Argentina Owes Bolivia $250 Million for Natural Gas Sales

(Energy Analytics Institute, Ian Silverman, 14.Sep.2018) — Argentina owes Bolivia $250 million, which corresponds to two-months of natural gas sales.

“Hopefully they can honor the debt,” reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbons Minister Luis Alberto Sánchez.

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Excelerate Energy, TGS Sign Deal to Study Liquefaction Project in Bahía Blanca

(Excelerate Energy L.P., 10.Sep.2018) — Excelerate Energy L.P. and Transportadora de Gas del Sur S.A. announced the execution of a Memorandum of Understanding to jointly collaborate on the assessment of a liquefaction project in the city of Bahía Blanca, Argentina. Argentina currently imports liquefied natural gas (LNG) through two floating import terminals, particularly during the country’s peak winter consumption. The successful development of Argentina’s shale gas reserves resulted in a potential excess of natural gas during the summer months. The project aims at studying the technical and commercial viability of liquefying and exporting natural gas during the summer season, allowing a more sustainable development of shale gas resources and reducing Argentina’s annual natural gas net import needs. The study is expected to be completed by the end of 2018, at which time Excelerate and TGS will share the results with government and industry officials and decide on further actions towards the implementation of the Project.

“Given the high seasonality of Argentina’s natural gas consumption, LNG has played a critical role in meeting the country’s energy demands,” stated Excelerate’s Chief Commercial Officer Daniel Bustos. “This Project will significantly enhance Argentina’s capacity to maximize the use of local resources by allowing a more predictable development of shale gas production while reducing the overall costs of importing LNG.”

TGS is carrying out an important midstream project aimed at the transportation and conditioning of the natural gas production derived from the Vaca Muerta Basin, located in the province of Neuquén, Argentina. This Project represents an essential contribution to the development of shale gas reserves, promoted by the National and Provincial Governments, as it will ensure the infrastructure required to inject incremental gas production to the main transportation systems.

“Carrying out LNG production through the Project will be key to promote the development of unconventional gas, since it will allow to expand the scale of the gas market, increasing export opportunities, after having met domestic market needs in Argentina,” stated TGS’ Chief Commercial Officer Néstor Martín.

Both Excelerate and TGS have been critical players in the growth of the Argentine energy industry. Currently, one hundred percent of LNG imported and regasified into the country is through Excelerate’s two floating storage and regasification units (FSRUs). Excelerate developed South America’s first LNG import terminal in 2008 in Bahía Blanca, following with the second terminal in 2011 in Escobar, Argentina. TGS is the leading natural gas transportation company in Argentina and owns and operates South America’s largest pipeline network. The project underscores both party’s commitment to seeing Argentina’s energy sector become more sustainable for the long term.

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Argentina to Seek Bids on Renewable Energy Projects

(Efe, 6.Sep.2018) — The government of Argentina announced Thursday that it will launch a third round of tenders for bids on renewable energy projects in October.

The announcement was made by the undersecretary of Renewable Energy, Sebastian Kind, during the Argentina Wind Power 2018 conference, organized by the Global Wind Energy Council.

The third round of the RenovAr program will seek to take advantage of the existing medium-voltage networks.

Kind explained that, while Argentina works on expanding its high-voltage networks, the government seeks to promote diverse renewable energy projects throughout the country that will use the existing medium-voltage networks.

“We seek to bring in capital from non-traditional actors to develop renewable energy projects and take advantage of the existing medium-voltage networks to promote regional development,” Kind said.

The undersecretary said that the projects will be presented next March, and that the contracts are expected to be signed in July 2019.

“We have taken the decision to make the announcement beforehand (…) to provide more time for the projects to be designed,” he said.

The Argentine government has already developed two stages of its RenovAr program, the first having begun in 2016, when 17 renewable energy projects for 1,109 MW were assigned.

RenovAr 2, for its part, was launched last year, when 22 projects for 634.3 MW were allotted.

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Pentanova to Change Name to CruzSur Energy Corp.

(PentaNova, 30.Aug.2018) — PentaNova Energy Corp. announced that effective at the market opening on September 4, 2018, the company will change its name to “CruzSur Energy Corp.” and its common shares and listed share purchase warrants will commence trading on the TSX Venture Exchange on a consolidated basis of one (1) new share for ten (10) existing shares under the symbols “CZR” and “CZR.WT” respectively.

Following the consolidation, the company will have approximately 24,220,160 common shares and 5,625,001 listed warrants issued and outstanding. No fractional shares or warrants will be issued. Instead, all resulting fractional shares and warrants of less than one-half will be rounded down to the nearest whole number, and of one-half or greater will be rounded up to the nearest whole number.

The new CUSIP number for the consolidated shares is 22889C103 and the new ISIN number is CA22889C1032. The new CUSIP number for the consolidated warrants is 22889C111 and the new ISIN number is CA22889C1115.

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Argentina Re-Ignites Deal To Spur Investment In Vaca Muerta

(Reuters, Eliana Raszewski, 28.Aug.2018) — Argentina relaunched a one-year-old agreement between the government, companies and workers on Tuesday to drive competition and spur development in the Vaca Muerta shale play, the government said in a statement.

The original agreement, signed just over a year ago, sought to boost production by incentivizing competition among oil and gas drillers in the region. The government is now looking to bring in other business sectors like construction and mid-stream service providers.

“We are not going to stop until we export $30 billion in gas and oil from Vaca Muerta,” President Mauricio Macri told employees of state-controlled energy company YPF during a meeting with them in the southwestern province of Nequen.

Argentina is trying to double production in the region, aiming to pump 260 million cubic meters of gas daily within five years, the government said in the statement. Of that, 100 million cubic meters per day would be destined for international markets, according to the government’s plans.

YPF presented its proposal to small and medium-sized businesses involved in the oil and gas supply chain earlier this year, in an effort to drive competition, the statement said.

“We want to increase production by 100 to 130 fractures per month, which can be achieved by working with unions and supply companies,” YPF President Miguel Gutierrez said.

YPF, with its partners, has invested $8.4 billion in the region. It is the leading investor in Vaca Muerta, one of the largest non-conventional oil and gas formations in the world.

In June, companies in Vaca Muerta increased oil production by 5 percent compared with the same month last year. Gas production increased 8.2 percent over the same period, according to data from the Energy Ministry.

(Reporting by Eliana Raszewski Writing by Scott Squires Editing by Leslie Adler)

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PentaNova Energy Provides Financial, Ops Update

(PentaNova Energy Corp., 24.Aug.2018) — PentaNova Energy Corp. filed its financial and operating results for the three and six months ended June 30, 2018. All dollar values in this news release and the Company’s financial disclosures are in United States dollars, unless otherwise stated. All production figures are measured in barrels of oil equivalent (boe).

Financial Statements

Revenues for the periods presented were obtained from the working interest in the Llancanelo, Mariposa, and Sur Rio Deseado assets which represent 90 and 92 days of production during Q1 2018 and Q2 2018, respectively.

Highlights

Llancanelo

The Llancanelo net production recorded for each of the periods is for the 39% working interest held during Q1 2018 and Q2 2018. Subsequent to the closing of the Roch acquisition on October 27, 2017, which included an additional 10% working interest in Llancanelo, the Company’s Llancanelo net production increased to 39% working interest.

During Q2 2018, the Llancanelo concession produced a total of 41,057 net boe (105,302 gross boe) compared to 43,827 net boe (111,024 gross boe) in Q1 2018, representing roughly a 5% decrease in production. This equated to average daily production of 451 net boe/d in Q2 2018 compared to 481 net boe/d in Q1 2018. The reduction in production can be attributed to scheduled maintenance that required certain wells on the concession to be shut in during the maintenance period.

Impairment Loss

During the six months ended June 30, 2018, the Company recognized impairments relating to the Llancanelo Asset of $25.0 million. These impairments were the result of the difference between the period‐end net book value and management’s assessment of the recoverable amount of the Llancanelo Asset as of June 30, 2018 on account of the formal notification received from YPF regarding the relinquishment of the Company’s working interest in the Llancanelo Asset and the termination of the YPF Farm‐In. Following completion of the write‐down, the Llancanelo Asset had a carrying value of approximately $10.6 million.

Mariposa

The Company holds a net working interest in the Estancia La Mariposa block of 18%, entitling it to 18% of the oil, natural gas and condensate sales, while the operator carries 100% of the capital expenditures and field operating costs. The net revenue figures associated with the Mariposa Asset are presented net of any applicable royalties and certain operating costs of transportation, treatment and processing. Oil and natural gas production is sold on behalf of the Company, for which the Company receives proceeds from the operator, net of the aforementioned royalties and operating costs. The net revenue generated from this asset has not been included in any “per barrel” pricing herein. Mariposa revenue, net of royalties, of $189,049 and $351,606 were realized in Q2 2018 and Q1 2018, respectively. These revenue amounts were derived from net production of 11,653 boe and 16,210 boe during the respective periods. Reduction of net revenue in Q2 2018 is the result of decreased production from the Mariposa Asset due to a workover campaign on some of the wells that was carried out by the operator during the quarter.

Financial Results & Balances

— The Company had a working capital deficiency of $12.6 million as of June 30, 2018

— Impairment loss of $25.0 million was recognized during the three months ended June 30, 2018

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Former PDVSA Director Detained in Argentina

(Energy Analytics Institute, Ian Silverman, 17.Aug.2018) – A former PDVSA director has been detained and accused of money laundering.

Luis Abraham Bastidas Ramírez, the cousin of former PDVSA President Rafael Ramírez, was detained in Argentina, wrote reporter Dean Rojas in a tweet on his personal twitter account.

