Ecuador Non-Oil Exports Up in 2018

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

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

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Ecuador Extracting Nearly 523 Mb/d

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

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

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ENAP to Spend $65.2 Mln in Ecuador

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

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

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

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Ecuador Court Upholds $9 Bln Chevron Ruling

Oil site in Ecuador. Source: AP

(AP, 13.Jul.2018) – Ecuador’s highest court has upheld a US$9.5 billion judgment against oil giant Chevron for decades of rainforest damage.

Plaintiffs celebrated the constitutional court’s decision announced Tuesday night, saying it should pave the way for indigenous tribes to receive compensation for oil spills that contaminated groundwater and soil in their Amazon home.

“There’s no doubt now that we’ve won this long legal battle,” said Pablo Fajardo, the plaintiffs’ lawyer.

But the ruling is largely symbolic, as Chevron no longer operates in the South American country. That means Ecuador’s government will have to pursue assets owned by the San Ramon, California-based company in foreign courts, where it so far has had little luck.

Chevron had long argued that a 1998 agreement Texaco signed with Ecuador after a US$40-million clean-up absolves it of liability. Chevron bought Texaco in 2001.

Last week, an appeals court in Argentina rejected an attempt by Ecuador to collect on its award, echoing earlier rulings by courts in Canada, Gibraltar and Brazil.

In 2014, a US court of appeals in New York also denied Ecuador’s request, arguing that the original judgment was obtained through bribery, coercion and fraud.

Chevron said in a statement that the high court’s decision “is consistent with the pattern of denial of justice, fraud and corruption against Chevron in Ecuador”.

It added that Chevron “will continue to work through international courts to expose and hold accountable those responsible for the judicial fraud and extortion against Chevron in Ecuador”.

In an added twist, the American lawyer, who for years represented Ecuador in the matter, was barred on Tuesday from practising law in New York state.

The New York state appeals court found Steven Donziger guilty of professional misconduct, saying that in his appeal of the 2014 ruling, he did not challenge the judge’s findings of bribery, witness tampering, and the ghostwriting of a court opinion.

The findings “constitute uncontroverted evidence of serious professional misconduct which immediately threatens the public interest,” the appeals court said in announcing its suspension of Donzinger.

Donzinger did not immediately respond to an emailed request for comment.

***

Ecuador’s ITT Output Around 60 Mb/d

(Energy Analytics Institute, Piero Stewart, 13.Jul.2018) – Oil production from the Ishpingo, Tambococha and Tiputini or ITT field is around 60,000 barrels per day.

With additional work activities, production from ITT is expected to reach up to 70,000 b/d, reported the daily newspaper El Universo, citing PetroAmazonas EP Manager Álex Galárraga. The official didn’t say when production is expected to approach these levels.

Galárraga added that the state company continues to work with the respective to obtaining the environmental license for Ishpingo, which isn’t likely to be obtained until September of 2018, he explained.

***

Indigenous Groups Await Chevron Payments

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – Indigenous groups in Ecuador that were affected by activities of San Roman, California-based Chevron in the country continue to await payment from the oil giant.

Ermel Chávez, from the Amazon Defense Front, recently spoke about the issue during a press conference in Ecuador.

***

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.”

***

Ecuador, Venezuela Output Down, OPEC Reports

(Energy Analytics Institute, Ian Silverman, 11.Jul.2018) – The Organization of Petroleum Exporting Countries published its July 2018 edition of its Monthly Oil Market Report (MOMR).

Crude oil production from Ecuador and Venezuela — the lone countries from Latin America to be members of OPEC — fell this month (see charts).

***

 

 

 

EP PetroEcuador, Politécnica Nacional Sign Deal

(Energy Analytics Institute, Ian Silverman, 10.Jul.2018) – EP PetroEcuador and the Escuela Politécnica Nacional (EPN by its Spanish acronym) signed an Inter-institutional Technical Cooperation Agreement that relates to the early detection of seismic or volcanic phenomena that may affect the transport, storage, refining and commercialization of hydrocarbons of the state oil company, EP PetroEcuador announced in an official statement on its website.

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UDLA Students Visit Soil Treatment Center

(Energy Analytics Institute, Ian Silverman, 10.Jul.2018) – Nearly 27 engineering students studying Environmental Engineering and Biotechnology Engineering at Ecuador’s Americas University (Universidad de las Américas or UDLA by its Spanish acronym) visited the El Salado Soil Treatment Center, located in the province of Napo.

