice as much money if it exploited the huge oil reserves beneath Yasuni National Park. He warned that if Ecuador does not get the money, it will begin drilling.
"By the end of 2011, if we haven't received at least $100-million, we will have to go to Plan B and extract the oil," Mr. Moreno said.
Yasuni -- a million-hectare tropical rainforest at the intersection of the Andes, the Amazon and the Equator -- is home to various indigenous tribes who live in isolation and hundreds, if not thousands, of species of trees and plants. UNESCO, the UN's educational, scientific and cultural agency, declared the park a world biosphere reserve in 1989. But Yasuni also sits on top of Ecuador's largest proven heavy crude reserves, estimated at 846 million barrels.
Exploiting the oil field would bring contamination, deforestation and the extinction of cultures, critics say. Ecuador says that if it exploited the reserves it could make US$7-billion.
Mr. Moreno argued that in handing over the cash it would give the world a chance to "assess the value of lifestyle of the Amazon peoples" while saving the atmosphere from being filled with 407 million tonnes of temperature-raising carbon dioxide if the oil were burned.
"Ecuador has decided not to receive 50% of the potential income that oil will generate just as long as the international community makes a similar effort to our own," Mr. Moreno said.
"I call on our fellow countries across the world -- especially the industrialized countries -- to support the Yasuni Initiative," which is focused on three oil fields on the park's eastern boundary.
Mr. Moreno signalled that rich countries have the "greatest responsibility" for contributing to the fund, with Canada among those in the targeted group.
An agreement Ecuador signed in August 2009 with the UN's Development Program says donors could have 13 years to pay the entire contribution.
"There is nothing around this wonderful decision taken by the people of Ecuador and the government that is not wonderful," said Rebeca Grynspan, UNDP associate administrator, who signed the agreement on behalf of the UN agency.
"We are totally convinced in UNDP that the sustainable development, environment and climate change are totally interlinked with the objectives of poverty eradication and human development," she added.
Ms. Grynspan also spoke of Ecuador's "guarantees" that
a future Ecuadorian government would not exploit the oil after donors hand over the US$3.6-billion -- expressing UNDP's confidence in certificates Ecuador plans to issue that promise refunds in the event of drilling.
Canada is contributing to other climate-change initiatives, and "isn't in a position" to give directly to the Yasuni fund, said Meredith McDonald, spokeswoman for Peter Kent, Secretary of State for Foreign Affairs of the Americas.
But while some critics have charged the scheme is little more than a way to effect a major cash transfer from the developed to developing world, environmental activists in many Western countries are lobbying for their respective governments to participate.
Mr. Moreno said Ecuador intends to "follow up on commitments" from Belgium, Spain, Italy, Turkey and China, while Chile had already made a "symbolic contribution of $100,000." .
September 25, 2010 - QUITO: Celec launches bidding for 190MW thermo (ECUADOR)
Source: Business News Americas
Ecuador's state power generation holding company Celec has issued a call for bids to supply and install 190MW of thermo capacity.
The reference price is US$225mn, according to bidding rules.
Offers are due by November 23 and the contract will be awarded in December. The winner will have 330 days to carry out the work.
The capacity will be for Santa Elena (30MW), Jivino (30MW) and Jaramijo (130MW).
Units for Santa Elena and Jivino must have capacity greater than or equal to 3.5MW, and greater or equal to 5MW for Jaramijo, and all must be able to use fuel oil number 6 produced at state oil company Petroecuador's Esmeraldas refinery.
For procurement information, in Spanish, go to this link
The launch of bidding follows a similar call by Celec earlier this year to supply 380MW of thermo to offset possible power supply deficits during drought periods. Companies Equitatis and TSK Electronica y Electricidad won contracts in the previous process.
Of the 1.43TWh injected into Ecuador's grid last month, 946GWh came from hydro, 429GWh from thermo and 51.1GWh from Colombia, according to wholesale power market administrator Cenace. Consumption hit 1.37TWh.
The reference price is US$225mn, according to bidding rules.
Offers are due by November 23 and the contract will be awarded in December. The winner will have 330 days to carry out the work.
The capacity will be for Santa Elena (30MW), Jivino (30MW) and Jaramijo (130MW).
Units for Santa Elena and Jivino must have capacity greater than or equal to 3.5MW, and greater or equal to 5MW for Jaramijo, and all must be able to use fuel oil number 6 produced at state oil company Petroecuador's Esmeraldas refinery.
For procurement information, in Spanish, go to this link
The launch of bidding follows a similar call by Celec earlier this year to supply 380MW of thermo to offset possible power supply deficits during drought periods. Companies Equitatis and TSK Electronica y Electricidad won contracts in the previous process.
Of the 1.43TWh injected into Ecuador's grid last month, 946GWh came from hydro, 429GWh from thermo and 51.1GWh from Colombia, according to wholesale power market administrator Cenace. Consumption hit 1.37TWh.
September 28, 2010 - QUITO: Ecuador urges Canada to help limit drilling (ECUADOR)
Source: Postmedia News
Source: Postmedia News
Ecuador won strong new United Nations backing Monday as the South American country pushed for rich countries to give it as much as $3.6 billion in exchange for not drilling for oil in the Amazon.
Canada is among countries the UN and Ecuador are targeting to contribute to a fund that the Ecuadorean government says it will spend on alleviating poverty and development of "renewable" energy sources, such as wind and solar power.
The UN says the cash would enable the preservation of the Yasuni National Park -- a million-hectare tropical rainforest at the intersection of the Andes, the Amazon and the equator.
The region is home to various indigenous tribes who live in isolation and hundreds, if not thousands, of different species of trees and plants.
UNESCO, the UN's educational, scientific and cultural agency, declared the park a world biosphere reserve in 1989.
But Yasuni also sits atop Ecuador's largest proven heavy crude reserves, estimated at 846 million barrels.
Addressing the UN General Assembly on Monday, Lenin Moreno Garces, Ecuador's vice-president, spoke of the "generosity" of the Ecuadorean people, saying the country could make twice as much money if it were to exploit the reserves.
He argued that handing over the cash would give the world a chance to "assess the value of lifestyle of the Amazon peoples" while saving the atmosphere from being filled with 407 million tonnes of temperature-raising carbon dioxide if the oil were burned.