Ramírez’s capture was ordered by the Principality of Andorra as it related to the possible laundering of $5 million, wrote Rojas in his tweet.

State oil company PDVSA has yet to emit a statement regarding the developments.

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Guyana to Become 5th Largest Oil Producer in LAC Region

(Energy Analytics Institute, Piero Stewart, 15.Aug.2018) – If all goes off as planned, by 2025, Guyana will be the 5th largest oil producer in the Latin American and Caribbean region.

Source: Trading Economics

That’s according to an analysis of data posted by Trading Economics, and extrapolation of estimates of Guyana’s future oil production, as announced by Kevin Ramnarine, the former Energy Minister of Trinidad and Tobago.

“Oil production in Guyana is expected to come online at 120,000 barrels per day in 2020 and peak at 750,000 barrels per day by 2025, according to Exxon,” said Ramnarine, now an international petroleum consultant, during a webinar with Guyana’s Minister of Finance, the Honorable Winston Jordan and hosted by Caribbean Economist Marla Dukharan.

Considering initial production of 120,000 barrels per day in 2020, Guyana will first occupy the spot as the 7th largest oil producer in the LAC region, assuming no drastic changes in the other countries’ production profiles over the next couple of years.

However, in the process, by the time peak production is reached five years latter, Guyana will have surpassed OPEC producer Ecuador, assuming production in that country, as well as others, doesn’t experience a drastic decline, as has been the case in Venezuela in recent years.

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PDVSA Leaves Argentine Gas Station to Fend for Itself

(Reuters, Luc Cohen, 15.Aug.2018) – As Venezuela’s state-owned oil company PDVSA saw its finances devastated by low oil prices and mismanagement, it funneled millions of dollars to Petrolera del Conosur (PSUR.BA), a loss-making Argentine gas station operator it controls.

PDVSA decided to cut off the support payments late last year, according to a person familiar with Petrolera del Conosur’s operations, as the once-proud icon of Venezuelan oil production struggled with declining output aggravated by a worsening economic crisis.

The transfers had totaled $89 million between 2013 and 2017, according to a Reuters review of filings with Argentina’s securities regulator, years that coincided with a frustrated effort by Venezuela to extend the petro-diplomacy it employed in the Caribbean to the southern cone of Latin America.

Profitability was likely never the true goal of Venezuela’s Argentina foray, said David Mares, a political science professor at the University of California, San Diego. In 2006, late President Hugo Chavez unveiled a plan to transform PDVSA from a commercial company to a domestic and international political tool.

Before oil prices crashed in 2014, Venezuela’s government used PDVSA to fund social programs at home and provide countries in the region with cheap fuel to promote its socialist model and push back on United States influence.

The most well-known example is Petrocaribe, a program through which Venezuela sends crude and fuel to Caribbean countries on generous credit terms or through barter deals. But Chavez also signed deals with governments elsewhere in the region, including Argentina and Uruguay, to sell fuel and invest in energy infrastructure.

“The idea of having a series of gasoline stations in Argentina would fit in that context. It’s to show the Bolivarian revolution benefits people at the ground level,” Mares said. “The surprise is that they’ve lasted so long, because PDVSA is broke, the country is broke.”

PDVSA in 2006 purchased a 46 percent stake in Conosur from Uruguay’s ANCAP, which it boosted to a controlling 94 percent in 2010. PDVSA’s website still boasts of a goal to run 600 stations in Argentina to gain a market share of 12 percent in the country.

Conosur’s struggles come as some of PDVSA’s other overseas ventures, most launched through a wave of overseas expansion in the 1980s or as part of Chavez’s attempts to use “oil diplomacy,” have been scaled back or shuttered.

One of the most emblematic is Hovensa, a refinery in the U.S. Virgin Islands operated jointly with Hess Corp (HES.N), that filed for bankruptcy in 2015.

‘STRATEGIC ALLIANCE’

Since 2013, Conosur has posted hundreds of millions of pesos in annual losses. Fuel sales at its PDV Sur and Sol-branded stations have plunged 86 percent, as it struggled to compete with rivals like state-owned YPF (YPFD.BA), which produce their own crude and refine their own fuel.

PDVSA also strove to become an integrated player in Argentina, but efforts to acquire upstream and refining assets never worked out, the person said.

Neither PDVSA nor PDVSA Argentina, the subsidiary that owns the Conosur stake, responded to requests for comment.

And in a sign of how Venezuela’s economic crisis has derailed its ambitions to challenge U.S. diplomatic and financial power through regional energy integration, Conosur has not notified Argentina’s stock watchdog of any payments from PDVSA since Dec. 29, 2017.

The choice to cut off support amounts to a formal abandoning of the upstream goals in favor of strengthening the existing network as part of a restructuring of the company, said the person, speaking on condition of anonymity because they were not authorized to speak publicly.

“The supports were rational when the goal was the whole supply chain,” the person said, adding the company was in talks for a strategic alliance with a fuel supplier to access cheaper refined products, rather than depending on the spot market.

That deal could be necessary to keep the company alive without PDVSA’s support.

The company posted a 177.5 million peso loss in 2017, and warned on Dec. 20 that PDVSA’s transfers had helped it avoid being dissolved in accordance with the requirements of an Argentine corporate law for companies that run out of capital.

Since then, losses have accelerated, to the tune of 226 million pesos in the first half.

Conosur’s struggles have dashed many employees’ hopes that PDVSA’s takeover would signal a new era of prosperity at the chain, which had also struggled under Uruguayan ownership.

“We saw it as a panacea,” said one former employee, laid off earlier this year with around a dozen others. “But it was more or less the same.”

Additional reporting by Alexandra Ulmer in Caracas and Marianna Parraga in Mexico City; Editing by Bernadette Baum

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Pampa Energía Announces Merger Completion

(Pampa Energía S.A., 15.Aug.2018) – Pampa Energía S.A. fully executed the swap of Pampa’s shares for the minority holdings of Petrolera Pampa S.A., Central Térmica Güemes S.A., Inversora Nihuiles S.A. and Inversora Diamante S.A., duly communicated on August 10, 2018.

As a result, the issued capital stock of Pampa increased from 1,938,368,431 to 2,082,690,514 ordinary shares, which net of the share repurchases made under the programs announced on April 27 and June 22, 2018, amounts to 1,938,715,514 ordinary shares as of today.

The finalization of this corporate reorganization is another key milestone in the history of Pampa, ending a process that started with the acquisition of former Petrobras Argentina S.A. back in May 2016, aiming to simplify and maximize the efficiency of the Company’s structure, derive significant operative efficiency, benefit from optimized use of available resources and the streamlining of technical, administrative and financial structures, among other improvements.

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Technology, New Innovations and the LatAm Energy Sector

(Energy Analytics Institute, Pietro D. Pitts, 14.Aug.2018) – The ability to use hydraulic fracturing to tap shale formations, to remotely monitor and manage assets, and use advanced technology to heat reservoirs, are a few of the many new innovations used in the capital intense hydrocarbon sector.

Faced with rising competition worldwide for conventional crude oil and natural gas reserves, both of which are limited and depleting resource bases, the global hydrocarbon sector has in general gravitated towards a common goal, maximizing oil and gas reserve recoveries, while at the same time maintaining or preferable reducing operating costs.

While advanced oil-field technologies such as three-dimensional (3D) and four-dimensional (4D) seismic have been used globally for many years, the varying complexities of today’s hydrocarbon sector require ever more sophisticated technologies with capabilities to process data in real-time, among other advances, and that help international oil companies (IOCs) and national oil companies (NOCs) to make rapid and most importantly, accurate decisions.

Still, the global hydrocarbon sector has been slow to embrace the use of Information Technology (IT) to assist in the collection, processing, analysis and distribution of data in real-time. But, this case has been especially true in the Latin American and Caribbean (LAC) region.

Regional NOCs have slowly taken to incorporate IT into their operations as they have come to realize the advantages outweigh the proposed disadvantages, which include but are not limited to giving access to sensitive information to third-party companies from countries that often do not share the same political or economic ideologies.

Today’s advanced and innovative technologies, including but not limited to: sensors, automated valves, and remote satellites, now help IOCs, and increasingly more regional NOCs, monitor producing fields and wells and any number of assets from remote centralized control centers in cities such as Mexico City, Sao Paulo, Caracas or Buenos Aires.

In essence, these technologies help the companies streamline their processes with the ultimate aim to increase oil and gas recovery factors and production, monitor assets for potential accidents or thefts, while helping to reduce time needed to gather information on their assets while also reducing personnel excesses. The bottom line is that the incorporation of certain technologies has assisted companies to reduce operating costs.

The ability to use hydraulic fracturing to tap shale formations, to remotely monitor and manage assets, and use advanced technology to heat reservoirs, are a few of the many new innovations in use in today’s hydrocarbon sector.

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Argentina’s Pampa Energía Reports 1H:18 Results

(Pampa Energía S.A., 13.Aug.2018) – Pampa Energía S.A. reported results for the six-month period and quarter ended on June 30, 2018. All figures are stated in Argentine Pesos and have been prepared in accordance with International Financial Reporting Standards.

Main Results for the First Semester of 2018 (1)

In order to reflect the financial performance of each business segment, as from 2018 and for the comparative periods, the selling and administrative expenses, as well as the financial results, which used to be assigned to holding and others, will be redistributed among the operating segments.

Consolidated net revenues of AR$39,718 million(2), 74% higher than the AR$22,801 million for the first half of 2017, explained by increases of 113% in power generation, 91% in electricity distribution, 34% in oil and gas, 30% in petrochemicals and 126% in holding and others segment, partially offset by 9% of higher eliminations as a result of intersegment sales.