The students visited the site with the objective to gain knowledge of remediation processes utilized in the area by PetroEcuador, announced the state oil company in an official statement on its website.

The visit today was a way to understand how in reality the soil is treated from an environment point of view, reported EP PetroEcuador, citing engineering student Solange Figueroa.

***

PetroAmazonas EP Producing Close to 405 Mb/d

(Energy Analytics Institute, Ian Silverman, 5.Jul.2018) – Ecuador’s PetroAmazonas EP actual production is close to 405,000 barrels per day (b/d).

The company’s average cost was $17.08 per barrel in May 2018, reported the entity in an official statement on its website.

***

Ecuador Cos Invest $400 Mln in Certificates

(Energy Analytics Institute, Jared Yamin, 4.Jul.2018) – The two electric companies from the South American country will invest a total of $400 million in Treasury Certificates.

The companies, the Electricity Corporation of Ecuador (Celec by its Spanish acronym) and the National Electricity Corporation (Cnel by its Spanish acronym), will invest $300 million and $100 million, respectively, reported the daily newspaper El Universo.

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Ecuador Looks to Avoid Issuing More Debt

(Energy Analytics Institute, Jared Yamin, 4.Jul.2018) – The South America country will explore other financial options to cover its deficit of some $9.5 billion.

“We don’t believe it’s the best time for Ecuador to issue bonds,” reported the daily newspaper El Universo, citing announcements made by Ecuador’s Finance Minister Richard Martinez during a press conference in Quito.

***

OPEC Ministerial Meeting in December

(Energy Analytics Institute, Piero Stewart, 25.Jun.2018) – Ministers from the Oil Exporting Countries Organization (OPEC) announced during meetings in Vienna, Austria that the 5th OPEC+ countries Ministerial Meeting will take place in the same city on December 4, 2018.

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OPEC Planning to Boost Output by 1 MMb/d

Twitter post from Ecuador’s Hydrocarbon Ministry.

(Energy Analytics Institute, Jared Yamin, 22.Jun.2018) – OPEC is looking to boost crude oil output by 1 million barrels per day (MMb/d).

The production agreement goes into effect in July 2018, the Organization of Petroleum Exporting Countries (OPEC) announced today in Vienna, Austria. Ecuador’s Hydrocarbon Ministry later published the details in a Twitter post.

***

OPEC’s Vienna Meeting: The Challenge of Failing NOCs

(The Council on Foreign Relations, Amy Myers Jaffe, 19.Jun.2018) – As energy ministers from major oil producing countries gather in Vienna this week to discuss the stability of global oil markets, the variables that will dictate outcomes have rapidly shifted. Pre-meeting narratives that previously focused on the appropriate level of external private investment—either too much, in the case of U.S. shale producers, or too little, in the case of private sector international oil companies—look woefully inadequate to explain current oil market conditions. Instead, how to deal with the accelerating political and institutional breakdown of several national oil companies across multiple continents now stands out as a pressing structural challenge for the Organization of Petroleum Exporting Countries (OPEC) and U.S. policymakers alike. I highlighted this problem vis a vis Venezuela last March. Stated intentions to replace lost barrels from Venezuela and potentially Iran has brought acrimony back into the OPEC fray. U.S. plans to sanction Iran’s oil exports are the most recent publicly visible geopolitical irritant, but the history has shown that eliminating the endogenous geopolitical swings in the oil cycle takes more intervention and planning capability than even the most well intended partnerships can master, much less nation states whose relations have been punctuated by direct military threats or proxy wars. Talk of a sustained Saudi-Russian alliance that would be effective in eliminating the factors that could cause gyrations in oil prices seem overstated.

All of OPEC’s fourteen members have flagship national oil companies (NOCs), that is, state-controlled entities that oversee their nation’s energy industry. Other important oil producing countries such as Brazil, Mexico, and Russia also have NOCs that dominate their oil and gas sectors. Many of these national firms are facing structural budgetary, corruption, or other internal political challenges, including attacks on facilities by local rebel groups, criminal gangs, terrorists, cyber hackers, and/or armed combatants in ongoing military conflicts.

