BHP Billiton Finds New Gas Offshore T&T

(Trinidad Express, Aleem Khan, 18.Jul.2018) – Australia’s BHP Billiton found new gas offshore Trinidad, the company confirmed in a statement yesterday.

“In Trinidad and Tobago, following the gas discovery at LeClerc, we commenced Phase 2 of our deepwater exploration drilling campaign to further assess the commercial potential of the Magellan play. The Victoria-1 exploration well was spud on June 12, 2018 and encountered gas.

Following completion of the Victoria-1 well, we expect the Deepwater Invictus to drill the Bongos prospect in Northern Trinidad and Tobago,” BHP Billiton said in a news release.

***

Advantage Lithium Arranges $12 Mln Private Placement

(Energy Analytics Institute, Jared Yamin, 18.Jul.2018) – Vancouver, British Columbia-based Advantage Lithium Corp. arranged a private placement of 15,585,000 common shares of Advantage Lithium at a price of $0.77 per Common Share for gross proceeds of $12,000,450.

“We are pleased to be adding prominent institutional investors to our shareholder registry and very encouraged to see Orocobre and other insiders supporting their pro-rata equity positions in Advantage,” said Advantage Lithium Corp. President, CEO & Director David Sidoo in an official company statement.

Subscribers have been identified to fill the placement. Proceeds from the placement will destined to cover general working capital and to fund continued development and exploration activities on its lithium properties in Argentina, the company announced in an official statement.

Common shares issued pursuant to the private placement will be subject to a four month hold period from the date of closing. The private placement remains subject to the approval of the TSXV.

Focused on developing its 75% owned Cauchari lithium project, located in Jujuy, Advantage Lithium Corp also owns 100% interest in three additional lithium exploration properties in Argentina: Antofalla, Incahuasi, and Guayatayoc.

Insiders

Advantage Lithium anticipates insiders of the corporation, including Orocobre Limited, will exercise participation rights in order to maintain their existing ownership interest in the company. In connection with the private placement, the insider also intends to arrange for the sale of up to 8,571,450 common shares, held by the insider prior to the closing of the private placement, through the facilities of the TSX Venture Exchange Inc., and to use 100% of the proceeds from the swap to participate in the private placement. The swap will allow Advantage Lithium to add key cornerstone institutional investors to the company’s register of shareholders, according to the statement.

***

Moody’s Upgrades Ecopetrol Rating

(Energy Analytics Institute, Piero Stewart, 18.Jul.2018) – The risk-rating agency Moody’s increased the baseline credit assessment (BCA) two notches, to ba1 from ba3 for Colombia’s state oil company.

The agency said the higher BCA was primarily due to Ecopetrol’s “solid metrics and progress in its strategy of growth and adding to reserves, with a reserves replacement index of 126% at the end of 2017,” reported Ecopetrol in an official statement, citing a Moody’s press release.

In the release, Moody’s highlighted Ecopetrol’s four areas of growth:

1. Implementation of improved recovery and infill projects,

2. Exploration,

3. Assessment of opportunities in non-conventional deposits, and

4. Inorganic growth leveraged on its strong cash position.

Moody’s also stressed “Ecopetrol’s solid liquidity and the management team’s commitment to protecting credit metrics.”

The agency maintained Ecopetrol’s rating at Baa3 with a stable outlook.

***

Ecuador Non-Oil Exports Up in 2018

(Energy Analytics Institute, Jared Yamin, 18.Jul.2018) – Non-petroleum exports from the South American country rose to $5,484 million from January to May of 2018 compared to $5,149 million in the same period in 2017.

Exports of bananas and plantains, aquaculture, fish, flowers, plants, cocoa, processed products and metal mechanics accounted for 80.8% of total shipments abroad during the most recent five-month period, according to Proecuador, which conducted an analysis based on figures from the Central Bank of Ecuador.

***

Ecuador Extracting Nearly 523 Mb/d

(Energy Analytics Institute, Piero Stewart, 18.Jul.2018) – The South America country is currently extracting nearly 523,000 barrels per day of crude oil, announced the daily newspaper El Universo.

Ecuador is seeking to urgently boost output after a June 2018 announcement by OPEC stipulating the increases.