— Power Generation of 7,948 GWh from 12 power plants

— Electricity sales of 10,894 GWh to 3 million end-users

— Production of 45.9 thousand barrels per day of hydrocarbons

— Sales of 182 thousand tons of petrochemical products

Consolidated adjusted EBITDA(3) for continuing operations of AR$14,881 million, compared to AR$6,435 million for 1H17, mainly due to increases of AR$2,945 million in power generation, AR$3,438 million in electricity distribution, AR$592 million in oil and gas, AR$6 million in refining and distribution, AR$79 million in petrochemicals and AR$1,425 million in holding and others segment, partially offset by higher intersegment eliminations of AR$39 million.

Consolidated profit attributable to the owners of the Company of AR$352 million, lower than the AR$1,810 million gain in 1H17, mainly explained by AR$13,772 million losses accrued due to 55%(4) of AR$ depreciation against US$, currency in which most of the company’s financial liabilities are denominated, whereas the FS reports in AR$, without inflation adjustment.

Main Results for the Second Quarter of 2018(5)

Consolidated net revenues of AR$20,317 million, 74% higher than the AR$11,661 million for the second quarter 2017, explained by increases of 116% in power generation, 78% in electricity distribution, 37% in oil and gas, 57% in petrochemicals and 151% in holding and others segment, as well as 5% of lower eliminations as a result of intersegment sales.

— Power Generation of 3,659 GWh from 12 power plants

— Electricity sales of 5,344 GWh to 3 million end-users

— Production of 45.9 thousand barrels per day of hydrocarbons

— Sales of 95 thousand tons of petrochemical products

Consolidated adjusted EBITDA for continuing operations of AR$7,505 million, compared to AR$3,208 million for Q2 17, mainly due to increases of AR$1,643 million in power generation, AR$1,247 million in electricity distribution, AR$486 million in oil and gas, AR$44 million in petrochemicals and AR$944 million in holding and others segment, partially offset by losses of AR$49 million in refining and distribution, and higher intersegment eliminations of AR$18 million.

Consolidated loss attributable to the owners of the company of AR$2,661 million, higher than the AR$91 million loss in Q2 17, explained by the accrual of AR$11,367 million losses due to 43%6 of AR$ depreciation against US$.

 

1 — The financial information presented in this document are based on financial statements (‘FS’) prepared according to the International Financial Reporting Standards (‘IFRS’) in force in Argentina, and consequently, the FS discriminates the continuing operations from the assets agreed for sale, which are reported as discontinued operations.

2 — Under the IFRS, Greenwind, OldelVal, Refinor, Transener and TGS are not consolidated in Pampa’s FS, being its equity income being shown as ‘Results for participation in associates/joint businesses’.

3 — Consolidated adjusted EBITDA represents the results before net financial results, income tax and minimum notional income tax, depreciations and amortizations, non-recurring and non-cash income and expense, equity income and other adjustments from the IFRS implementation, and includes affiliates’ EBITDA at ownership. For more information, see section 3 of this Earnings Release.

4 — 1H18 nominal exchange rate variation.

5 — The financial information presented in this document for the quarters ended on June 30, 2018 and of 2017 are based on unaudited FS prepared according to the IFRS accounting standards in force in Argentina corresponding to the six-month period of 2018 and 2017, and the quarters ended on March 31, 2018 and 2017, respectively.

6 — Q2 18 nominal exchange rate variation.

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Mexico’s CNH to Speak at EnerCom Conference

(Energy Analytics Institute, Jared Yamin, 9.Aug2018) – The 23rd annual EnerCom conference will take place in the Denver Downtown Westin Hotel on Aug. 19-22, 2018.

Companies with exposure to Latin America that will participate in special panels during the event include the following:

Oil & Gas in Mexico Panel

— Talos Energy Inc. – Gulf Coast region and Gulf of Mexico offshore operations

— International Frontier Resources – drilling the Tecolutla Block onshore Mexico

— Mexican Commission National Hydrocarbons (CNH) – Mexico’s national oil and gas regulator

International Panel

— Jadestone Energy, Inc. – Asia Pacific E&P

— Valeura Energy Inc. – Canadian E&P with principal operations in Turkey

— GeoPark – Latin oil and gas company developing assets in Chile, Colombia, Brazil, Peru and Argentina

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Shell Offers 1H:18 LatAm Updates

(Energy Analytics Institute, Jared Yamin, 1.Aug.2018) – Royal Dutch Shell plc announced the following updates during the first half of 2018.

Mexico

In the deep-water bid round in Mexico in January for the Gulf of Mexico, Shell won four exploration blocks on its own, four with its partner Qatar Petroleum and one with its partner Pemex Exploración y Producción. Shell will be the operator of all nine blocks.

Brazil

Shell won four additional deep-water exploration blocks in Brazil, one block on its own, and three in joint bids with Chevron, Petrobras and Galp. Shell will be the operator of two blocks.

Argentina

In April, Shell signed an agreement to sell its Downstream business in Argentina to Raízen. The sale includes the Buenos Aires refinery, around 645 retail stations, the global commercial businesses, as well as supply and distribution activities in the country. The businesses acquired by Raízen will continue the relationship with Shell through various commercial agreements.

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Pampa Energía Reports on Deferral of Edenor Dealings

(Pampa Energía S.A., 31.Jul.2018) – Pampa Energía S.A. announced its electricity distribution subsidiary Empresa Distribuidora y Comercializadora Norte (‘Edenor’) agreed with the Ministry of Energy to differ 50% of the Own Distribution Cost (‘CPD’) variation adjustment set forth under the Concession Agreement corresponding to the semester February-August 2018, to be charged in six consecutive monthly installments as from February 1, 2019, which does not imply either a negative economic impact for Edenor or any effect in the service’s quality parameters resulting from the Integral Tariff Review (‘RTI’) implemented on February 1, 2017.

Moreover, the Ministry of Energy agreed to carry out the necessary administrative actions towards the regularization of the pending obligations from the Transition Period, as well as to promote the settlement of pending issues related to the New Framework Agreement approved by Decree No. 1,972/2004 in regards to the consumption in shantytowns.

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Trafigura Seeks to End Ricardo Eliçabe Conflict

(Energy Analytics Institute, Ian Silverman, 28.Jul.2018) – Negotiations continue to advance to overcome a labor related conflict at the Ricardo Eliçabe refinery in Bahía Blanca.

The refinery, acquired last May by the Dutch group Trafigura, has been paralyzed for almost two months, reported the daily newspaper Clarin.

The labor conflict stems from a decision by Trafigura in early June of 2018 to no longer acquire crude for processing. The decision affects an estimated 200 workers.

Recently, in a move to prevent layoffs, the union of Petroleum, Gas and Biofuels Workers has started to accept offers related to voluntary departures and retirements.

“If we can confirm the list of workers who would leave the refinery and it’s accepted by the company, we would close the conflict,” reported the daily, citing union official Fabio Pierdominici.

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Advantage Lithium Closes Financing

(Energy Analytics Institute, Ian Silverman, 26.Jul.2018) – Advantage Lithium Corp. closes private placement.

In the process, the company issued 15,585,956 common shares for aggregate gross proceeds to Advantage Lithium of C$12,001,186.

Pursuant to an agency agreement, Advantage Lithium will pay a cash commission of 6% on a portion of the gross proceeds from the private placement to Jett Capital Advisors, LLC.

Additionally, Advantage Lithium announced that Orocobre Limited and an insider of the corporation have exercised participation rights to maintain pro rata ownership. Insiders have participated in this financing purchasing 15,176,956 shares for $11,686,256.

“We are pleased with the successful completion of this financing and the continued support from Orocobre and other existing shareholders,” reported Advantage Lithium in an official statement, citing its CEO & Director David Sidoo. “We have underpinned our shareholder base with the addition of a high-quality institutional investor. Advantage is now in a very strong cash position.”

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Bolivia To Start Work on Transmission Line to Argentina

(Energy Analytics Institute, Ian Silverman, 26.Jul.2018) – In two or three weeks, Bolivia expects to start work on an electrical transmission line that will allow it to export energy to Argentina.

The lines could be finished in 2019 and allow the small land-locked country to export between 80 and 120 megawatts of energy to Argentina, reported the daily newspaper La Razón.

Bolivia expects to have capacity to export 1,000 MW in about four years later or around 2023-2024.

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Frontera Provides Notice of 2Q:18 Conference Call

(Frontera Energy Corporation, 19.Jul.2018) – Frontera Energy Corporation announces that its second quarter 2018 results will be released after market on Thursday, August 2, 2018 followed by a conference call and webcast for investors and analysts on Friday, August 3, 2018 at 8:00 a.m. (MDT), 9:00 a.m. (GMT-5) and 10:00 a.m. (EDT). Participants will include Gabriel de Alba, Chairman of the Board of Directors, Richard Herbert, Chief Executive Officer, David Dyck, Chief Financial Officer and select members of the senior management team.

A presentation will be available on the company’s website prior to the call, which can be accessed at www.fronteraenergy.ca.

Analysts and investors are invited to participate using the following dial-in numbers:

Participant Number (International/Local): (647) 427-7450
Participant Number (Toll free Colombia): 01-800-518-0661
Participant Number (Toll free North America): (888) 231-8191
Conference ID: 2755797

Webcast: www.fronteraenergy.ca

A replay of the conference call will be available until 10:59 p.m. (GMT-5) and 11:59 p.m. (EDT) Friday, August 17, 2018 and can be accessed using the following dial-in numbers:

Encore Toll Free Dial-in Number: 1-855-859-2056
Local Dial-in Number: (416)-849-0833
Encore ID: 2755797

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Argentina Gas Auctions to Begin in August

(Reuters, 19.Jul.2018) – Argentina’s electricity generators will be able to begin bidding for their natural gas supply beginning in August, President Mauricio Macri said, as the country gradually moves away from controls on energy markets.