"Ecuador has decided not to receive 50 per cent of the potential income that oil will generate just as long as the international community makes a similar effort to our own," said Moreno.
"I call on our fellow countries across the world -- especially the industrialized countries -- to support the Yasuni Initiative," which is focused on three oilfields on the park's eastern boundary.
At a news conference, Moreno signalled that the rich countries have the "greatest responsibility" for contributing to the fund -- and warned that if Ecuador does not get the money, it would begin drilling.
"By the end of 2011, if we haven't received at least $100 million, we will have to go to Plan B and extract the oil," Moreno said.
He also raised the spectre of environmental damage should there be an accident, giving the example of the oil spill in the Gulf of Mexico as evidence "you can never be certain there's not going to be contamination."
"The lower part of the Amazon forest is swampy ground, and you could imagine [the] ecological disaster [that] would [result]."
But he vowed that Ecuador would "employ the very latest technology" to minimize any ecological damage.
An agreement Ecuador signed in August 2009 with the UN's Development Program says donors could have 13 years to pay the entire contribution.
"There is nothing around this wonderful decision taken by the people of Ecuador and the government that is not wonderful," said Rebeca Grynspan, UNDP associate administrator, who signed the agreement on behalf of the UN agency.
"We are totally convinced in UNDP that the sustainable development, environment and climate change are totally interlinked with the objectives of poverty eradication and human development," she added.
Canada is contributing to other climate-change initiatives, and "isn't in a position" to give directly to the Yasuni fund, said Meredith McDonald, spokeswoman for Peter Kent, secretary of state for foreign affairs of the Americas.
But while some critics have charged the scheme is little more than an innovative way to effect a major cash transfer from the developed to developing world, environmental activists in many Western countries are lobbying for their respective governments to participate.
Moreno said Ecuador intends to "follow up on commitments" from Belgium, Spain, Italy, Turkey and China, while Chile had already made a "symbolic" contribution of $100,000.
Canada is among countries the UN and Ecuador are targeting to contribute to a fund that the Ecuadorean government says it will spend on alleviating poverty and development of "renewable" energy sources, such as wind and solar power.
The UN says the cash would enable the preservation of the Yasuni National Park -- a million-hectare tropical rainforest at the intersection of the Andes, the Amazon and the equator.
The region is home to various indigenous tribes who live in isolation and hundreds, if not thousands, of different species of trees and plants.
UNESCO, the UN's educational, scientific and cultural agency, declared the park a world biosphere reserve in 1989.
But Yasuni also sits atop Ecuador's largest proven heavy crude reserves, estimated at 846 million barrels.
Addressing the UN General Assembly on Monday, Lenin Moreno Garces, Ecuador's vice-president, spoke of the "generosity" of the Ecuadorean people, saying the country could make twice as much money if it were to exploit the reserves.
He argued that handing over the cash would give the world a chance to "assess the value of lifestyle of the Amazon peoples" while saving the atmosphere from being filled with 407 million tonnes of temperature-raising carbon dioxide if the oil were burned.
"Ecuador has decided not to receive 50 per cent of the potential income that oil will generate just as long as the international community makes a similar effort to our own," said Moreno.
"I call on our fellow countries across the world -- especially the industrialized countries -- to support the Yasuni Initiative," which is focused on three oilfields on the park's eastern boundary.
At a news conference, Moreno signalled that the rich countries have the "greatest responsibility" for contributing to the fund -- and warned that if Ecuador does not get the money, it would begin drilling.
"By the end of 2011, if we haven't received at least $100 million, we will have to go to Plan B and extract the oil," Moreno said.
He also raised the spectre of environmental damage should there be an accident, giving the example of the oil spill in the Gulf of Mexico as evidence "you can never be certain there's not going to be contamination."
"The lower part of the Amazon forest is swampy ground, and you could imagine [the] ecological disaster [that] would [result]."
But he vowed that Ecuador would "employ the very latest technology" to minimize any ecological damage.
An agreement Ecuador signed in August 2009 with the UN's Development Program says donors could have 13 years to pay the entire contribution.
"There is nothing around this wonderful decision taken by the people of Ecuador and the government that is not wonderful," said Rebeca Grynspan, UNDP associate administrator, who signed the agreement on behalf of the UN agency.
"We are totally convinced in UNDP that the sustainable development, environment and climate change are totally interlinked with the objectives of poverty eradication and human development," she added.
Canada is contributing to other climate-change initiatives, and "isn't in a position" to give directly to the Yasuni fund, said Meredith McDonald, spokeswoman for Peter Kent, secretary of state for foreign affairs of the Americas.
But while some critics have charged the scheme is little more than an innovative way to effect a major cash transfer from the developed to developing world, environmental activists in many Western countries are lobbying for their respective governments to participate.
Moreno said Ecuador intends to "follow up on commitments" from Belgium, Spain, Italy, Turkey and China, while Chile had already made a "symbolic" contribution of $100,000.
September 28, 2010 - QUITO: Ecuador's Electrica de Guayaquil Selects Elster for Two-Way AMI Smart (ECUADOR)
Source: PRNewswire
Source: PRNewswire
Grid Deployment Ecuador's Largest Electric Utility to Deploy Elster's EnergyAxis for Improved Customer Service and Billing Processes Share
Elster announced today that Electrica de Guayaquil (EDG), the largest electric utility in Ecuador, has selected the Elster EnergyAxis® Smart Grid solution for one of South America's first two-way advanced metering infrastructure (AMI) deployments.
EDG will rely on Elster's EnergyAxis® to accelerate its billing process, more quickly respond to customer requests and reduce commercial losses.
EDG provides electric power services to more than 550,000 residents across Ecuador. For the initial phase of its Smart Grid project, the utility will deploy the Elster EnergyAxis® solution to more than 4,500 residential, commercial and industrial locations to enable remote meter reads, and will deploy more than 250 low voltage AGI nodes for load balance.
The two-way AMI deployment enables EDG to remotely connect/disconnect service using Smart Meters, reduce its time-to-response to customer service requests and gain real-time access to meter data to accelerate the billing process from 10 days down to one day.
"With its proven track record, including more than 80 AMI deployments across the globe, Elster EnergyAxis® was the clear choice," said Diego Sanchez, commercial manager, EDG.