***

ENAP to Spend $65.2 Mln in Ecuador

(Energy Analytics Institute, Jared Yamin, 18.Jul.2018) – ENAP announced it will increase investments in three fields it operates in Ecuador.

“The new agreement stipulates an additional investment of $65.2 million for the drilling of 10 wells, which will allow the development of approximately 10.3 million barrels of oil through 2034,” announced Ecuador’s Hydrocarbons Ministry in a statement.

In 2010, ENAP signed a service contract for the operation of three blocks in Ecuador. Actual production from the blocks is some 18,000 barrels per day of crude oil. Lastly, in 2018, the company plans investments of nearly $50 million, according to the statement.

***

LatAm’s Solar Park Turns Mexican Desert Green

(AFP, 18.Jul.2018) – Driving through the endless dunes and cacti of the Chihuahuan desert in northern Mexico, a shimmering blue field suddenly appears on the horizon — not a mirage, but the largest solar park in Latin America.

This silent stretch of sand in the state of Coahuila is the spot Italian energy giant Enel picked to build the Villanueva power plant: 2.3 million solar panels that sprawl across a sun-soaked area the size of 2,200 football fields.

When the plant reaches full capacity later this year, it will supply enough electricity to power 1.3 million homes.

It is the biggest solar project in the world outside China and India.

The panels are designed to turn in tandem with the sun, like a field of metallic sunflowers.

They are part of Mexico’s push to generate 35 per cent of its electricity from clean sources by 2024.

Mexico won plaudits from environmentalists in 2015 when it became the first emerging country to announce its emissions reduction targets for the United Nations climate accord, ambitiously vowing to halve them by 2050.

A key part of that push is a sweeping energy reform undertaken in 2013.

One of outgoing President Enrique Pena Nieto’s signature initiatives, it was initially criticised by President-elect Andres Manuel Lopez Obrador, who will take office on December 1.

But the anti-establishment leftist has warmed to the overhaul, and analysts now say it is likely here to stay.

The reform made global headlines for reopening Mexico’s oil sector to foreign companies after 76 years of State monopoly.

A lesser-known, but perhaps ultimately more important aspect was to allow private companies, to generate and supply electricity.

Under the new law, Mexico is now holding clean-energy auctions in which private companies bid to produce and sell electricity on an open market.

“We’re very happy with the business environment and opportunities that exist in Mexico,” said Enel’s global director for renewable energy, Antonio Cammisecra.

“Since the reform, we see better market conditions and potential for a company like ours.”

CUTTING COSTS

Projects like this are also benefiting from a sharp drop in prices for solar technology in recent years.

“Photovoltaic solar energy is the fastest-growing energy in the world — and that is driving technology innovators,” said Arturo Garcia, an energy specialist at international consulting firm Deloitte.

The energy reform and price plunge are together reshaping the solar market in Mexico.

“Before the reform it was an environmental issue,” said Victor Ramirez, executive director of the National Solar Energy Association.

“Today it’s not just about the environment, it’s about economics. If solar sources are cheaper, investment is going to gravitate there.”

The new opportunities are attracting international interest.

Besides the US$650-million Villanueva project, Enel has another solar park and is building two wind farms.

Last May it pledged an additional US$97 million in investment to expand its projects in Mexico.

Spain’s Iberdrola is building two solar parks, Dutch firm Alten is building another, and British-backed Atlas Renewable Energy recently acquired yet another.

“Mexico has world-class solar resources,” said Camilo Serrano, Atlas’s general manager for Mexico.

“The potential is absolutely proven, and investors’ appetite is obvious in the auctions.”

ELECTRIC

The auctions have so far raised an estimated US$8.6 billion in investment.

Mexican Energy Minister Pedro Joaquin Coldwell recently said they would lead to the construction of 40 solar parks and 25 wind projects.

Mexico, which had nine solar parks in 2015, aims to have 68 by 2021, he added.

Three auctions have been held so far. The production price offered by electricity suppliers has dropped from US$50 per megawatt-hour to US$20.

Thanks to the programme, Mexico is now on the top 10 list of countries with the most clean energy investment, according to the Government, – which predicts the price plunge will continue at the next auction, slated for November.

***

Venezuela Facing ‘Economic Collapse’, IMF Warns

(AFP, 18.Jul.2018) – Venezuela is in a state of “economic collapse” with hyperinflation not seen since the middle of the last century, the International Monetary Fund said Monday.