The change comes as rising output in the Vaca Muerta shale play moves the country closer to a gas surplus. An official said earlier this month that such auctions could account for as much as 70 percent of wholesale supply in March or April of 2019, as the government phases out the current fixed-contract system. (Reporting by Luc Cohen; Editing by Sandra Maler)

***

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.

***

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.”

***

FDI in LAC Region Falls for Third Straight Year

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – Foreign Direct Investment (FDI) in Latin America and the Caribbean fell for a third straight year in 2017, reported the Economic Commission for Latin America and the Caribbean or CEPAL by its Spanish acronym.

The details were revealed in CEPAL’s annual report titled “FDI in Latin America and the Caribbean 2018.”

***

Bolivia, Argentina to Meet Over Gas Volumes

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – The Bolivian government is still analyzing Argentina’s request to increase natural gas export volumes during the winter season and reduce them in summer.

Meetings between officials from Bolivia and Argentina are expected in coming weeks to discuss the proposals, reported the daily newspaper La Razón, citing Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) President Óscar Barriga.

***

Argentina Affirms Liberalization Of Fuels Market

(Institute of the Americas, Jeremy Martin, 11.Jul.2018) – Directly answering a question during an interview in a local media program about the issue of fuels market and pricing, newly-installed Energy Minister Javier Iguacel said: “There is no restriction. There is a free market.” The statement, on its face, does not appear to be overly dramatic, but it is quite important when considered against the backdrop of the last several weeks in Argentina.

In addition to the change at the top of the energy ministry, the government’s negotiations with the IMF, and a major transport strike at the end of June, the Macri administration had felt immense pressure to revise if not reverse several areas of its economic reform agenda that many economists and pundits argued were exacerbating the country’s inflation woes.

Nowhere was this more important than in the energy sector and the issues of tariff adjustments and the liberalization of the fuels market that went into effect at the end of 2017 but were thrown into some disarray when former Minister Aranguren signed a so-called stability pact with several fuel retailers to temporarily freeze fuel prices in an effort to alleviate inflationary pressure.

Indeed, the change of Aranguren for Iguacel was almost certainly a response to political and public relations pressure, but also in favor of new leadership that would again drive forward with Macri’s liberalization plans and objectives. This point was affirmed when, during the same interview, Minister Iguacel spoke very assuredly on how he intended to manage the fuel market challenge: “a policy of total interventionism, where two or three people set prices in a small room has generated many distortions.”

Minister Iguacel has also begun to reorganize key staff and officials in the Ministry of Energy, replacing in many instances holdovers from Aranguren’s tenure particularly those viewed as close to the former minister and part of some of the decisions in his final months with regards to market interventions.
The most notable change to-date has been Minister Iguacel’s bringing aboard Mario Dell’Acqua, the president of Aerolineas Argentinas, the state-run airline. Dell’Acqua will take over as the president of the government-run and ministry of energy-directed Integración Energética Argentina SA (IEASA). In simplistic terms, IEASA is the agglomeration of state energy enterprises that had been assembled under the previous Kirchner governments and nominally under the banner and state firm ENARSA. Dell’Acqua’s role at IEASA will be crucial in unwinding several state-owned energy assets, investments in transmission company Transener and managing bidding for new electric generation capacity, particularly for Buenos Aires.

Nor did Iguacel miss an opportunity to criticize the energy policies, manipulation and intervention in the sector by Macri’s predecessor forcefully noting, for what could be argued was the umpteenth time, that many of the market issues and challenges faced by Argentina were wrought by decisions, lack of decisions or worse, corruption, from the previous administrations.

But beyond those critiques, the more recent developments surrounding the lack of competition, or true liberalization of the market, has also reared its ugly head with regards to supply. In recent weeks certain retailers and fuel stations have been without supply and blame has been aimed at oil companies, the government’s policies, and the market. But it is precisely the latter, or insufficient development of the market that the Macri administration has long argued is the reason for any supply challenges for oil and gas and fuels in Argentina.

Meanwhile, the president of Argentina’s Confederation of Hydrocarbons Trade Entities, or CECHA, Carlos Gold took more direct aim and placed the supply and pricing challenges at the feet of local oil companies who, he argued, have distorted the market by placing a quota on fuel delivery and when the quota is exceeded there is a price differential.

Since taking over the reorganized Ministry of Energy last month, Minister Iguacel has begun to patiently assemble his vision for managing the energy ministry and by extension the energy policy outlook for Argentina under President Macri. The latest statements and very clear indications with regards to the debate swirling around the fuels market underscore that the Macri government remains committed to its energy reform agenda. Moreover, the pressure from inflation, demands and criticisms from friends and foes to perhaps slow down the reform process will not cause a reversal at this point.

***

Pampa Reaches 35-Year Deal in Sierra Chata Block

(Pampa Energía S.A., 10.Jul.2018) – Pampa Energía S.A. announced an Investment Agreement was executed with the Neuquén province, which will grant a new 35-year concession for unconventional hydrocarbon exploitation at the Sierra Chata block (the ‘Block’), aiming at the development of unconventional shale and tight gas in the Vaca Muerta and the Mulichinco formations, respectively.

The Block is located 93 miles northwest of Neuquén city and accounts an area of 213 thousand acres. Currently, the Block produces natural gas from the Mulichinco formation (compact sands or tight gas), with 69 productive wells and 45 million cubic feet of daily net production. Pampa is the operator of the Block and holds 45.6% stake, jointly with Mobil Argentina S.A. and Total Austral S.A. Argentina Branch, with a participation of 51.0% and 3.4%, respectively (the ‘Consortium’).

In consideration for obtaining the new concession, the Consortium committed to make an investment in the Block for an amount of $520 million during the next 5 years (of which Pampa will contribute the corresponding amount according to its share participation), with the objective to continue developing the Mulichinco formation and explore the potential of the Vaca Muerta formation. Moreover, the Consortium disbursed an exploitation bond and a contribution to corporate social responsibility for US$30 million.

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Echo Says Completes Drilling CSo-2001(d) Well

(Echo Energy plc, 9.Jul.2018) – Echo Energy plc successfully completed drilling of the CSo-2001(d) well in which a notable gas column has been interpreted from the wireline logging suite.

The CSo-2001(d) well, located in the Fracción D licence operated by Compañia General de Combustibles S.A. (CGC), reached a total depth of 1511m in the Upper Jurassic Tobifera formation across which extensive gas and light hydrocarbon shows were recorded.

The well encountered over 60m of gas shows through the Upper Tobífera with gas peaks of over 168,000ppm and a full distribution of C1 to C5 hydrocarbons, measured with reference to background gas levels of less than 2,500ppm outside of the zone of interest.

Preliminary wireline log evaluation has now been completed from which the initial interpretations indicate around 30m of potential net pay within the section between 1272m and 1304m. This is towards the upper end of the range used in both contingent and prospective resource estimations and the interpretations are indicative of a gas with a high condensate gas ratio (wet gas).

The CSo-2001(d) well is targeting 19.0 bcf (gross best case) contingent resources assigned to the prospect in addition to a further 18.7 bcf (gross best case) of prospective resources in the recent Competent Person’s Report (CPR) produced by Gaffney Cline & Associates.

A final production casing is now being run prior to completion and testing which will now take place within the testing programme with the Quintana 01 rig, mobilising to the joint operations area during the week commencing 8 July 2018, as previously advised.

The CSo-2001(d) well is the last well in the current joint drilling campaign, and the Petreven H-205 rig will now demobilise to other areas where CGC have sole drilling operations ongoing.

The company will update shareholders with progress on both the testing and workover activities as the programme advances.

Fiona MacAulay, Chief Executive Officer of Echo, commented: “I am delighted that the our fourth well in the current drilling campaign has again successfully interpreted a notable gas column in the Tobifera. With the Quintana 01 completion and testing rig mobilising to the area this week we will be able to test this interval within the forthcoming testing sequence, enabling an early decision to be made on monetisation options in Fracción D. We are now looking forward to commencement of testing on the ELM 1004 well which will be the first well to be tested in this programme.”

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Echo Announces Mobilization of Well Testing

(Echo Energy plc, 6.Jul.2018) – Echo Energy plc announces mobilisation of the Quintana 01 testing / completion rig to the Fracción C, Fracción D and LLC assets (onshore Argentina and operated by Compañia General de Combustibles S.A. (CGC) in joint venture with Echo) is scheduled to commence during the week commencing 8 July 2018.

Mobilisation is anticipated to take approximately 5 days and the rig will be moving firstly to the ELM-1004 well, which was suspended for testing in May 2018. Testing of ELM-1004 is anticipated to take 2-3 weeks, following which the rig will move on to test the remaining three wells in the current four well exploration programme.

The company is yet to determine the order in which the remaining three wells will be tested as the test design for the recent EMS-1001 well, which will include the running of cased hole logs prior to testing, is currently being prepared in conjunction with external experts to optimise the data evaluation. As a result, the position of the EMS-1001 well test within the overall testing programme is yet to be determined and is dependent on finalisation of that design.

Additionally, and whilst the rig is on contract, the company and CGC are considering the completion of a number of additional well interventions and workovers both in Estancia La Maggie (within Fracción C) and Fracción D to either restore or increase well productivity from existing wells.