As a result of these ongoing NOC difficulties, supplies from several OPEC countries, Venezuela, Libya, Iraq, Iran, Nigeria, and Angola have been volatile in recent years. In particular, the collapse of Venezuela’s oil industry and a slide in deep water oil production from Angola have been more instrumental to the market success of OPEC’s agreement with Russia and other non-OPEC oil producers than the producer group’s “planned” cuts in reducing excess inventories by almost 200 million barrels since early 2017 and pushing Brent oil prices up from about $55 to $75 a barrel. Cornerstone Macro noted in a recent report that oil stocks in industrialized countries experienced a counter seasonal decline of three million barrels in April, as compared to the more customary twenty million buildup on the heels of reduced global supplies and more robust than expected U.S. and global economic growth.

While Saudi Arabia, Kuwait, the United Arab Emirates, and Russia did make promised output reductions to help tighten oil supply over the course of 2017, unintended production declines continue to be more material. Not only did oil output declines from Venezuela, Algeria, Angola, Ecuador, and Gabon amount to losses of close to one million barrels a day since early 2017, according to Citibank, markets have come to expect accidental supply disruptions from conflict prone oil regions in Libya and Nigeria. That reality prompted one prominent energy columnist to conclude that OPEC has become “an increasingly unreliable supplier of an essential commodity.”

Whatever the outcome of the OPEC-non-OPEC Vienna group’s deliberations this week, it could turn out to be only a temporary fix to this more structural NOC problem than generally understood. Right now, OPEC spare productive capacity is highly limited. Saudi Arabia and Russia together would probably have difficulty adding much more than 1.5 million barrels a day to markets through the end of the year. Ongoing problems in Libya and Venezuela, combined with renewed sanctions on Iran, could possibly take more than that off the market. And what if a new supply problem emerges? Saudi Arabia and Russia are discussing longer run cooperation. What would that look like in a world where uncertainty plagues many national oil companies around the world, including, perhaps, their own firms?

Does budget-constrained Saudi Arabia agree to divert billions in tandem with Russian firms to expand additional oil fields’ productive capacity down the road to capture future market share that could be available as NOCs in other countries continue to fail? If Saudi and Russia make capacity expansion pushes, what becomes of OPEC as a coherent organization? Will the Vienna group need to shrink in number? Conversely, if Saudi Arabia and Russia choose to make only a quick stop-gap measure just to keep markets from overheating in the next few months and don’t invest in new capacity, will they sacrifice future revenues to private oil and gas investors who can bring on capacity more quickly if NOC capacity continues to falter?

The 2014-2015 price collapse has proven that a year or two of low prices won’t be sufficient to knock out growth in U.S. tight oil. That means restarting a price war in the short run isn’t an ideal option for OPEC, especially if those flooding the market do not appear to be able to survive the prolonged revenue drop that would make a price war option an effective threat. And my guess is that low oil prices also aren’t likely to be sufficient to knock out capital investment by the major international oil companies (IOCs). Those companies have started to pivot their strategies to direct their capital spending to activities that will be more productive than those pursued over the last decade when booking new large reserves was the priority. Rather, companies are focused on spending programs that can bring higher production more quickly, such as directing capital spending to shorter cycle field extensions and satellite field developments that can bring first oil into the market rapidly within one to three years (as opposed to mega-projects that took near a decade to develop). Companies are also developing new techniques to reduce the cycle time and costs on challenging green field projects.

Moreover, innovation in the private oil and gas sector is increasingly de-risking the landscape for future oil and gas investment for private investors. As technology improves, companies are going to be able to squeeze more barrels out of all kinds of existing known in place source rock, not just oil and gas from shale formations. The most recent example is the Austin Chalk where U.S. companies are rushing to test new drilling techniques to positive results.

There’s an additional rub. Saudi and Russian efforts could have trouble influencing intermediate oil demand trends. Even if the Vienna group takes production increase decisions this week that staves off any economically crippling oil price shock that could have sent oil demand into a tailspin, caution signs are already emerging that oil prices even at $70 a barrel are creating some economic headwinds. Markets are already nervous about trade wars. Reports are emerging that high fuel prices are hindering economies within the Euro zone and elsewhere. Rising fuel prices are visibly creating economic and political problems in India and other developing economies. And the United States needs strong demand growth elsewhere to manage its own economic issues. In the case of an unexpected global economic slowdown, OPEC supply disruptions could take a back seat again to “lower for longer” story lines about failing oil demand (potentially in the midst of rising U.S. production in 2019), which could make any discussion of a more permanent, workable Saudi-Russia oil alliance even harder to envision.
***

PetroAmazonas Production Costs Below $20/bbl

(Energy Analytics Institute, Aaron Simonsky, 15.Jun.2018) – Production costs at the state entity remain below the $20 per barrel mark.