"EDG is dedicated to improving energy efficiency and providing our customers with timely responses to all of their energy needs. Elster EnergyAxis® will be integrated across our existing IT infrastructure to enable enhanced customer services and near immediate identification of commercial losses," Sanchez added.
The Elster EnergyAxis® Smart Grid solution will be integrated with EDG's existing commercial applications, including the utility's geographic information system, to provide future Smart Grid benefits such as outage management and the ability to more efficiently deploy maintenance crews. EDG's Smart Grid AMI deployment relies on Elster's EnergyAxis® for radio communications technology that enables bi-directional mesh communication with each Smart Meter, helping to reduce operating costs.
"As an industry leader, Electrica de Guayaquil is showing great initiative in implementing one of South America's first Smart Grid projects involving two-way communications," said Mark Munday, president and CEO of Elster Solutions.
"Every Elster utility customer has unique technical requirements, but nearly identical goals—to improve energy efficiency and customer service. EnergyAxis® is specifically designed to meet the business needs of utilities with customized Smart Grid technology solutions," Munday added.
Elster announced today that Electrica de Guayaquil (EDG), the largest electric utility in Ecuador, has selected the Elster EnergyAxis® Smart Grid solution for one of South America's first two-way advanced metering infrastructure (AMI) deployments.
EDG will rely on Elster's EnergyAxis® to accelerate its billing process, more quickly respond to customer requests and reduce commercial losses.
EDG provides electric power services to more than 550,000 residents across Ecuador. For the initial phase of its Smart Grid project, the utility will deploy the Elster EnergyAxis® solution to more than 4,500 residential, commercial and industrial locations to enable remote meter reads, and will deploy more than 250 low voltage AGI nodes for load balance.
The two-way AMI deployment enables EDG to remotely connect/disconnect service using Smart Meters, reduce its time-to-response to customer service requests and gain real-time access to meter data to accelerate the billing process from 10 days down to one day.
"With its proven track record, including more than 80 AMI deployments across the globe, Elster EnergyAxis® was the clear choice," said Diego Sanchez, commercial manager, EDG.
"EDG is dedicated to improving energy efficiency and providing our customers with timely responses to all of their energy needs. Elster EnergyAxis® will be integrated across our existing IT infrastructure to enable enhanced customer services and near immediate identification of commercial losses," Sanchez added.
The Elster EnergyAxis® Smart Grid solution will be integrated with EDG's existing commercial applications, including the utility's geographic information system, to provide future Smart Grid benefits such as outage management and the ability to more efficiently deploy maintenance crews. EDG's Smart Grid AMI deployment relies on Elster's EnergyAxis® for radio communications technology that enables bi-directional mesh communication with each Smart Meter, helping to reduce operating costs.
"As an industry leader, Electrica de Guayaquil is showing great initiative in implementing one of South America's first Smart Grid projects involving two-way communications," said Mark Munday, president and CEO of Elster Solutions.
"Every Elster utility customer has unique technical requirements, but nearly identical goals—to improve energy efficiency and customer service. EnergyAxis® is specifically designed to meet the business needs of utilities with customized Smart Grid technology solutions," Munday added.
September 28, 2010 - MEXICO CITY: Mexico's Pemex Crude Output On The Rise For Most Of September (MEXICO)
Source: Dow Jones
Source: Dow Jones
Mexican state-owned oil company Petroleos Mexicanos, or Pemex, said Monday that crude production during the Sept. 1-26 period averaged 2.587 million barrels a day, compared with 2.559 million barrels a day for the full month of August.
Pemex said September oil production was led by the Ku-Maloob-Zaap complex of fields in the southern Gulf of Mexico, which reached 855,000 barrels a day on average, compared with 833,000 in August.
The company's offshore Cantarell complex, which has been in decline since 2004, produced 491,000 barrels a day in the September period, versus 495,000 barrels a day in August.
The onshore Chicontepec oil basin averaged 47,000 barrels a day from Sept. 1 through Sunday, Pemex said, compared with 45,000 barrels a day for full-month August.
The September production numbers are preliminary and subject to revision.
Pemex has repeatedly missed its targets for Chicontepec, which the company said earlier this year should be producing 60,000 barrels a day by December.
The state oil monopoly said last week that overall crude production for the first eight months of the year was 2.585 million barrels a day, or just short of its unofficial target of meeting or beating last year's output of 2.6 million barrels a day.
Pemex's official target for the year, as estimated in the federal budget, is 2.5 million barrels a day.
Pemex said September oil production was led by the Ku-Maloob-Zaap complex of fields in the southern Gulf of Mexico, which reached 855,000 barrels a day on average, compared with 833,000 in August.
The company's offshore Cantarell complex, which has been in decline since 2004, produced 491,000 barrels a day in the September period, versus 495,000 barrels a day in August.
The onshore Chicontepec oil basin averaged 47,000 barrels a day from Sept. 1 through Sunday, Pemex said, compared with 45,000 barrels a day for full-month August.
The September production numbers are preliminary and subject to revision.
Pemex has repeatedly missed its targets for Chicontepec, which the company said earlier this year should be producing 60,000 barrels a day by December.
The state oil monopoly said last week that overall crude production for the first eight months of the year was 2.585 million barrels a day, or just short of its unofficial target of meeting or beating last year's output of 2.6 million barrels a day.
Pemex's official target for the year, as estimated in the federal budget, is 2.5 million barrels a day.
September 27, 2010 - MEXICO CITY: Halliburton expects resumed Pemex activity based on budget request (MEXICO)
Source: Business News Americas
US oil field services provider Halliburton (NYSE: HAL) executives cited Mexican state oil company Pemex's request for increased budget as a sign that activity will recover in 2011 from budget cuts this year.
"We see Pemex trying to instill some budget discipline. They had overspent their budget in prior years; they're under spending this year to make it up. They've proposed a very robust budget, and the discussions that we continue to have with our customer suggest that activity will come back," company CFO Mark McCollum said in a webcast.
McCollum's comment, however, came just days after international press reported that Mexico's federal government proposed to congress a 2011 budget of 286bn pesos (US$22.6bn) for Pemex. The amount is 9% more than Pemex's 2010 budget, but 23.9% less than the state firm requested for 2011.
Tim Probert, president of global business lines and corporate development, said in the webcast he believes the restart of activity will be a combination of onshore and offshore work, though "Pemex is certainly not as well equipped to deal with deepwater activity."