The company will update shareholders with progress on both the testing and workover activities as the programme advances.

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PentaNova, YPF Discuss Llancanelo Issues

(PentaNova Energy Corp., 3.Jul.2018) – PentaNova has been attempting to negotiate a payment plan for cash call balances with YPF without success to date.

As part of the various Argentina acquisitions completed by PentaNova in August and October 2017 relating to the Llancanelo heavy oil asset, the company, through its wholly-owned subsidiary Alianza Petrolera Argentina SA (Alianza) initially acquired a 39% working interest in the Llancanelo block, and assumed cash call balances owed to YPF, and in November 2017, the company farmed-in to acquire an additional 11% working interest from YPF, subject to regulatory and administrative approvals and to the satisfaction of certain terms and conditions.

The company recently received formal notification from YPF advising that, under the terms of the governing agreement of the Llancanelo joint venture project, oil production pertaining to the company’s participating interest in the concession will be retained by YPF, with sales of such oil production, net of operating costs, being credited towards PentaNova’s outstanding cash call balances. Furthermore, the governing agreement of the Llancancelo joint venture states that a failure to pay the outstanding cash call balance may result in the defaulting party losing it’s working interest. The company is currently holding discussions with YPF in order to find a solution to retain the 39% working interest in addition to exploring financing options to cover the cash call balance. YPF is the operator of the Llancancelo concession.

In relation to the Farm-in agreement, Alianza has not been able to satisfy certain conditions precedent, including securing financing for its farm-in obligations and obtaining regulatory and administrative approval before the longstop date of June 22, 2018, and is consequently engaged in discussions with YPF.

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Free Oil Market to Reign in Argentina

(Bloomberg, 2.Jul.2018) – Argentina’s move to a free market for energy prices remains on track.

A recent decision to cap crude oil prices and limit fuel price gains in order to stem inflation was an outlier, according to Javier Iguacel, the nation’s new energy minister. Restricting crude price increases only extinguishes competition and, in turn, the possibility of cutting costs, he said.

“There’ll be no more agreements,” Iguacel said in an interview. “It’s a free market. Companies can set the fuel prices they consider best for business. And they shouldn’t expect a lower domestic oil barrel either.”

Investors had become jittery because of the agreement from May to July, which capped oil at $68/bbl this month and constrained fuel price hikes in a bid to shield Argentines from a peso devaluation and a rally in crude. Inflation is running at more than 25%. Argentina had moved to a free market in October after years of interventionism.

State-run YPF SA raised fuel prices at the weekend for July by more than was originally agreed with Iguacel’s predecessor, ex-Royal Dutch Shell Plc executive Juan Jose Aranguren. That demonstrates the free market already reigns, he said.

In a sign Argentina is committed to deepening its market shift, Iguacel confirmed the government will eliminate the role of a state intermediary in future power contracts, starting in September. Now, Compania Administradora del Mercado Mayorista Electrico SA — Cammesa for short — sets the prices power generators pay for fuel and natural gas, and sell electricity. But not for much longer.

“We’re going to get out of the current system,” Iguacel said. “Generators will buy direct from producers, and large-scale consumers and distributors will buy direct from generators.”

Completing the move to a deregulated power market will take up to 18 months. Companies will be able to use an auction process to procure the best prices.

In the utilities sector, however, plans to end most subsidies for natural gas and electricity consumption by the end of next year might extend into 2020, the International Monetary Fund’s deadline for the government to balance its books, Iguacel said.

President Mauricio Macri’s Cambiemos alliance will campaign for re-election in 2019 and the removal of subsidies has been unpopular.

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Argentina to Free Retail Fuel Prices

(Reuters, Luc Cohen, 1.Jul.2018) – Argentina will allow fuel retailers to freely set pump prices starting in August, according to an Energy Ministry official familiar with the plan, a move that could encourage badly needed investment in the nation’s oil patch but risks worsening sky-high inflation and angering consumers.

Separately, the ministry is looking to set up an auction process for the natural-gas market that it hopes will lower prices, according to the official, who was not authorized to speak publicly.

The actions signal that President Mauricio Macri is moving ahead with free-market reforms to attract private investment to develop the nation’s abundant shale oil reserves, even as rising global oil prices and a precipitous weakening of the nation’s currency have led to pressure for more interventionist government policies.

The moves will also bring relief to the oil sector. Price controls have squeezed refiners’ margins, prompting one refinery to suspend operations.

Macri’s pro-business government freed fuel prices last year, part of its efforts to unwind state controls on Argentina’s economy. But his administration reversed course in May due to a rapid decline in the peso. The sudden depreciation rattled markets and prompted Argentina to turn to the International Monetary Fund (IMF) for emergency financing.

In May, the government reached a deal for a two-month freeze on pump prices with the three largest oil companies operating in Argentina: state-owned YPF, Shell, and BP’s Pan American Energy. It later set the price of domestic crude at $68, about $10 below the global Brent crude price, to mitigate the impact of freezing fuel prices on refiners’ margins.

By freeing pump prices, the government is betting that gas stations will limit price hikes to avoid losing customers, the official said, and that by freeing crude prices it would encourage more investment in domestic drilling, part of a long-term strategy to wean Argentina from petroleum imports.

“Price controls do not help with anything,” the official said.

The government and the oil companies agreed to loosen the freeze June 1, allowing for hikes of 5 percent in June and 3 percent in July. Macri’s administration had kept the industry guessing as to what it might do in August.

The earlier increases were unsatisfactory to oil industry players, three of whom complained privately to Reuters that the modest bumps did not come close to covering their increased costs.

Last month, global trader Trafigura announced it was suspending activities at its 30,500 barrel-per-day refinery in the port city of Bahia Blanca due to the “mismatch between fuel prices and production and import costs.”

An oil industry executive who spoke with Reuters recently expressed frustration with the bind.

“The adjustment that needs to be done is not 3 percent, it is 45 percent,” said the person, who requested anonymity to speak freely.

VACA MUERTA RAMP-UP

An end to retail price caps would likely infuriate Argentine consumers, who are already incensed at the government for the drop in the peso and inflation that is running at a 26.3 percent annual clip.

But Macri’s government has prioritized reviving the energy sector to shake Argentina’s dependence on imported oil and gas, and to put an end to market-distorting subsidies.

Argentina possesses the world’s second-largest reserves of shale natural gas and ranks No. 4 in reserves of shale oil, mostly in the Vaca Muerta fields in Patagonia. But it faces stiff competition to attract the billions in private investment needed to develop these resources. Oil production is languishing at multi-decade lows.

The picture is brighter with natural gas. Rising output in Vaca Muerta helped boost the country’s production by 3.4 percent in the first quarter of 2018 compared with the same period last year, according to government data.

“We are beginning to have an abundance of gas in Argentina,” the Energy Ministry official said.

As a result, the ministry will create an auction process for wholesale customers to bid on the open market for their natural gas supplies during the low-demand summer months, the official said. The plan is to phase out the current fixed-contract system in a move the government hopes will lower prices.

The auctions could start in September or October, and could account for as much as 70 percent of wholesale supply by March or April of 2019, the official said.

Argentina is also expected to begin gas exports to Chile in the fourth quarter of this year, another result of rising Vaca Muerta output.

Argentina will still need to import liquefied natural gas (LNG) to meet demand in winter months.

***

PentaNova Board Member Resigns

(PentaNova Energy Corp., 27.Jun.2018) – PentaNova Energy Corp. announced that Ms. Susannah Pierce, who joined the board in 2017, resigned from the company’s Board of Directors on June 21, 2018 due to increasing personal and professional commitments.

At the time of Ms. Pierce’s resignation, she served on the Board’s Audit Committee. Following her departure, the PentaNova Board of Directors consists of 8 members.

PentaNova has greatly benefited from Ms. Pierce’s contributions, drawing from her experience and success in the oil and gas industry. The company thanks her for her support and contributions and wishes her continued success in the future.

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Oil Potential in Argentina’s Tobifera Formation

(Energy Analytics Institute, Jared Yamin, 26.Jun.2018) – Echo Energy plc announced a significant light oil column has been interpreted in its third well, onshore Argentina.

The EMS-1001 well, located in the Fraccíon C licence operated by Compañía General de Combustibles S.A. (CGC), reached a total depth of 2460m in the Upper Jurassic Tobifera formation across which significant gas and hydrocarbon shows were recorded.

Preliminary wireline log evaluation has now been completed, and a very significant hydrocarbon column has been interpreted between 1722m and 2220m in the Tobifera Formation. If hydrocarbon saturations across this section are confirmed, the preliminary evaluation might represent an interval of some 500m, which could significantly open up the play for the area.

“We are delighted that initial interpretation of our third well suggests a material and potentially transformational light oil column in the emerging Tobifera play of the basin, exceeding our high case expectations,” announced Echo Chief Executive Officer Fiona MacAulay in an official company statement. “We can already consider results for this well to date to be very encouraging from a volumetric and value perspective. Testing is the critical next step to establish the effectiveness and deliverabilty of the reservoir and we caution that any conclusions prior to test results would be premature.”

A final production casing is now being run prior to suspending the well for testing and the Company now anticipates the arrival of the test rig to the licences in July following completion of its current work programme elsewhere in the basin. The rig will now move to CSo-111(I), the fourth well in this current exploration campaign, located on the Company’s Fraccíon D asset.

Following the potentially material scale of the results of this third well, the company (together with its partner) is now undergoing a review of the testing and forward work programme.

Echo will now take the time required to confirm the early interpretation of the wireline logs and design an effective test program with a view to confirming the scale of our new oil discovery.