Despite higher oil prices that are benefiting most exporting nations, the IMF sees a worsening contraction of the economy, which in April already was forecast to decline 15 per cent, with inflation this year of 14,000 per cent.

“It’s very hard to exaggerate the extent of disruption in the Venezuelan economy,” IMF Chief Economist Maurice Obstfeld said.

Already the fund sees double-digit contraction in coming years and “we’ve increased our assessment about the degree of contraction”, he told reporters.

In addition, “we’re seeing a hyperinflation rivalled only by Zimbabwe and the great historical hyperinflation of the inter-war period”.

The IMF did not release a new forecast for Venezuela in the quarterly update to the World Economic Outlook, which provides a limited set of estimates.

Obstfeld noted the wave of migrants fleeing Venezuela was having an impact on neighbouring economies, even though there is no language barrier.

“Just as in other parts of the world there is a huge challenge to absorb these migrants,” he said.

OPEC data show Venezuelan oil production crashed to a new 30-year low of 1.5 million barrels a day in June.

The South American nation earns 96 per cent of its revenue through oil sales but a lack of foreign exchange has sparked economic paralysis that has left the country suffering serious shortages of food and medicine.

The government of socialist President Nicolas Maduro has told state oil company PDVSA to increase production in the country which sits atop the world’s largest reserves of crude.

***

Petrobras to Start Up 4 New Platforms in 4Q

(Reuters, 18.Jul.2018) – Brazil’s state-controlled oil company Petrobras will start pumping pre-salt oil from four new platforms between October and December, the company’s director for production and technology development Hugo Repsold said.

Speaking to reporters at an oil industry event, he said Petrobras could study building its own platforms after 2022 and predicted the company would head toward sustainable growth of oil production in the next few years.

The four new platforms in the Santos basin are the P-67 and P-69 in the Lula oil field, and the P-75 and P-76 in the Buzios fields. A fifth platform planned for this year, the P-68 in the Berbigão field, will start in 2019.

Repsold said Petrobras was well on the road to recovery and was starting up platforms that had been delayed in recent years and which will now ensure continued growth in output.

He said the drop in Petrobras oil production in June to 2.03 million barrels per day – 1.5 percent less than May – was due to maintenance work on some platforms.

A revised business plan that should be published in the third quarter, he said, will include having the company’s own platforms that would enter production from 2023 onwards.

***

Total Advances Renewable Projects in Brazil

(UPI, Daniel J. Graeber, 18.Jul.2018) – A renewable energy division of French supermajor Total said Wednesday it was moving forward with new solar power developments in Brazil.

Total in September paid about $275 million to acquire a 23 percent stake in renewable energy company Eren, naming the new entity Total Eren. The renewable energy division announced Wednesday it was financing and building a combined 140 megawatts of nominal power in Brazil, roughly enough power for at least 100,000 homes.

Of the three projects either in the finance or construction phase, a project dubbed BJL 11 is the company’s first ever in Brazil. With close to 78,000 panels, the French company said it could generate enough power for 23,000 homes.

The move into Brazilian renewables follows the formation of a strategic partnership between Total and Petróleo Brasileiro, known commonly as Petrobras. The 2016 partnership reinforced operations at oil fields off the Brazilian coast, thermal plants and infrastructure associated with liquefied natural gas.

Last week, Petrobras signed a memorandum of understanding to examine solar and wind energy segments in the Brazilian market with Total Eren.

“The recently announced agreement with Petrobras and Total, two major players in the energy sector, makes me very much enthusiastic about future growth prospects in renewables in the country,” Fabienne Demol, the global head of business development of Total Eren, said in a statement.

Petrobas has 104 MW of wind power and 1.1 MW of solar power already in its portfolio in the Brazilian market.

Brazil generates about three quarters of its electricity from renewable energy resources. According to the U.S. Commerce Department, it’s the best renewable energy market in Latin America.

***

Duque Names Maria Fernanda Suarez Energy Minister

(Reuters, 18.Jul.2018) – Colombia’s President-elect Ivan Duque on Wednesday named Maria Fernanda Suarez as mining and energy minister when he takes office in August, a role that will require her to bolster oil production to help weak economic growth and settle messy mining disputes.