Mexico's prospective resources total 56.6Bboe, of which 27.7Bboe are in water depths greater than 500m.
McCollum added that security issues related to drug cartel activity "could put a damper" on resumed activity in the northern region.
The executives spoke at the Barclays Capital CEO Energy-Power Conference in New York City.
"We see Pemex trying to instill some budget discipline. They had overspent their budget in prior years; they're under spending this year to make it up. They've proposed a very robust budget, and the discussions that we continue to have with our customer suggest that activity will come back," company CFO Mark McCollum said in a webcast.
McCollum's comment, however, came just days after international press reported that Mexico's federal government proposed to congress a 2011 budget of 286bn pesos (US$22.6bn) for Pemex. The amount is 9% more than Pemex's 2010 budget, but 23.9% less than the state firm requested for 2011.
Tim Probert, president of global business lines and corporate development, said in the webcast he believes the restart of activity will be a combination of onshore and offshore work, though "Pemex is certainly not as well equipped to deal with deepwater activity."
Mexico's prospective resources total 56.6Bboe, of which 27.7Bboe are in water depths greater than 500m.
McCollum added that security issues related to drug cartel activity "could put a damper" on resumed activity in the northern region.
The executives spoke at the Barclays Capital CEO Energy-Power Conference in New York City.
September 27, 2010 - MEXICO CITY: Mexico output dips (MEXICO)
Source: UPSTREAMONLINE
Source: UPSTREAMONLINE
Mexican oil production fell by 14,000 barrels per day in August from July but remained above the government's target for the year, state oil monopoly Pemex said today.
News wires 24 September 2010 21:39 GMT
Pemex produced 2.559 million bpd, down from 2.573 million bpd in July, the company said.
Total liquids production, which includes natural gas liquids and condensates, declined to 2.933 million bpd from 2.948 million bpd a month earlier.
Mexican oil production fell by nearly a quarter between 2004 and 2009, threatening the country's status as one of the world's principal crude exporters.
However Pemex has managed to slow the rate of decline at its giant Cantarell field since the second half of last year.
Pemex's own operating plan called for output of 2.478 million bpd in August, according to the National Hydrocarbons Commission, Mexico's oil and gas regulator.
Cantarell, in particular, has performed better than expected, according to a Reuters report.
The Cantarell unit produced just over 550,000 bpd in August, down from 552,000 bpd in July but far ahead of the 503,000 bpd predicted in Pemex's operating plan.
Company executives attribute the improved performance of Cantarell to increased rates of natural gas injection into the field and the drilling of new horizontal wells that allow less productive vertical wells to be shut down with little loss to output.
Mexican crude oil exports dipped slightly in August to 1.351 million bpd from 1.386 million bpd in July while gasoline imports declined to 355,800 bpd from 393,400 bpd, Pemex said.
Pemex also succeeded in boosting output at its troubled Chicontepec project to 45,000 bpd in August from 41,000 bpd in July.
The multibillion-dollar venture has been heavily criticised as a waste of money but Pemex has vowed to continue investing in the field.
Chicontepec remains behind schedule, however. Pemex's operational plans forecast output of nearly 54,000 bpd in August.
News wires 24 September 2010 21:39 GMT
Pemex produced 2.559 million bpd, down from 2.573 million bpd in July, the company said.
Total liquids production, which includes natural gas liquids and condensates, declined to 2.933 million bpd from 2.948 million bpd a month earlier.
Mexican oil production fell by nearly a quarter between 2004 and 2009, threatening the country's status as one of the world's principal crude exporters.
However Pemex has managed to slow the rate of decline at its giant Cantarell field since the second half of last year.
Pemex's own operating plan called for output of 2.478 million bpd in August, according to the National Hydrocarbons Commission, Mexico's oil and gas regulator.
Cantarell, in particular, has performed better than expected, according to a Reuters report.
The Cantarell unit produced just over 550,000 bpd in August, down from 552,000 bpd in July but far ahead of the 503,000 bpd predicted in Pemex's operating plan.
Company executives attribute the improved performance of Cantarell to increased rates of natural gas injection into the field and the drilling of new horizontal wells that allow less productive vertical wells to be shut down with little loss to output.
Mexican crude oil exports dipped slightly in August to 1.351 million bpd from 1.386 million bpd in July while gasoline imports declined to 355,800 bpd from 393,400 bpd, Pemex said.
Pemex also succeeded in boosting output at its troubled Chicontepec project to 45,000 bpd in August from 41,000 bpd in July.
The multibillion-dollar venture has been heavily criticised as a waste of money but Pemex has vowed to continue investing in the field.
Chicontepec remains behind schedule, however. Pemex's operational plans forecast output of nearly 54,000 bpd in August.
September 27, 2010 - LIMA: BPZ says Peru well denied testing permit again (PERU)
Source: Business Week
Shares of BPZ Resources Inc. fell sharply Monday after the oil and gas company said it again was denied an extended well testing permit for one of its wells in Peru's Corvina field.
The CX11-19D well, which has been shut in since mid-June, has again been denied the needed EWT permit to continue testing until Nov. 30, the date of first commercial production in Corvina. The well will remain closed for another 60 days as the Houston-based company installs gas and water re-injection facilities.
The company also said it has completed a well in Corvina that initially is producing about 1,500 barrels of oil per day.
"The sustained initial production from the new Corvina well comes at an important time for the company," Manolo Zuniga, CEO and president, said in a statement. "We are disappointed that we did not receive a positive response to our request to re-establish testing from the 19D in Corvina, highlighting the importance of the results from the 23D well."
BPZ has licenses for oil and gas exploration and production on 2.2 million acres of four properties in northwest Peru. The company said its A-17D well in Albacora remains in the testing phase. The company has yet to bring crude oil to surface from the zones tested to date but is testing additional zones to determine whether or not the well can be produced.
Shares of BPZ closed Monday at $3.70, down 47 cents or 11.3 percent. They have traded in a 52-week range of $3.03 to $9.98.
The CX11-19D well, which has been shut in since mid-June, has again been denied the needed EWT permit to continue testing until Nov. 30, the date of first commercial production in Corvina. The well will remain closed for another 60 days as the Houston-based company installs gas and water re-injection facilities.
The company also said it has completed a well in Corvina that initially is producing about 1,500 barrels of oil per day.