Tobifera Information

In the Tobifera interval over 120m of hydrocarbon shows and elevated gas of C1-C5 composition were recorded with gas peaks of over 50,000 ppm, as measured against referenced background gas levels of 3000-6000 ppm outside of the zone. The shows, gas readings and associated lithology encountered in the Tobifera led the company to deepen the well by a further 210m compared to the planned total depth in two additional tranches.

Not all of the column interpreted will produce hydrocarbons, with intervals of effective pay interpreted as being associated with the very elevated gas readings recorded over some 120m of the section. These are likely to correspond to zones of natural fractures in the formation, with additional potential from the interpreted hydrocarbon column likely to require fracture stimulation as is employed elsewhere in the Austral Basin. Initial assessment of the fluid type is a light oil based on pressure data, and results are very encouraging, but the company notes caution should be applied prior to testing of the well.

In the shallower Springhill target, the well encountered over 20m of hydrocarbon shows. The shows in the Springhill target were associated with elevated gas with peaks of over 137,000 ppm, as measured against referenced background gas levels of less than 7,000 ppm outside of the zone and the company is currently evaluating the effective net pay across the Springhill section encountered.

It should be noted that Pre-drill Pmean gross prospective unrisked oil initially in place for the structure targeted by EMS-1001 were estimated at approximately 60 MMbbls for the Springhill Formation,  (included in the recent Competent Person’s Report produced by Gaffney Cline & Associates). No resources were quoted for the Tobifera target as these were not evaluated or audited as part of the CPR process.

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Macri’s Reverse Unnerves Shale Investors

(Financial Times, Benedict Mander, 25.Jun.2018) – The collapse of the Argentine peso and the government’s struggle to tackle soaring inflation are causing disquiet among companies developing Vaca Muerta, one of the world’s largest deposits of shale oil and gas.

In his drive to liberalise Argentina’s energy markets, President Mauricio Macri phased out consumer subsidies and increased tariffs. Local oil prices rose and late last year converged with those of international crude, providing an important stimulus for companies in Vaca Muerta, Argentina’s star investment attraction.

But the government has now capped the price at which companies producing oil in Argentina can sell to refineries, along with the price of petrol at the pump, to shield consumers from rising global oil prices and prevent inflation soaring even further.

Companies now must sell at prices considerably below the international level, which on Thursday was above $77 a barrel for Brent crude, the global benchmark. This, as well as the devaluation of the peso, is hitting profitability and forcing companies to reassess their plans in Vaca Muerta.

“Suddenly from moving in the right direction, it feels like the country is taking a step back,” said Anuj Sharma, chief executive of Phoenix Global Resources, a mid-sized oil company investing in Vaca Muerta. “If there’s one thing markets hate, it is uncertainty. It makes planning very difficult.” He added that it was hard to plan more than 3-5 months ahead.

As little as four years ago, the state oil company YPF estimated that the break-even oil price for wells in Vaca Muerta to be economically viable was about $80 a barrel. Wood Mackenzie, the energy consultants, now estimates the break-even price to be $56 a barrel. After the first well began producing commercially in 2013, Vaca Muerta is now producing 120,000 barrels a day, or more than 10 per cent of national production.

“Just 5 years ago Vaca Muerta was a dream. Now it is starting to become a reality. It is at an inflection point where you can actually make money drilling it,” said one senior executive whose company is investing in Vaca Muerta.

“You can argue that at $67-68 a barrel you can make more than the break-even price, but you are not obliged to drill Vaca Muerta. Elsewhere you get 75 or even higher if oil prices go up . . . if there’s no [price] visibility, it’s very hard to deploy billions into Vaca Muerta.”

With Javier Iguacel replacing Juan José Aranguren as energy minister as part of a shake-up last week, the government’s plans remain unclear. Mr Aranguren, a former executive at Royal Dutch Shell, was widely applauded by the private sector for increasing the tariffs that consumers pay for electricity and natural gas, which enabled the government to cut subsidies in its effort to rein in the fiscal deficit. But he is unpopular with voters.

How Mr Iguacel, a petroleum engineer who also has a private sector background, proceeds depends on a precarious political scenario for Mr Macri, who is seeking re-election next year. Tariff hikes — as well as a $50bn bailout from the IMF in response to the currency crisis — was one of the main motives for trade unions on Monday holding their third national strike since Mr Macri took power.

Freezing prices at petrol pumps may go some way to keeping voters happy, even if it is debatable what impact it might have on inflation, which is running at more than 25 per cent annually. But international companies are not keen on effectively financing Mr Macri’s “gradualist” economic reform programme, which seeks to cushion the impact of austerity on poorer Argentines.

“If prices remain uncoupled, that would be negative. Without doubt, investment would fall, production too, and we would have to import more,” said Daniel Gerold, an energy consultant in Buenos Aires. “If it becomes clear that prices do not follow clear rules or the law is not respected, even if costs are low in Vaca Muerta, investments are not going to come.”

Nevertheless, analysts are broadly optimistic about the prospects for Vaca Muerta, which has seen a sharp fall in costs in recent years, while production has jumped dramatically. Argentina might even have an oversupply of natural gas this summer, when demand is lower, said Amanda Kupchella, an analyst at Wood Mackenzie.

“There are a lot of things that just come with the territory in Argentina — like price controls, working with unions and so on. They are things that operators are used to dealing with,” said Ms Kupchella. “Productivity in Vaca Muerta is so good that it doesn’t seem to be keeping [investors] away . . . wells just seem to be getting better and better.”

Alejandro Bulgheroni, chairman of Pan American Energy Group, expects that in 2-3 years it will be as cheap to drill wells in Vaca Muerta as it is in the US.

“Let’s hope this is resolved and that we return to international prices,” said Mr Bulgheroni. Although it was a “difficult moment”, he recognised that under this government, negotiations had always ended in mutual agreements, with no impositions. “We have lived through much worse times.”

***

Argentine Minister, Gas Distributors Hold Meetings

(Energy Analytics Institute, Aaron Simonsky, 24.Jun.2018) – Argentina’s recently appointed Energy Minister Javier Iguacel conducted meetings with executives from gas distributors and transporters in the Southern Cone country to discuss some important issues.

The meetings come at a crucial time as many companies in the Argentine gas sector face problems related to the rising dollar as well as rising commodity prices. Additionally, the devaluation of the Argentine peso has resulted in higher prices for consumers just as the winter commences, reported the daily La Nacion.

The meetings where aimed to address these issues, among others, and perhaps establish a pricing formula that doesn’t boost consumer prices or result in an increase in energy subsidies.
***

Newsan, Vestas to Invest in Wind Turbines

(Energy Analytics Institute, Aaron Simonsky, 24.Jun.2018) – Newsan Group and Vestas have earmarked investments of $22.4 million in Argentina.

Newsan Group, an Argentina producer of domestic appliances and the country’s largest shrimp exporter, and Danish giant Vestas, plan the investments to manufacture wind turbines and the gondolas that house them at the Campana plant in Buenos Aires.

Vestas, the largest manufacturer of wind turbines in the world, will contribute $17.4 million of the investment total while Newsan will contribute the remaining $5 million, reported the daily La Nacion.

The project is estimated to create 200 direct and another 500 indirect jobs.
***

China Generates Energy, Controversy in Argentina

(Inter Press Service, Daniel Gutman, 22.Jun.2018) – As in other Latin American countries, in recent years China has been a strong investor in Argentina. The environmental impact and economic benefits of this phenomenon, however, are a subject of discussion among local stakeholders.

One of the key areas is energy. A study by the non-governmental Environment and Natural Resources Foundation (FARN) states that China has mainly been financing hydroelectric, nuclear and hydrocarbon projects.

Just four per cent of these investments are in renewable energies, which is precisely the sector where the country is clearly lagging.

“China’s main objective is to export its technology and inputs. And it has highly developed hydraulic, nuclear and oil sectors. There are no more rivers in China where dams can be built and this is why they are so interested in the dams on the Santa Cruz River,” María Marta Di Paola, FARN’s director of research, told IPS.

China is behind a controversial project to build two giant dams in Patagonia, on the Santa Cruz River, which was approved during the administration of Cristina Kirchner (2007-2015) and ratified by President Mauricio Macri, despite strong environmental concerns.

The dams would cost some five billion dollars, with a foreseen a capacity of 1,310 MW.

However, expert Gustavo Girado said that it is not China that refuses to get involved in renewable energy projects, but Argentina that has not yet made a firm commitment to the energy transition towards clean and unconventional renewable sources.

“Like any country with a lot of capital, China is interested in all possible businesses and takes what it is offered. In fact, in Argentina it also has a high level of participation in the RenovAr Plan,” explained Girado, an economist and director of a postgraduate course on contemporary China at the public National University of Lanús, based in Buenos Aires.

He was referring to the initiative launched by the Argentine government to develop renewable energies and revert the current scenario, in which fossil fuels account for 87 per cent of the country’s primary energy mix.

Also participating in this industry are Chinese companies, which during the period January-September 2017 produced 25 per cent of the total oil and 14 per cent of the natural gas extracted in the country.

Since 2016, the Ministry of Energy has signed 147 contracts for renewable energy projects that would contribute a total of 4,466 MW to the electric grid, most of them involving solar and wind power, which are currently under development.

The goal is to comply with the law enacted in 2015, which establishes that by 2025 renewables must contribute at least 20 per cent of the capacity of the electric grid, which today is around 30,000 MW.
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Argentina Resurrects Oil Intervention Panic

(Bloomberg, Jonathan Gilbert, 22. Jun.2018) – Javier Iguacel has left the road for the oilfield, and that may mean a complete about-face on Argentine energy policies.