PetroAmazonas EP’s production costs rose slightly to $17.01/bbl in May 2018, up sequentially from $16.46/bbl in April 2018. For the first five months of 2018, the company’s production costs have averaged $17.08/bbl, according to data posted to Twitter by EP PetroEcuador.

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PetroEcuador Activities Normal After Earthquake

(Energy Analytics Institute, Aaron Simonsky, 15.Jun.2018) – Ecuador’s EP PetroEcuador announced all its activities continue under normal conditions after a magnitude 5 earthquake was reported this morning in Ecuador.

The epicenter was identified as Nobol (Guayas), the state entity reported in a Twitter posts.

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Ecuador Oil Output at 519 Mb/d in May 2018

(Energy Analytics Institute, Jared Yamin, 15.Jun.2018) – Ecuador’s production of crude oil reached 519 thousand barrels per day (Mb/d) in May 2018, up compared to 518 Mb/d in April 2018, the Organization of Petroleum Exporting Countries (OPEC) reported in its monthly oil report.

Ecuador, one of only two OPEC member nations in Latin America, produced 545 Mb/d in 2016 and 530 Mb/d in 2017, according to OPEC.

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Venezuela Oil Output Slides to 1.4 MMb/d in May 2018

(Energy Analytics Institute, Piero Stewart, 14.Jun.2018) – Venezuela’s oil production continues its downward slope.

Venezuela’s crude oil production fell to 1.392 million barrels per day (MMb/d) in May 2018, according to a recent report by the Organization of Petroleum Exporting Countries (OPEC), citing data from secondary sources. This compares to production of 1.434 MMb/d in April 2018, 1.474 MMb/d in March 2018, and 2.154 MMb/d in 2016.

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Ecuador Producing 522 Mb/d of Crude Oil in late May 2018

(Energy Analytics Institute, Jared Yamin, 29.May.2018) ‐- South America’s Ecuador is producing 522,372 barrels per day.

Total crude oil production from the small OPEC member nation was 522,372 barrels per day (b/d) on May 28, 2018, according to data posted in a report available on the website of the Ecuador’s Hydrocarbon Regulation and Control Agency or ARCH by its Spanish acronym. Of the total production, Petroamazonas EP contributed 403,141 b/d, while private companies contributed the remaining 119,232 b/d.

Ecuador’s average crude oil production was 512,000 b/d during the three-month period January thru March of 2018, according to data from Ecuador’s Central Bank or BCE by its Spanish acronym.

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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.
***

ECLAC Ssays Venezuela’s Economic Activity to Fall 8.5% in 2018

(Energy Analytics Institute, Aaron Simonsky, 1.May.2018) – The United Nations Economic Commission for Latin America and the Caribbean, also known as ECLAC or CEPAL by its Spanish acronym, projects economic activity in troubled Venezuela will contract 8.5% in 2018.

Gross domestic product or (GDP) estimates for other important countries and regions follows:

TABLE 1: ECLAC GDP ESTIMATES FOR 2018

Country/Region —————————- GDP (Est.)

Argentina ———————————— 2.5%
Bolivia ————————————— 4.0%
Brazil —————————————- 2.2%
Chile —————————————– 3.3%
Colombia ———————————— 2.6%
Ecuador ————————————– 2.0%
Paraguay ————————————- 4.0%
Uruguay ————————————– 3.0%
Venezuela ———————————– (8.5%)

Latin America and Caribbean (LAC) —- 2.2%
South America —————————— 2.0%
Central America and Mexico ————- 2.6%
Central America —————————- 3.6%
Latin America ——————————- 2.2%
Caribbean ———————————— 1.4%

Source: ECLAC, April 2018
***

Shushufindi Plant Has 20 Mb/d LPG Capacity

(Energy Analytics Institute, Clifford Fingers III, 10.Mar.2017) – Ecuador’s Shushufindi refinery has the capacity to bottle or fill 20,000 cylinders per day of liquefied petroleum gas or LPG, Ecuador’s Hydrocarbon Ministry wrote in a twitter post, citing Oil Minister Jose Icaza Romero during a visit to the plant.

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ICSID Orders Ecuador Pay ConocoPhillips $380 Mln

(ConocoPhillips, 8.Feb.2017) – ConocoPhillips’ wholly owned subsidiary, Burlington Resources Inc., received an arbitration award of $380 million from an international arbitration tribunal, constituted under the International Centre for the Settlement of Investment Disputes (ICSID), for Ecuador’s unlawful expropriation of Burlington’s significant investment in breach of the U.S.-Ecuador bilateral investment treaty.