"The sustained initial production from the new Corvina well comes at an important time for the company," Manolo Zuniga, CEO and president, said in a statement. "We are disappointed that we did not receive a positive response to our request to re-establish testing from the 19D in Corvina, highlighting the importance of the results from the 23D well."
BPZ has licenses for oil and gas exploration and production on 2.2 million acres of four properties in northwest Peru. The company said its A-17D well in Albacora remains in the testing phase. The company has yet to bring crude oil to surface from the zones tested to date but is testing additional zones to determine whether or not the well can be produced.
Shares of BPZ closed Monday at $3.70, down 47 cents or 11.3 percent. They have traded in a 52-week range of $3.03 to $9.98.
September 27, 2010 - LIMA: Natural gas in Peru and the Camisea controversy! (PERU)
Source: Living in Peru
Source: Living in Peru
The natural gas industry in Peru has boomed since mid-2004, when natural gas from the Camisea Project, located in the Urubamba Basin in the southeastern Peruvian Amazon, began to flow. At approximately 1.7 billion USD, Peru’s Camisea Project represents the largest investment in the country’s history. Since the project’s 2004 launch, according to an Oxfam report published in July of 2010, Camisea has been satisfying part of the external market demand for natural gas, albeit at alarmingly low prices dictated by the existing contract. These low prices, along with the sub-par royalties awarded to Peru in comparison to other gas-exporting Latin American countries, have become a liability for the Peruvian economy. Indeed, in terms of natural gas exports, Peru is currently not getting a fair deal.
While high domestic natural gas prices act as a deterrent to domestic industries and individual consumers, low royalties charged by the government to foreign exporters mean a paucity of compensation for what some see as the usurpation of Peru’s natural resources. Consequently, President Alan García’s administration now must contend with a good deal of political and social pressure to increase export gas prices in order to reverse this trend of inadequate compensation.
At the same time, there is counter-pressure from both foreign and domestic investment firms that insist upon the fixed low prices ordained by the prior contract. Negotiations for an increase in the price of exported natural gas will therefore prove to be tricky, if not entirely out of the question. Government leaders and political elites justify the low natural gas export prices as necessary to promote economic growth, pointing to the unyielding benefits of overall trade and foreign investments as an illustration of the positive impact that such low prices have on the economy.
Nevertheless, the dilatory and seemingly unconcerned attitude on the part of Peruvian government officials demonstrates their unwillingness to take a more comprehensive view of the nation’s prospective economic growth, and its potentially critical social, economic, and environmental impact on the state.
While high domestic natural gas prices act as a deterrent to domestic industries and individual consumers, low royalties charged by the government to foreign exporters mean a paucity of compensation for what some see as the usurpation of Peru’s natural resources. Consequently, President Alan García’s administration now must contend with a good deal of political and social pressure to increase export gas prices in order to reverse this trend of inadequate compensation.
At the same time, there is counter-pressure from both foreign and domestic investment firms that insist upon the fixed low prices ordained by the prior contract. Negotiations for an increase in the price of exported natural gas will therefore prove to be tricky, if not entirely out of the question. Government leaders and political elites justify the low natural gas export prices as necessary to promote economic growth, pointing to the unyielding benefits of overall trade and foreign investments as an illustration of the positive impact that such low prices have on the economy.
Nevertheless, the dilatory and seemingly unconcerned attitude on the part of Peruvian government officials demonstrates their unwillingness to take a more comprehensive view of the nation’s prospective economic growth, and its potentially critical social, economic, and environmental impact on the state.
September 28, 2010 - LIMA: Perenco budgets US$211mn for block 67 exploration campaign -(PERU)
Source: Business News Americas
Source: Business News Americas
Independent oil and gas company Perenco has submitted an EIS to Peru's energy and mines ministry for an exploration program on block 67.
The work entails the construction of eight platforms and the drilling of 18 exploratory wells, according to the document.
One platform will be built in the Paiche field, four in Dorado and three in Piraña, with two wells to be drilled from each platform. Each well will cost US$13.2mn.
Perenco has penciled in the third quarter of next year as the start of the exploration campaign.
Block 67 covers 101,931ha in the Marañon basin, Loreto region, and boasts reserves of more than 300Mb.
In Peru, the company also holds a stake in block 121.
The work entails the construction of eight platforms and the drilling of 18 exploratory wells, according to the document.
One platform will be built in the Paiche field, four in Dorado and three in Piraña, with two wells to be drilled from each platform. Each well will cost US$13.2mn.
Perenco has penciled in the third quarter of next year as the start of the exploration campaign.
Block 67 covers 101,931ha in the Marañon basin, Loreto region, and boasts reserves of more than 300Mb.
In Peru, the company also holds a stake in block 121.
September 27, 2010 - CARACAS: BPZ tots up Corvina test (VENEZUELA)
Source: UPSTREAMONLINE
US explorer BPZ Resources said the CX11-23D well came on at a sustained initial production rate of about 1500 barrels of oil per day (Bopd).
It is the last well slated to be drilled from the CX-11 platform in the Corvina field offshore Peru.
The rig has been taken off the platform to make way for production facilities and gas and water re-injection.
BPZ plans to bring its Corvina field online at the end of November.
The Peruvian government denied BPZ’s request for reconsideration of an extended well testing permit for the Corvina 19D well.
The Corvina 19D, which has been shut in since mid-June, will remain closed until the gas and water re-injection facilities are installed and commissioned at the CX-11 platform.
BPZ is continuing testing at the A-17D well in the nearby Albacora field.
The company has not brought crude oil to surface from the zones tested to date and is testing additional zones to determine whether or not the well can is commercial, BPZ said in a release.
"Currently we are testing oil at approximately 4500 barrels of oil per day from Corvina and Albacora,” BPZ boss Manolo Zuniga said in a release.
“We have completed moving the rig off the Corvina platform and have already installed some of the necessary equipment needed to meet the 30 November 2010 date of first commercial production in Corvina.”
It is the last well slated to be drilled from the CX-11 platform in the Corvina field offshore Peru.
The rig has been taken off the platform to make way for production facilities and gas and water re-injection.
BPZ plans to bring its Corvina field online at the end of November.
The Peruvian government denied BPZ’s request for reconsideration of an extended well testing permit for the Corvina 19D well.