Iguacel, who’d led Argentina’s national road agency since January 2016, was sworn in Thursday as the nation’s energy minister at a time when his predecessor’s push to sell fuel and oil at market prices is colliding with rising inflation.

Analysts expect Iguacel to quickly cap Argentine crude prices and limit fuel rises. He may also slow a move toward market rates for electricity and natural gas bills, a policy that’s been unpopular among voters.

“Clearly, the liberalization of the oil market did not work,” Juan Manuel Vazquez, head of equity and credit research at Puente Hnos. SA in Buenos Aires, said in a note. “We expect the government to keep intervening through a combination of capped prices for upstreamers, limits to crude exports, and controlled price increases at the pump.”

Juan Jose Aranguren, a former executive at Royal Dutch Shell Plc who’d served as energy minister since President Mauricio Macri took office in December 2015, was replaced last week in a cabinet overhaul as the country grapples with a financial crisis.

Short-lived

The crusader for free oil and fuel markets shifted Argentina to full de-regulation in the last quarter of 2017 after a slow convergence between domestically controlled and international prices. But the recent oil rally and devaluation of the peso forced him to temporarily re-introduce controls in May to help Macri’s battle against inflation, which is running at more than 20%.

Still, Aranguren, who operated outside Macri’s closest circle of advisers, was resisting prolonged intervention, newspaper Clarin reported. “The rest of the economic team felt he was not a real team-player and was also seen radical in his attempt to liberalize the sector,” said Daniel Kerner, Latin America director at Eurasia Group.

Iguacel — who began his career at state-run driller YPF SA before roles at oil service provider Pecom Servicios Energia SA and, in Angola, at Pluspetrol SA — is expected to bow to Macri’s need to intervene heavily in the prices of crude and fuel. He preferred not to give interviews until he’s been in the job for longer.

“Our goal is that what Argentines pay for electricity, natural gas and fuel weighs less and less on their pockets,” Iguacel said after his swearing in ceremony.

Negative sentiment

The re-introduction of price controls and the removal of Aranguren have added to negative sentiment toward Argentina’s oil sector and YPF, Goldman Sachs analysts led by Bruno Pascon wrote in a research note.

Iguacel is also predicted to slow the pace at which the government moves to market rates for electricity and natural gas bills. Argentina needs to shift away from subsidizing energy consumption to close its fiscal deficit, especially with added pressure from the IMF.

While Aranguren was unwavering in his execution of the policy, analysts expect Iguacel to pause the shift as inflation and keeping voters content take priority. But if the cost-cutting government can’t bear the subsidies burden, who will? Companies, says Eurasia’s Kerner.
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Argentina Inaugurates Energy, Production Ministers

(Xinhua, 22.Jun.2018) – Argentinian President Mauricio Macri oversaw the inaugurations of Energy Minister Javier Iguacel and Production Minister Dante Sica on Thursday during a ceremony at the government’s headquarters.

Macri expressed his gratitude to the outgoing Energy Minister, Juan Aranguren and outgoing Production Minister, Francisco Cabrera, for the “important contributions” they made throughout their terms in office.

New Energy Minister, Javier Iguacel, is a former petroleum engineer and until last week was in charge of Argentina’s National Road Network (DNV).
In a press statement released shortly after his inauguration, Igaucel said that the objective of his role would be to “reduce energy costs for Argentinians and allow small and medium sized businesses (SMEs) to grow.”

New Production Minister Dante Sica is an economist and accountant with expertise in development, industrial politics and international negotiations.

After his swearing in, Sica told press that his greatest challenge would be to improve competitiveness and create a fully integrated economy.

He added that “special attention and focus will be given to SMEs, which are great generators of employment.”

Sica previously worked as a secretary overseeing industry, commerce and mining during the administration of former President Eduardo Duhalde.

Also present at the ceremony was the Chief of Cabinet of Ministers, Marcos Pena, and state ministers and secretaries from both chambers of Argentina’s National Congress.
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Echo Energy Reports 2nd Price Extension

(Energy Analytics Institute, Ian Silverman, 21.Jun.2018) – A second and final Price Monitoring Extension has been activated in this security.

The auction call period is extended in this security for a further 5 minutes, announced Echo Energy in an official statement.

“Following the first price monitoring extension this security would still have executed more than a pre-determined percentage above or below the price of the most recent automated execution today. London Stock Exchange electronic order book users have a final opportunity to review the prices and sizes of orders entered in this security prior to the auction execution,” reported Echo.

Echo added: “The applicable percentage is set by reference to a security’s Millennium Exchange sector. This is set out in the Sector Breakdown tab of the Parameters document at www.londonstockexchange.com/tradingservices. Additionally, this information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider.”

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Argentina to Replace Energy and Production Ministers

(Reuters, Maximilian Heath, 17.Jun.2018) – Argentina´s government said on Saturday that it would replace its energy and production ministers, just two days after the resignation of former Central Bank President Federico Sturzenegger.

The shake-up follows several tumultuous weeks for the government of the center-right President Mauricio Macri, with extreme currency volatility leading Argentina to seek a politically contentious $50 billion lifeline from the International Monetary Fund.

The government said in a statement that Javier Iguacel, previously administrator general of the agency that oversees Argentina´s road network, would take the place of Juan José Aranguren as head of Argentina´s Energy Ministry.

Dante Sica, an economist and former secretary overseeing industry, commerce and mining under former President Eduardo Duhalde would replace Production Minister Francisco Cabrera.
Cabrera will move on to serve as President of Argentina´s Bank of Investment and International Trade (BICE), as well as advisor to President Mauricio Macri, the statement said.

Central Bank President Federico Sturzenegger resigned on Thursday in a move aimed at restoring trust in the central bank and calming markets.

Argentina´s government also said on Saturday that the country´s top mining agency would now report to the Ministry of Production. It had previously been housed within the Energy Ministry, the statement said.
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Rick Perry Wants Argentina be More Like Texas

(Bloomberg, 17.Jun.2018) – The U.S. government is getting in on a shale boom 5,000 mi (8,000 km) from home.

Energy Secretary Rick Perry will help Argentina connect with U.S. companies that have shale oil and gas expertise as President Mauricio Macri — facing a natural gas trade deficit — hurries to replicate the success of the Permian basin, in Perry’s home state of Texas.

Fostering energy production from a regional ally will bolster the geopolitical influence of the U.S., Perry told reporters in Bariloche, Argentina.

“One of the things that I offered Juan Jose is U.S. technology partnerships, to make the introductions with the private sector,” Perry said, referring to Juan Jose Aranguren, Macri’s energy minister. “The technology that has allowed for the shale gas revolution in America we want to make available to Argentina.”

Perry was meeting Aranguren and other G20 counterparts in snow-covered Bariloche to discuss a global transition to cleaner energy — especially gas. Argentina is ramping up production of the fuel in Vaca Muerta, the Patagonian shale play where Chevron Corp. and DowDuPont Inc. were among the first to get drilling going.

Argentina’s state-run YPF SA, the biggest operator in Vaca Muerta, sees the next phase of shale development driven by mid-cap independent companies lured from the Permian. Their arrival will increase competition and, in turn, slash costs, Aranguren told reporters in Bariloche.

Now, Perry wants to add to that, bringing in U.S. pipeline developers to expand the play’s infrastructure and petrochemical companies to process the hydrocarbons once they’ve been moved out of the isolated shale fields.

Boosting output in Vaca Muerta, one of the world’s largest shale plays that remains largely untapped, will help the U.S. to direct geopolitics amid fractious relationships with major oil producers Russia and Venezuela, Perry said.

“Being able to not be held hostage by countries who don’t share our values is really important,” Perry said. “President Macri’s policies are right in line with U.S. values.”

Perry will advise Argentina — already facing transportation bottlenecks as YPF and billionaire Paolo Rocca’s Tecpetrol SA spur gas production — on avoiding pipeline capacity issues that have begun to plague the Permian, he said.

Transportadora de Gas del Sur SA recently announced it will build a $300-million gas pipeline in Vaca Muerta.

Perry will visit Vaca Muerta in the near future, Aranguren said.
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ENAP to Invest $354 Mln in Project in Argentina

ENAP’s AM3 platform. Source: ENAP

(Energy Analytics Institute, Aaron Simonsky, 15.Jun.2018) – Chile’s ENAP plans investments of $354 million in a project located in the eastern mouth of the Strait of Magellan, on the Argentine side.

The company plans the investments in its Magallanes Area Incremental Project (PIAM) project, which has potential to substantially increase crude oil and natural gas production, ENAP reported in an official statement.

Despite severe weather conditions at sea in southern Argentina, the AM3 platform is already underway to produce 100% of the proposed volumes of oil and gas, becoming the last milestone of the PIAM of ENAP Sipetrol in that country.

With installation of the heliport, of approximately 60 tons, at 37 meters above sea level — the highest altitude of the expansion project was reached — the PIAM already has the entire infrastructure to start producing the incremental oil and gas in its entirety.

Natural gas production is expected to rise 60% to 4 million cubic meters per day (MMcm/d) from 2.4 MMcm/d, while associated oil production is expected to rise 43% to 1,000 cubic meters per day from 700 cubic meters per day currently.
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G20 Energy Heads Gather in Argentina

(Xinhua, 14.Jun.2018) – Energy ministers from G20 countries met here on Thursday to discuss transitioning to renewable energy and other alternative green energy.

The gathering in Argentina’s southwestern city of Bariloche is part of the fourth ministerial meeting of the G20 group of developed and emerging economies, which Argentina currently chairs.
Ministers of energy and natural resources, as well as experts from international organizations such as OPEC and the OECD, are to discuss ways to promote energy efficiency, industry transparency and technology in the sector, as well as alternative sources of energy.