“The Tribunal’s decision on damages sends a clear message that governments cannot expropriate investments without fair compensation,” said Janet Carrig, senior vice president, Legal and General Counsel. “ConocoPhillips sought to protect its interests to the fullest degree and the Tribunal acknowledged our legal rights and the unlawful nature of Ecuador’s actions.”

The decision is subject to potential annulment proceedings, but the company believes any application seeking to annul the award would be meritless and ConocoPhillips would strongly defend against it. The timing and manner of collection remain to be determined.

The Tribunal also issued a separate decision finding that Ecuador was entitled to $42 million for limited environmental and infrastructure impacts associated with the operations of the Consortium (comprising Burlington and Perenco). The Tribunal noted that “…while Ecuador also prevailed on part of its counterclaims, the amount awarded to Ecuador is an extremely small percentage of the amount claimed.”

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Ecuador Announces $1 Billion Bond Placement

(Energy Analytics Institute, Ian Silverman, 16.Jan.2017) – Ecuador, the only other Latin American country to belong to the Organization of Petroleum Exporting Countries (OPEC), successfully completed a $1 billion bond placement, announced President Rafael Correa in an official Twitter post.

The bonds, placed on January 10, 2017, have an annual interest rate of 9.1 percent and mature in 2027.

Demand for the offering was $2.2 billion, which “reflects confidence in the country,” wrote Correa.

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PetroEcuador Reports Increase In Shareholder Equity

(Energy Analytics Institute, 27.Jun.2016, Clifford Fingers III) – EP PetroEcuador announced its Shareholder’s Equity rose to $5.659 billion in 2015 compared to $3.914 billion in 2014, reported the state company in an official statement.

The company’s total assets rose to $9.662 billion in 2015 compared to $8.604 billion in 2014.

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Ecuador’s SOTE Pipeline Spans 503 Kms

(Energy Analytics Institute, 27.Jun.2016, Clifford Fingers III) – Ecuador’s SOTE pipeline spans 503 kilometers from the pumping station Lago Agrio No. 1 in the Amazon to the Balao Maritime Terminal in the province of Esmeraldas, announced EP PetroEcuador in an official statement on its website.

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Ecuador’s SOTE Celebrates 44 Years of Operation

(Energy Analytics Institute, 27.Jun.2016, Clifford Fingers III) – The TranEcuadorian Oil Pipeline (SOTE by its Spanish acronym) was inaugurated on June 26, 1972 with a capacity to transport 250,000 barrels per day. During its active life, the pipeline has transported 4,750 million barrels of oil, EP PetroEcuador announced in an official statement on its website.

Later work on the pipeline allowed the company to expand the pipeline’s capacity from 250,000 barrels per day to 300,000 barrels per day in 1987; to 325,000 barrels per day in 1992; and 360,000 barrels per day in 2000, reported the company, citing PetroEcuador General Manager Pedro Merizalde Pavón.

The pipeline starts at Lago Agrio in the eastern region of Ecuador and spans 497 kilometers to the Balao Maritime terminal in the Esmeraldas province. The pipeline is under constant surveillance by PetroEcuador via its SCADA system and an estimated 381 technicians, all of them from Ecuador, work to maintain the pipeline in operation and perform maintenance when necessary.

Recent earthquakes have not affected the pipeline’s terminals or transport infrastructure, according to PetroEcuador.

***

PetroEcuador to Export No. 6 Fuel Oil in July

(Energy Analytics Institute, 27.Jun.2016, Clifford Fingers III) – Trafigura PTE LTD won a bid by EP PetroEcuador whereby the former will export 950,000 barrels of No. 6 Fuel Oil, announced EP PetroEcuador in an official statement on its website.

The winning bid had a $1.49 per barrel discount.

The shipments from Ecuador will be processed in 5 shipments of 190,000 barrels each. The first shipments could leave the country during July 11-13, 2016.

The state oil company had invited 33 companies — qualified to offer No. 6 Fuel Oil — to bid for the exportation of the product, announced the state oil company in an official statement on its website.

The companies — Arkham S.A, B.B Energy (Asia), PTE LTD, Citizens Resources LLC, Glencore LTD, Novum Energy Trading Corp, Trafigura PTE LTD and Vitol INC — presented their offers on June 23, 2016. PetroEcuador announced that 7 offers were received as well as 8 excuses. Due to a tie related to two offers, the said companies had another 24 hours to present their new offers.