The Corvina 19D, which has been shut in since mid-June, will remain closed until the gas and water re-injection facilities are installed and commissioned at the CX-11 platform.
BPZ is continuing testing at the A-17D well in the nearby Albacora field.
The company has not brought crude oil to surface from the zones tested to date and is testing additional zones to determine whether or not the well can is commercial, BPZ said in a release.
"Currently we are testing oil at approximately 4500 barrels of oil per day from Corvina and Albacora,” BPZ boss Manolo Zuniga said in a release.
“We have completed moving the rig off the Corvina platform and have already installed some of the necessary equipment needed to meet the 30 November 2010 date of first commercial production in Corvina.”
September 28, 2010 - CARACAS: Venezuela considering nuclear energy (VENEZUELA)
Source: Press TV
Source: Press TV
Russian President Dimitri Medvedev (L) and Hugo Chavez. Russia has said it will help Venezuela acquire the technology for a nuclear energy program.Venezuelan President Hugo Chavez says that his government has begun studying the prospects of a nuclear energy program.
Chavez stated during a news conference on Monday that, "We're taking on the project of nuclear energy for peaceful purposes, and they aren't going to stop us," the Associated Press reported.
He added that the country needs nuclear energy for medical purposes and electricity generation, Reuters reported.
Chavez also defended Iran's right to produce nuclear energy for civil purposes, reiterating that Iran is not pursuing a military agenda through its nuclear program.
The NY Daily News previously reported that Russia and Venezuela have formed a joint atomic energy commission to look into the country's nuclear capabilities, as a nuclear energy program would require technological expertise and cost billions of dollars.
France has also made a bid to join the project.
"We're going to develop nuclear energy with peaceful aims as Brazil and Argentina have," Chavez said.
Chavez stated during a news conference on Monday that, "We're taking on the project of nuclear energy for peaceful purposes, and they aren't going to stop us," the Associated Press reported.
He added that the country needs nuclear energy for medical purposes and electricity generation, Reuters reported.
Chavez also defended Iran's right to produce nuclear energy for civil purposes, reiterating that Iran is not pursuing a military agenda through its nuclear program.
The NY Daily News previously reported that Russia and Venezuela have formed a joint atomic energy commission to look into the country's nuclear capabilities, as a nuclear energy program would require technological expertise and cost billions of dollars.
France has also made a bid to join the project.
"We're going to develop nuclear energy with peaceful aims as Brazil and Argentina have," Chavez said.
September 27, 2010 - CARACAS: Venezuela gives BP go-ahead to sell BP (VENEZUELA)
Source: The Telegraph
Source: The Telegraph
Venezuela gives BP go-ahead to sell BP has been given the go-ahead to sell its Venezuelan oil assets as part of a $30bn (£19bn) disposal programme to meet part of the cost of the Gulf of Mexico oil disaster.
Comment
BP shareholders registered their protest against a 15pc discretionary bonus awarded to directors Photo: PA Rafael Ramirez, Venezuelan oil minister, said: "They consulted us, asked if we had a problem and we said no. Of course we have to see and to review what they present us with."
The assets – minority stakes in two joint exploration and production ventures with PDVSA, the state oil company, along with an interest in heavy oil – are estimated to be valued at up to $1bn and represent a minor but difficult part of the break-up programme.
Related Articles Venezuela opposition surpasses expectations in parliamentary elections BP well spill hit 4.4m barrels BP shares 'cheap', says legendary T Boone Pickens BP searches for new head of PR BP oil spill report paves way for bitter legal battle BP oil spill: BP says Tony Hayward to stay as chief executiveForeign oil companies are unwelcome in a country where president Hugo Chavez has taken control of key parts of the economy. PDVSA is seen as the most likely buyer of BP's holdings but some analysts feel TNK-BP may be acceptable.
The one-time stormy Anglo-Russian joint venture in which BP has a 50pc stake is said to be interested in buying BP assets in Vietnam, Venezuela and Algeria.
Relations between the sides have improved since Bob Dudley, former TNK-BP boss, was kicked out of Russia and any asset deals are seen as helping both sides.
BP has raised about a third of the money it wants from the sales, largely from disposing of interests in Egypt, Canada and Colombia. Pakistan and Vietnam are also on the list and there is speculation that the interests in Alaska's Prudhoe Bay and Argentina will be packaged for sale.
Meanwhile, Kenneth Feinberg, administrator of the $20bn fund provided by BP to compensate victims of the disaster, is to start making bigger payments faster to counter complaints from businesses suffering losses as a result of the oil spill.
So far he has handed out $400m to meet 30,000 claims but has been told he is being too slow. "I am implementing new procedures that will make this programme more efficient and more generous," he said.
Comment
BP shareholders registered their protest against a 15pc discretionary bonus awarded to directors Photo: PA Rafael Ramirez, Venezuelan oil minister, said: "They consulted us, asked if we had a problem and we said no. Of course we have to see and to review what they present us with."
The assets – minority stakes in two joint exploration and production ventures with PDVSA, the state oil company, along with an interest in heavy oil – are estimated to be valued at up to $1bn and represent a minor but difficult part of the break-up programme.
Related Articles Venezuela opposition surpasses expectations in parliamentary elections BP well spill hit 4.4m barrels BP shares 'cheap', says legendary T Boone Pickens BP searches for new head of PR BP oil spill report paves way for bitter legal battle BP oil spill: BP says Tony Hayward to stay as chief executiveForeign oil companies are unwelcome in a country where president Hugo Chavez has taken control of key parts of the economy. PDVSA is seen as the most likely buyer of BP's holdings but some analysts feel TNK-BP may be acceptable.
The one-time stormy Anglo-Russian joint venture in which BP has a 50pc stake is said to be interested in buying BP assets in Vietnam, Venezuela and Algeria.
Relations between the sides have improved since Bob Dudley, former TNK-BP boss, was kicked out of Russia and any asset deals are seen as helping both sides.
BP has raised about a third of the money it wants from the sales, largely from disposing of interests in Egypt, Canada and Colombia. Pakistan and Vietnam are also on the list and there is speculation that the interests in Alaska's Prudhoe Bay and Argentina will be packaged for sale.
Meanwhile, Kenneth Feinberg, administrator of the $20bn fund provided by BP to compensate victims of the disaster, is to start making bigger payments faster to counter complaints from businesses suffering losses as a result of the oil spill.