Suarez, 44, is currently executive vice president at state oil company Ecopetrol. She served as director of public credit at the finance ministry and as vice president of investments for the Porvenir pension fund. She has also held senior positions at Citibank, ABN AMRO and Bank of America.

Suarez has a Masters degree in public policy from Georgetown University. She will replace German Arce.

“She has a brilliant resume in the public and private sectors,” Duque said in a statement.

As mines and energy minister, Suarez faces a difficult task as Colombia struggles to increase oil production to help increase revenue and bolster the weak economy after years of weak international oil prices.

“With her, we will promote greater diversification of national energy, efficiency and competitiveness in the sector, provide energy security for Colombia, and social and environmental responsibility in all energy mining production sectors,” Duque said.

At current rates of production, Colombia has less than six years worth of oil reserves, the energy ministry says, and urgent investment in exploration is needed to replace reserves.

Duque’s solution to dwindling oil reserves is to encourage investment in exploration, which he says could provide years more oil production, and give tax relief to the sector.

He has also pledged additional investment at state-run Ecopetrol’s refineries to allow exports of more higher-value derivatives.

Still, with the economy growing at an expected pace of just 2.7 percent this year and a budget deficit that needs to be reduced, funding such expenditure may be tough.

The Colombian Petroleum Association (ACP), says the industry needs to spend up to $7 billion a year just to keep output between 800,000 and 860,000 barrels per day.

Oil companies are already grappling with security concerns as well as local referendums – on whether to allow mining in certain areas – and environmental court rulings that have stymied major mining projects in Latin America’s fourth-largest economy.

A recent paper by the ACP, which represents private crude producers, warned that planned referendums put one-fifth of oil production at risk.

Private oil companies plan to invest up to $4.9 billion this year, ACP said, while Ecopetrol plans to spend up to $4 billion.

(Reporting by Helen Murphy Editing by Nick Zieminski)

***

Guyanese Tanker Workers Undergo Safety Training

(Stabroek News, 18.Jul.2018) – Approximately 35 Guyanese Pritchard-Gordon Tankers (PGT) workers were educated on safety practices as Shell partnered with the company to host a one-day workshop yesterday.

The workshop was hosted at the Pegasus Hotel, where the workers were taken through the rounds by PGT’s Nick Griffith.

“My main focus for this seminar is to improve safety on board of our ships; not that we have a poor safety record but there are always ways of improving safety on board and it has been proven that little incidents, little triggers can show that there’s underperformance and if we have a lot of small and minor incidents then it’s possible that they can result in larger accidents which we definitely want to avoid,” Griffith told Stabroek News.

He stressed that they have not had any serious incidents in a long time but there have been recurrences of minor ones.

According to the company’s website, PGT “specialises in ocean transportation of crude oil and refined petroleum products in environmentally sensitive areas, using purpose built, shallow draft, double hull tankers.”

Griffith said that he hopes that the workers will be even more equipped than they already are to take the necessary safety precautions when they are working and to ensure that they spread the word to the other workers for a more holistic improvement.

He explained that the main topic of yesterday’s seminar was mooring, which he said is a quite dangerous operation.

“You’re using a lot of ropes under pressure and strain and those ropes, if used incorrectly, can break and the rope will snap and it will whiplash and if that rope hits a person’s leg they could lose it. If it hits them around a vital organ they can ultimately die or fall over and bang their head and it has been seen in the past that mooring is a very dangerous operation,” he said.

***

Colombia Names New Mining Minister

Colombia new Mining Minister. Source: Mining Ministry.

(Energy Analytics Institute, Piero Stewart, 18.Jul.2018) – Colombia’s President elect Iván Duque named Ecopetrol Executive Vice President María Fernanda Suárez as the country’s new mining minister, according to reports in the daily newspaper La Republica.

***

U.S. Revokes Visa of Citgo CEO

Asdrubal Chavez Source: Bloomberg

(Bloomberg, Lucia Kassai and Fabiola Zerpa, 18.Jul.2018) – Being a blood relative of Hugo Chavez used to open doors. Now Asdrubal Chavez, cousin of the late Venezuelan socialist leader, is finding out it can close some as well.