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EP PetroEcuador Lays Out Goals for 2016

(Energy Analytics Institute, 27.Jun.2016, Clifford Fingers III) – EP PetroEcuador revealed some of its goals for 2016, reported the state company in an official statement.

The goals for 2016 include, but are not limited to the following:

— Operation of product pipeline Pascuales Cuenca,

— Company restructuring,

— Construction of new building for EP PetroEcuador in the city of Guayaquil,

— Civil-mechanical remediation at the Gas de Bajo Alto Plant,

— Modernization of coastal oil and product pipelines,

— 100 percent operation of the Esmeraldas refinery (Editor’s note: goal achieved in 2015),

— Implementation of KBC best practices,

— Overhaul of the La Libertad refinery,

— Environmental overhaul of 76,000 cubic meters of soil,

— Laboratory certifications ISO 17025,

— Social compensation programs,

— Environmental auditing processes,

— Improvement in the quality of fuels,

— Optimization of the new Monteverde terminal (sanitary and chemicals),

— Remodeling and certification of all service stations,

— Port facilities – entrance of 40,000 metric-ton ship in Tres Bocas,

— Supply of ECOPAIS gasoline in more regions of the country (Machala, Los Ríos and Azuay), and

— Construction of the portable water projects.

***

PetroEcuador Helps Control Fuel Oil Spill

(Energy Analytics Institute, 24.Jun.2016, Clifford Fingers III) – EP PetroEcuador turned over formal activities related to the containment, cleaning and monitoring along the Daule river, kilometer 24 in the Merced sector of Guayaquil to the company Balsasud Balsera Sudamericana, reported the state oil company in an official statement on its website.

On June 21, 2016 PetroEcuador announced that it had lent a helping hand to water company Interagua and Citizens Security Committee to control a fuel spill in the Daule River.

The spill of Fuel Oil No. 4 occurred when the fuel was being transported by a private tanker owned by Balsasud Balsera Sudamericana.

PetroEcuador assisted by sending technical personnel from its Security, Health and Environment department along with others from other departments to assist with the cleanup process.

***

Ecuador Permits Alcoholic Beverages at Service Stations

(Energy Analytics Institute, 21.Jun.2016, Clifford Fingers III) – Ecuador has decided it will allow its service stations to again distribute alcoholic beverages.

The distribution of alcoholic beverages at the stations will have some restrictions, reported the daily El Universo, citing Ecuador’s Interior Vice-Minister Diego Fuentes. The beverages cannot be consumed internally and products should have a ‘moderate alcoholic content. ‘

The government will also allow alcoholic beverages to be sold on Sundays. The sale of such beverages was restricted in 2010 as the Ecuadorian government sought to reduce the indices of violence and other insecurities while also trying to promote family union. The government also restricted the sale of alcoholic beverages between Monday and Saturday at so-called fun parks.

The move to sell alcoholic beverages on Sundays will allow Ecuador to “reactivate tourism and commerce in the country,” said Fuentes.

***

Ecuador Oil Output 556 Mb/d in May 2016

(Energy Analytics Institute, 21.Jun.2016, Clifford Fingers III) – Ecuador’s oil output reached 556,000 barrels per day in May of 2016, up sequentially from 555,000 barrels per day in April of 2016, reported the Organization of Petroleum Exporting Countries (OPEC) in its June 2016 Monthly Oil Market Report (MOMR), citing data from direct communications with the Andean nation.

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PetroEcuador Provides Infrastructure Update

(Energy Analytics Institute, 1.Jun.2016, Clifford Fingers III) – At year-end 2015, EP PetroEcuador had the following infrastructure in Ecuador: 10 product pipelines, 8 fuel terminals and 5 maritime terminals, reported the state company in an official statement.

Table: Ecuador Products Pipelines

Shushufindi – Quito

Esmeraldas – Quito – Pascuales

Quito – Ambato

Libertad – Manta – Pascuales

Tres Bocas – Salitral

Tres Bocas – Fuel Oil

Tres Bocas – Pascuales

Ambato – Riobamba

Pascuales – Cuenca

Esmeraldas – Sto. Domingo – Quito

Source: EP PetroEcuador

Table: Ecuador Fuel Terminals

El Beaterio (Quito)

Sto. Domingo de Los Colorados

Ambato

Riobamba

Cuenca

Pascuales (Guayas)

Chorrillo (Guayas)

Barbasquillo (Manta)

Source: EP PetroEcuador

Table: Ecuador Martime Terminals

Tres Bocas

La Libertad

Monteverde

Maritimo Balo

Baltra

Source: EP PetroEcuador

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PetroEcuador Gasoline Network of 276 Service Stations

EEnergy Analytics Institute, 1.Jun.2016, Clifford Fingers III) – EP PetroEcuador has a gasoline network comprising 276 service stations, reported the state company in an official statement.