So far he has handed out $400m to meet 30,000 claims but has been told he is being too slow. "I am implementing new procedures that will make this programme more efficient and more generous," he said.
Venezuela's PDVSA to issue $3 bln bond in early Oct (VENEZUELA)
Source: PETROLEUMWORLD
Source: PETROLEUMWORLD
Venezuela's state oil company PDVSA will issue a $3 billion bond in the first two weeks of October, the firm said in a statement on Thursday.
President Hugo Chavez had said last month that PDVSA would soon issue a $2 billion bond, but market sources said recently that they expected the size to be increased to $3 billion.
PDVSA said the paper would be issued through the Central Bank's foreign exchange system, SITME, and that investors could buy it in the local bolivar currency and sell it for dollars.
"The issue is planned for the first two weeks of October," the company said in its statement.
Venezuelan Oil Minister and PDVSA boss Rafael Ramirez said the bond's terms and conditions, as well as its prospectus, would be published soon, probably on Sept. 27th or 28th.
"It's an issue that is open to the public and it is very important that it is being made through SITME ... which guarantees a fair exchange rate for users of the currency system," Ramirez told state television.
The Finance Ministry also issued a $3 billion sovereign bond last month, which offered a very high coupon and was heavily oversubscribed. [ID:nN16259736]
South America's biggest oil producer is one of the few countries to often issue debt for foreign exchange purposes.
The dollar has been in short supply for importers unable to access government-allocated hard currency under strict capital controls that were imposed in 2003 by Chavez.
His government has been battling a second year of recession ahead of legislative elections on Sunday. [ID:nVENEZUELA]
SITME, which began operating in June to replace an unregulated, "parallel" market, has been selling dollars at a rate of about 5.3 bolivars to a restricted group of buyers. Businesses are subject to limits of $50,000 per day and $350,000 per month.
Market players in Caracas said they expected the government had wanted to issue the new PDVSA bond ahead of this weekend's ballot to try to ease the pressure on local businesses.
"I think they just couldn't get it done because of campaigning, because everyone in the government had to go out and push and do whatever they have to do, speak, raise money," said Russ Dallen, head trader at BBO Financial Services.
He said SITME had also increased the amount of dollars it was selling to the market by between 20 percent and 25 percent during September to around $40 million a day.
"I think it's focused on the election ... They want to alleviate the shortages and put goods on the shelves, hoping that people will forget the hardships they've had," he said.
President Hugo Chavez had said last month that PDVSA would soon issue a $2 billion bond, but market sources said recently that they expected the size to be increased to $3 billion.
PDVSA said the paper would be issued through the Central Bank's foreign exchange system, SITME, and that investors could buy it in the local bolivar currency and sell it for dollars.
"The issue is planned for the first two weeks of October," the company said in its statement.
Venezuelan Oil Minister and PDVSA boss Rafael Ramirez said the bond's terms and conditions, as well as its prospectus, would be published soon, probably on Sept. 27th or 28th.
"It's an issue that is open to the public and it is very important that it is being made through SITME ... which guarantees a fair exchange rate for users of the currency system," Ramirez told state television.
The Finance Ministry also issued a $3 billion sovereign bond last month, which offered a very high coupon and was heavily oversubscribed. [ID:nN16259736]
South America's biggest oil producer is one of the few countries to often issue debt for foreign exchange purposes.
The dollar has been in short supply for importers unable to access government-allocated hard currency under strict capital controls that were imposed in 2003 by Chavez.
His government has been battling a second year of recession ahead of legislative elections on Sunday. [ID:nVENEZUELA]
SITME, which began operating in June to replace an unregulated, "parallel" market, has been selling dollars at a rate of about 5.3 bolivars to a restricted group of buyers. Businesses are subject to limits of $50,000 per day and $350,000 per month.
Market players in Caracas said they expected the government had wanted to issue the new PDVSA bond ahead of this weekend's ballot to try to ease the pressure on local businesses.
"I think they just couldn't get it done because of campaigning, because everyone in the government had to go out and push and do whatever they have to do, speak, raise money," said Russ Dallen, head trader at BBO Financial Services.
He said SITME had also increased the amount of dollars it was selling to the market by between 20 percent and 25 percent during September to around $40 million a day.
"I think it's focused on the election ... They want to alleviate the shortages and put goods on the shelves, hoping that people will forget the hardships they've had," he said.
September 26, 2010 - CARACAS: Venezuela PDVSA May Buy BP's Local Assets If Put Up For Sale (VENEZUELA)
Source: Dow Jones
Source: Dow Jones
Venezuela has granted oil giant BP PLC (BP, BP.LN) approval to negotiate the sale of its stakes in local oil projects, but said state-run oil company Petroleos de Venezuela, or PDVSA, may choose to be the buyer if there is a sale.
"We'll have to see the proposal...PDVSA would be interested" in BP's assets, said Rafael Ramirez, who is both Venezuela's energy minister and the president of PDVSA.
Ramirez reminded reporters that PDVSA and the Venezuelan government hold the so-called right to first refusal, meaning they have first dibs on any agreed-to asset sale in the country's energy sector.
BP PLC was in talks in late July to sell its stakes in oil projects in Venezuela to its Russian joint venture TNK-BP Ltd., part of a $30 billion asset-disposal program designed to help BP meet the costs of the Gulf of Mexico oil spill.
BP has minority stakes in two joint ventures, Petroperija and Boqueron, with state-owned Petroleos de Venezuela SA, or PDVSA, and is a partner in Petromonagas, which produces 110,000 barrels a day. The assets are estimated to be worth as much as $1 billion in total.
It's not clear whether BP would remain interested in brokering a sale of its assets if it is forced to sell to PDVSA rather than TNK-BP Ltd. or another firm. PDVSA's reputation in the oil business has suffered since President Hugo Chavez took power in Venezuela 11 years.
Chavez, a firebrand socialist, has transformed PDVSA significantly, steering much more of the company's revenues from oil sales toward pet social projects, which has left less to be used on new technology to increase oil production capacity. Chavez recently said he was officially changing the company's name to "Socialist PDVSA" to reflect that the company's objective is to help the people of Venezuela.
Another potential concern of BP's is that PDVSA has used the "right of first refusal" in the past, and it didn't turn out so well for the seller.