In the most recent blow against Venezuela, the U.S. revoked the visa of Chavez, chief executive officer of Petroleos de Venezuela SA’s U.S. refining unit Citgo Petroleum Corp. and a former oil minister. He will be burdened with the task of commanding from outside the U.S. three refineries with a combined capacity to process 749,000 barrels of oil daily and an army of 3,500 employees.

Venezuela, home to the world’s largest oil reserves, has seen its production slide by more than one-third since late 2015, according to data compiled by Bloomberg. Its output may sink from 1.34 million barrels a day in June to just over 1 million, Torino Capital chief economist Francisco Rodriguez wrote in a note. U.S. sanctions have accelerated the decline, as have lawsuits by ConocoPhillips to claim assets as payment for an arbitration award.

The U.S. has sanctioned at least 48 Venezuelan nationals associated with economic mismanagement and corruption, including President Nicolas Maduro, and has provisionally revoked tens of thousands of visas in the aftermath of President Donald Trump’s travel ban. Still, kicking out a C-suite executive of the country is rare.

The revocation “does not change anything at Citgo in terms of its management and operations,” the company said in an emailed statement.

The State Department declined to comment on individual visa cases.

It’s unclear to where Chavez, who used to work from Citgo’s headquarters in Houston, will move. One of the possibilities would be for him to be based out of Aruba, where Citgo is seeking to refurbish a refinery and convert it into an oil upgrader that will transform extra-heavy Venezuelan oil into refinery-ready synthetic grades.

— With assistance by Nick Wadhams
***

YPF to Sell Bonds Ending 2-Mth Debt Drought

(Bloomberg, Pablo Rosendo Gonzalez, 18.Jul.2018) – Argentine’s state-controlled oil company YPF SA has asked banks to submit proposals for a bond sale in the second half of the year to fund an aggressive growth plan for its power unit.

YPF Energia Electrica SA will try to sell at least $500 million of bonds as it seeks to double its generation capacity by 2020, according to two people with direct knowledge of the plan, who asked not to be named as talks are private.

YPF declined to comment.

This is the latest step in the company’s plan to turn its power unit, which will be re-branded as YPF Luz in the coming days, into Argentina’s third-largest energy generator. In March, YPF sold a 24.99 percent stake in the business for $275 million to General Electric Co. Negotiations for a third partner — previously identified as Blackstone Group by people familiar — have so far failed to materialize.

YPF Chairman Miguel Angel Gutierrez said in June there were no active talks for another partner, though one could be brought in as YPF Luz grows, adding that a stock-market listing was also a possibility.

Business Plan

YPF Luz is looking to invest $2 billion in renewable and thermal projects through 2020. The company is currently the fifth-largest producer in Argentina, with 1,800 megawatts generation capability with 270 employees. The two largest generators are Central Puerto SA and Pampa Energia SA.

Once YPF Luz receives offers from banks, a debt sale may take place as soon as August, the people said. The company may seek to sell more than $500 million of bonds, two of the people said, adding that market conditions for Argentine companies right now make sales that large difficult.

“It’s good to be ready to issue, but going out right now doesn’t seem a good alternative for the company,” TPCG analyst Florencia Mayorga Torres said by phone. “I can imagine they will wait until at least the fourth quarter to sell, hoping the market sentiment regarding Argentina improves.”

Most Prolific

YPF is Argentina’s most prolific bond issuer, with 35 debt securities currently outstanding, according to data compiled by Bloomberg. Its most actively traded bond, $1.5 billion of 8.5 percent senior unsecured notes maturing in 2025, yields around 8.9 percent after spiking to a high of 9.74 percent last month. With $1.2 billion in dollar-denominated bonds and other financing due in 2018, YPF may also have to come to market with another bond offering soon.

If YPF’s bond sale takes place, it may put an end to a company-debt drought that started after Transportadora de Gas del Sur SA sold $500 million of seven-year bonds to yield 6.8 percent on April 26. The drought has been so severe that Argentina’s biggest company, Telecom Argentina SA, has postponed a $1 billion bond sale four times on market volatility.

The increase in borrowing costs has also been a result of the decision by Argentina, Latin America’s third-largest market, to go to the International Monetary Fund to request a $50 billion credit facility to insure debt repayment. On June 13, the lender of last resort summarized its view on Argentina’s repay ability saying “the federal debt is sustainable but not with a high probability.”

***