PetroEcuador affiliates operated 215 of the service stations while PetroEcuador operated 7 alone. The state oil company also has 12 artisan fishery stations as well as 42 service stations located along the Ecuadorian borders.

Table: PetroEcuador Gasoline Stations in Ecuador

Service Stations ————— Units

EP PetroEcuador affiliate —- 215

EP PetroEcuador ————– 7

Border service stations ——- 42

Artisan fisheries ————— 12

Total Network —————– 276

 

LPG deposits ——————- 5

Source: EP PetroEcuador

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PetroEcuador Says Tax Increase Not to Affect Fuels

(Energy Analytics Institute, 1.Jun.2016, Clifford Fingers III) – The price of Extra Gasoline, Extra Gasoline with Ethanol, Diesel 1, Diesel 2, Premium Diesel and LPG will not be affected by a temporary 2 percent increase in the sales tax to 14 percent from 12 percent, reported EP PetroEcuador in an official statement on its website.

The increase in the sales tax will not affect the following, as stated: the prices of Extra Gasoline, Extra Gasoline with Ethanol, and gasoline for artisan fishing; Diesel 1, Diesel 2 and Premium Diesel for the automobile, artisan fishing and national fishing and shrimping sectors; the price of LPG for domestic use and use by an taxis legally organized by Fedotaxis as well as for drying agriculture products such as corn, rice and soya.

The government of Ecuador decided to temporarily increase the sales tax in the country to be destined to activities related to the reconstruction and reactivation of areas affected by the earthquake reported on 16 April 2016.

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Ecuador Seeks Foreign Investors for Pacific Refinery

(Energy Analytics Institute, 1.Jun.2016, Clifford Fingers III) – Ecuador’s President Rafael Correa named Horacio Yépez Maldonado as the country’s new ambassador to seek financing for the Pacific Refinery with the assistance of foreign investors.

Correa signed Decree 1063 on May 31, 2016 which stipulated that Maldonado seek financing for the project from potential investors in China, South Korea, India, European countries and others suggested by the country’s Foreign Relations Minister, reported the daily El Universo.

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PetroEcuador Reports 79% Decline In EBITDA

(Energy Analytics Institute, 25.May.2016, Clifford Fingers III) – EP PetroEcuador reported operational revenues of $9.284 billion in 2015, down $6.458 billion or 41 percent compared to $15.742 billion in 2014 due to variations in international oil prices, reported the state company in an official statement.

Operational expenses were $8.209 billion in 2015, down $2.441 billion or 23 percent compared to $10.650 billion in 2014 due to the price of hydrocarbon imports. As a result, EBITDA in 2015 fell $4.017 billion or 79 percent to $1.075 billion compared to $5.092 billion, respectively.

After taking into account Depreciation, Depletion & Amortization (DD&A) and other operational expenses, PetroEcuador reported EBIT of $0.971 billion in 2015 compared to $4.999 billion in 2014. After taking into account non-operational results of ($0.219) billion in 2015 and ($0.192) billion in 2014, the company reported net results of $0.752 billion in 2015, down $4.055 billion or 84 percent compared to $4.807 billion in 2014.

***

San Mateo Petrol Station Starts Operations

(Energy Analytics Institute, 25.May.2016, Clifford Fingers III) – The artisan fishing and ship vessel diesel station in San Mateo, located in the province of Manabí, started operations on May 19, 2016 and will benefit an estimated 1,106 artisanal fishers in the area, reported EP PetroEcuador in an official statement on its website.

The station has capacity to store 12,000 gallons of artisan fishing fuels and 12,000 gallons of ship vessel diesel.

***

Ecuador Starts Exploitation Activities at Tiputini

(Energy Analytics Institute, 9.May.2016, Clifford Fingers III) – Ecuador starting exploitation activities at the Tiputin field, part of the Yasuní ITT block in July 2016, reported the news agency AFP, citing a statement from the country’s Hydrocarbon Ministry.

The Tiputini 04 well in Block 43 has estimated potential to produce up to 5,000 barrels per day, said Hydrocarbon Minister José Icaza Romero during a visit to the block.