Anadarko Petroleum Corp. (APC) announced plans in early 2008 to sell its indirect 18% stake in Petroritupano, a joint venture in Venezuela with PDVSA and Brazil's Petroleo Brasileiro SA (PBR), or Petrobras.
Anadarko even lined up a buyer, PetroFalcon, which offered to pay $200 million. But PDVSA rejected the deal, saying it has first dibs.
Since then, PDVSA has dragged its feet on actually purchasing the Anadarko stake. It said last year that it remains interested in buying it, but said it wants Anadarko to lower the price because of lower oil prices.
BP's appetite to work in Venezuela has dwindled sharply in recent years amid pressure on foreign investors from Chavez. The pressure came to a head in 2007, when Venezuela nationalized several oil projects operated by international partners. Some Western oil companies, including BP, agreed to turn over a controlling interest to PDVSA, while others such as Exxon Mobil Corp. (XOM) and ConocoPhillips (COP)refused and left the country.
"We'll have to see the proposal...PDVSA would be interested" in BP's assets, said Rafael Ramirez, who is both Venezuela's energy minister and the president of PDVSA.
Ramirez reminded reporters that PDVSA and the Venezuelan government hold the so-called right to first refusal, meaning they have first dibs on any agreed-to asset sale in the country's energy sector.
BP PLC was in talks in late July to sell its stakes in oil projects in Venezuela to its Russian joint venture TNK-BP Ltd., part of a $30 billion asset-disposal program designed to help BP meet the costs of the Gulf of Mexico oil spill.
BP has minority stakes in two joint ventures, Petroperija and Boqueron, with state-owned Petroleos de Venezuela SA, or PDVSA, and is a partner in Petromonagas, which produces 110,000 barrels a day. The assets are estimated to be worth as much as $1 billion in total.
It's not clear whether BP would remain interested in brokering a sale of its assets if it is forced to sell to PDVSA rather than TNK-BP Ltd. or another firm. PDVSA's reputation in the oil business has suffered since President Hugo Chavez took power in Venezuela 11 years.
Chavez, a firebrand socialist, has transformed PDVSA significantly, steering much more of the company's revenues from oil sales toward pet social projects, which has left less to be used on new technology to increase oil production capacity. Chavez recently said he was officially changing the company's name to "Socialist PDVSA" to reflect that the company's objective is to help the people of Venezuela.
Another potential concern of BP's is that PDVSA has used the "right of first refusal" in the past, and it didn't turn out so well for the seller.
Anadarko Petroleum Corp. (APC) announced plans in early 2008 to sell its indirect 18% stake in Petroritupano, a joint venture in Venezuela with PDVSA and Brazil's Petroleo Brasileiro SA (PBR), or Petrobras.
Anadarko even lined up a buyer, PetroFalcon, which offered to pay $200 million. But PDVSA rejected the deal, saying it has first dibs.
Since then, PDVSA has dragged its feet on actually purchasing the Anadarko stake. It said last year that it remains interested in buying it, but said it wants Anadarko to lower the price because of lower oil prices.
BP's appetite to work in Venezuela has dwindled sharply in recent years amid pressure on foreign investors from Chavez. The pressure came to a head in 2007, when Venezuela nationalized several oil projects operated by international partners. Some Western oil companies, including BP, agreed to turn over a controlling interest to PDVSA, while others such as Exxon Mobil Corp. (XOM) and ConocoPhillips (COP)refused and left the country.
September 27, 2010 - Regional integration would offer substantial gains - expert -
Source: Business News Americas
According to a study carried out by the regional energy integration commission CIER, benefits of integration of the Central American, Andean and Mercosur power grids would include a reduction in operating costs, an improvement in reliability of supply and lower CO2 emissions.
"Increasing interconnection is justified economically when we assign all of the benefits to it," Alejandro Perroni, the president of CIER and general manager of Uruguay's state power company UTE said at an energy conference in Montreal.
The study found that interconnection of the continent from Mexico to the Southern Cone would require 12 separate interconnection projects involving 10,000km of new transmission lines and investments of almost US$5bn.
Benefits would include a reduction in operating costs across the region of US$1.5bn/y and a reduction of CO2 emissions of 8Mt/y.
Taken as a whole, integration would also help maximize the continent's clean energy sources, including 327GW of wind power potential and 594GW of hydro capacity, only 25% of which is currently developed, according to Perroni.
INTERCONNECTION ALREADY A REALITY
The integration process has already begun, with the 1.8GW Salto Grande (Argentina-Uruguay), 14GW Itaipu (Paraguay-Brazil) and 3.2GW Yacyreta (Paraguay-Argentina) bi-national hydros, along with frequent power exports between Colombia and Ecuador, Colombia and Venezuela, and Argentina and Brazil.
"From 1995 to today, power integration has increased tenfold, from 500MW to 5GW," Perroni said.
The connection of the Colombian and Panamanian power networks remains on track to be completed in 2014 at a cost of US$400mn, the CEO of Colombian state transmission firm ISA, Luis Alarcon, said earlier in the year.
"Increasing interconnection is justified economically when we assign all of the benefits to it," Alejandro Perroni, the president of CIER and general manager of Uruguay's state power company UTE said at an energy conference in Montreal.
The study found that interconnection of the continent from Mexico to the Southern Cone would require 12 separate interconnection projects involving 10,000km of new transmission lines and investments of almost US$5bn.
Benefits would include a reduction in operating costs across the region of US$1.5bn/y and a reduction of CO2 emissions of 8Mt/y.
Taken as a whole, integration would also help maximize the continent's clean energy sources, including 327GW of wind power potential and 594GW of hydro capacity, only 25% of which is currently developed, according to Perroni.
INTERCONNECTION ALREADY A REALITY
The integration process has already begun, with the 1.8GW Salto Grande (Argentina-Uruguay), 14GW Itaipu (Paraguay-Brazil) and 3.2GW Yacyreta (Paraguay-Argentina) bi-national hydros, along with frequent power exports between Colombia and Ecuador, Colombia and Venezuela, and Argentina and Brazil.
"From 1995 to today, power integration has increased tenfold, from 500MW to 5GW," Perroni said.
The connection of the Colombian and Panamanian power networks remains on track to be completed in 2014 at a cost of US$400mn, the CEO of Colombian state transmission firm ISA, Luis Alarcon, said earlier in the year.