Argentine Energy and Mining Minister Juan Jose Aranguren, along with Canada’s minister of natural resources, James Gordon Carr, were to hold a press conference on the deliberations later in the day.

The G20 envoys were also scheduled to tour INVAP, Argentina’s state-run company specializing in designing and building equipment for nuclear, oil, chemical and aerospace industries.
A press conference is also scheduled after the meeting concludes Friday afternoon, with Aranguren, Thorsten Herdan, Germany’s director general of energy policy, and Yoji Muto, Japan’s minister of economy, trade and industry.

The Group of 20 accounts for 77 percent of the world’s energy consumption and more than 80 percent of the world’s renewable energy capacity, as well as 85 percent of global GDP, two-thirds of the world’s population and 75 percent of global trade.
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Argentina to Export Natural Gas to Chile by YE:18

(Reuters, Luc Cohen, 14.Jun.2018) – Argentina will begin exporting natural gas to neighboring Chile before the end of the year, the energy ministers of both countries said on Thursday, as output from the Vaca Muerta shale field rises.

The two South American countries had previously signed deals allowing for the export of gas or electricity in emergency situations, but required that an equivalent amount be re-imported within twelve months.

Chilean companies are in talks to sign import deals and the first flow of gas across the Andes could come in October or November of this year, Chile energy minister Susana Jimenez said in an interview in Bariloche, Argentina at the G20 Meeting of Energy Ministers.

“We see a great opportunity for mutual benefit,” she said, adding that the gas could come both from the Neuquen basin, home to Vaca Muerta, and from the Austral basin in southern Argentina.

The gas could be used for electricity generation, replacing imports from elsewhere, or to heat homes in areas where families still depend on wood, a source of pollution in the center-south region, Jimenez said. Chile produces little hydrocarbons of its own.

The unrestricted exports would mark a turning point in energy trade in the region. Argentina was once a major supplier of natural gas to Chile, but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran low.

Argentina sits atop the world’s No. 2 shale gas reserves but is still a net energy importer. Since taking office in December 2015, President Mauricio Macri has sought to loosen labor rules and boost infrastructure to attract investment.

Rising output from Vaca Muerta could help the country export more than it imports by 2021, Argentina’s energy minister Juan Jose Aranguren said at a news conference. The country is set to import slightly more than 50 cargoes of liquefied natural gas (LNG) this year, down from 68 last year and 90 in 2015.

Argentina still needs the LNG imports to meet peak winter demand, but in the southern hemisphere summer months it could see a surplus, Aranguren said.

“This summer we will start to sign permits for exporting natural gas to Chile without any restrictions,” he said.
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G20 Holds Energy Conference in Argentina

(Efe, 13.Jun.2018) – Energy sector representatives from the G20 countries are attending on Wednesday this year’s second meeting in Argentina to address the energy transition.

Access to electricity in Latin America and the Caribbean, access to information about the energy sector and the use of subsidies to promote new energy technologies are some of the topics that will be discussed during the meeting taking place in the Patagonian town of Bariloche, organizers said.

The first conference on the energy transition took place in Buenos Aires in February as part of the preparatory meetings for the G20 summit of heads of state and government, which will take place here in November.

Wednesday’s meeting between government officials and invited guests from the member countries takes place one day before the G20 energy ministers summit.

“This meeting will allow us to discuss some topics that are crucial to reach a common position between the G20 countries,” the secretary of Energy Planning of the Argentine Ministry of Energy, Daniel Redondo, said during the opening ceremony.

According to the G20, one of the main objectives of tomorrow’s summit is to “diversify the economy and strengthen energy security until it becomes possible to improve air quality and mitigate climate change.”
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Pampa Reaches 35-Year Extension in El Mangrullo Block

(Pampa Energía S.A., 5.Jun.2018) – Pampa Energía S.A. was granted a 35-year period extension to the operation of the El Mangrullo block for the development of unconventional gas (shale and tight), within the new exploitation license that Neuquén province granted to the Cutral Có and Plaza Huincul Inter-city Autonomous Body (‘ENIM’), which will come into force with the corresponding Provincial Order.

Currently, the El Mangrullo block is 100% developed by Pampa, is located in the mid-east of Neuquén province and accounts an area of 35,830 acres. Pampa produces natural gas from Mulichinco formation (compact sands or tight gas), with 41 productive wells and 97 million cubic feet per day. In consideration for the operation’s period extension, Pampa committed to disburse $205 million for a pilot investment plan during the next 5 years, with the objective to continue developing Mulichinco formation by drilling 15 wells, in addition to 1 well targeting Tordillo formation and explore the potential of Vaca Muerta formation (shale gas), by drilling 3 additional horizontal wells. Moreover, Pampa paid an exploitation bond and a contribution to corporate social responsibility that amounts to US$15.4 million.

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Pampa Energía Inaugurates 1st Wind Farm

(Pampa Energía S.A., 24.May.2018) – Pampa Energía S.A. inaugurated its first Wind Farm named Engineer Mario Cebreiro (‘PEMC’), which given the technology and size, it is also the first project to reach such milestone under Renovar 1 program.

The opening counted on the presence of President of Argentina Mauricio Macri, the Minister of Energy and Mining (‘MEyM’) Juan José Aranguren, the mayor of Bahía Blanca Héctor Gay, as well as all Pampa’s management, among other authorities and special guests.

The PEMC project consisted in the building and installation of 29 Vestas wind generators, with 87 meters of altitude and three spades with a diameter of 126 meters driving the turbine, all located at Corti, 20 km away from Bahía Blanca city, in the province of Buenos Aires. The PEMC will contribute to the national grid 100 MW of renewable energy and required a total investment of $139 million. It is worth highlighting that the launching of PEMC was achieved before the originally estimated dates.

Moreover, under MEyM Resolution No. 281-E/2017, which regulates the Term Market for Renewable Energy (‘MAT ER’), the Company was granted by CAMMESA the dispatch priority for three new projects, which production will be destined to fulfill large electricity consumption users through private power purchase agreements. Two out of the three projects, Pampa Energía II Wind Farm (‘PEPE II’) and Pampa Energía III Wind Farm (‘PEPE III’) each 53 MW of installed capacity, already began construction stage and the Company estimates its commissioning by second quarter of next year, requesting approximately US$135 million of investment. PEPE II is located nearby PEMC, and PEPE III is placed in Coronel Rosales, 25 km away from Bahía Blanca city. The third project will be Pampa Energía IV Wind Farm (‘PEPE IV’), located at Las Armas area, Maipú, Province of Buenos Aires. PEPE IV will additionally contribute 50 MW of gross capacity through estimated $74 million of investment and commissioning by fourth quarter of 2019.

The 156 MW under construction, in addition to the newly inaugurated PEMC, adds up as of today 256 MW of renewable sources developed in Pampa. Moreover, with this new operating addition Pampa has 11 power plants, 3.9 GW of current installed capacity, but totaling 4.4 GW of capacity once all 554 MW of committed expansion projects begin operations.

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Energy, Education, and Learning Through NRG ED

(Energy Analytics Institute, Aaron Simonsky, 24.May.2018) – Energy Analytics Institute, formerly LatinPetroleum Inc., continues to promote its “Energy Education Initiative” in the Americas, also known as “NRG ED.”

NRG ED is structured to work with K-12 schools, community colleges, four-year colleges and universities, workforce training programs, communities and businesses, and aims to promote reduction of non-renewable energy usage in favor of renewable energies. However, the core of the initiative is education, without which the NRG ED initiative would not be.

“At its core the initiative is really focused on education,” said Chad Archey, Editor-in-Chief at Energy Analytics Institute from Atlanta, Georgia.

EAI views basic education as most important in the overall learning process and also promotes educational initiatives and research from grade school to the professional level related to the energy sector. EAI aims to foment constructive dialogue regarding energy usage as well as ways to reduce the carbon footprint left by non-renewable energy resources through the following: 1) educational consultancy, 2) development and distribution of educational and training materials, and 3) promotion of debate and discussion regarding renewable energy alternatives.

Energy Analytics Institute (EAI), formerly LatinPetroleum Inc. (dba LatinPetroleum.com), is a Houston-based independent company focused on producing non-biased news, updates and special reports for investors interested in the Latin America and Caribbean petroleum sectors.
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Mexico’s Vista Oil & Gas Signs Onshore JV with Jaguar

(Reuters, 23.May.2018) – Mexican energy investment firm Vista Oil & Gas will tie up with Jaguar Exploracion y Produccion on three onshore projects, the company said on Tuesday, acquiring 50 percent stakes with an initial payment of nearly $27.5 million.

Vista will pay Monterrey-based Jaguar a further $10 million to compensate the firm for past investments in the projects, or so-called carry costs, the firm said in a statement.

The three onshore projects were won at auctions last July by Jaguar, an upstart oil firm owned by Mexico’s Grupo Topaz, and are located in the Gulf coast states of Tabasco and Veracruz.

Two of the blocks will be operated by Vista, while the other will be run by Jaguar, in what Vista described as Mexico’s first joint venture between two private oil firms.

The joint venture between the two must still be approved by the National Hydrocarbons Commission, the Mexican oil regulator that supervises exploration and production contracts.

Last year, Vista became Mexico’s first publicly traded oil firm, four years after a landmark energy reform ended the decades-long monopoly enjoyed by state-owned Pemex.

Vista, which has targeted assets for possible acquisition in Mexico, Brazil, Colombia and Argentina, is backed by private equity firm Riverstone Capital.

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