A total of 40 wells are planned to recuperate an estimated 166 million barrels of reserves with an estimated investment of $2.6 million per well.

“Initial production is expected in July 2016,” said Romero. “It is estimated that by December 2016 average production will reach 20,000 barrels per day.”

The Tiputini field — which is located outside of the Yasuní — forms part of the ITT Block with estimated 920 million barrels of crude, and represents 20 percent of Ecuador’s total oil reserves.

***

Ecuador Output Averaged 542 Mb/d in 1Q:16

(Energy Analytics Institute, 9.May.2016, Clifford Fingers III) – Ecuador, the smallest country within the Organization of Petroleum Exporting Countries or OPEC, exported an average 542,000 barrels per day in the first quarter of 2016, down slightly from 543,000 barrels per day produced in the first quarter of 2015, reported the news agency AFP.

Ecuador, which is confronting economic difficulties due to collapse in oil prices, exported an estimated 416,000 barrels per day in 2015 at an average price of $41.88 per barrel, which translated into total revenues or $6.355 billion, according to the agency.

***

PetroEcuador Exports Reached 131.4 MMbbls in 2015

(Energy Analytics Institute, 5.Apr.2016, Clifford Fingers III) – EP PetroEcuador reported crude exports of 131.4 million barrels (MMbbls) in 2015, which generated revenues of $5,477 million, reported the state company in an official statement.

Derivative sales in the Ecuadorian domestic market were 92.7 MMbbls, which generated revenues of $3,440 million.

Ecuador was a net importer of derivatives in 2015, importing 56.3 MMbbls and exporting just 5.6 MMbbls.

Table: Ecuador Data 2015

————————– MMBBLS —- $MLNS

Crude exports ————– 131.4 ——– $5,477

Derivative sales (internal) —- 92.7 ——— $3,440

Derivative exports ———- 5.6 ———- $256

Derivative imports ———- 56.3 ——— $3,698

Source: EP PetroEcuador

Petroecuador Says Time to Buy Light Crude

(Reuters, 6.Oct.2015, Alexandra Valencia) – Ecuador’s state-run oil company Petroecuador said it is ready to advance discussions with 24 companies interested in supplying light crude to the Andean country.

The smallest OPEC member has said it wants to import crude for the first time in decades as light reserves are running out. The country primarily produces heavy crudes.

Ecuador is looking for foreign suppliers of around 30 million barrels of light crude to feed its renovated 110,000 barrel-per-day Esmeraldas refinery.

“If we reach an understanding convenient for Petroecuador, we are going to do it,” Petroecuador’s General Manager Carlos Pareja told reporters.

He confirmed meetings next week with companies that could submit offers of light crude, among which he highlighted Chile’s ENAP.

A document seen by Reuters separately said that Petroecuador is interested in acquiring crude of 28 API degrees of density and up to 0.7 percent sulfur.

The purchases would cover 12 months of deliveries, representing a volume of some 82,000 barrels per day (bpd) and becoming Latin America’s second-largest tender to buy crude, after Venezuela’s proposal to import 75,000-150,000 bpd.

Petroecuador’s intent is controversial in a country that has always been an exporter and is already suffering from low oil prices, reducing its dollar revenue.

However, Pareja defended his proposal noting that other countries such as Colombia are also looking for foreign suppliers of light crude.

***

PetroEcuador Esmeraldas Refinery Restarts FCC Unit

(PetroEcuador, 18.Sep.2015) – PetroEcuador says activities initiated on September 11, 2015 to restart the fluid catalytic cracker unit at the Esmeraldas refinery, according to a statement posted to the state oil company’s website.

The definitive restart of FCC unit is estimated for late-November 2015. The unit has undergone 14-months of work. The new FCC unit will allow for a 20,000 barrel per day (b/d) increase in capacity.

PetroEcuador also plans to restart the #2 oil plant in November.

Both the FCC unit and the #2 oil plant are expected to be 100% operative by YE:15, according to PetroEcuador.

***

$1.2 Bln Esmeraldas Rehab Work Near Complete

(PetroEcuador, 18.Sep.2015) – PetroEcuador says that overhaul work is being performed on processing units at the 110,000 barrel per day (b/d) capacity Esmeraldas refinery that have deteriorated due to inadequate maintenance work, according to a statement posted to the state oil company’s website.

Work is being performed on the catalytic No. 1 and No. 2 units with capacity to process 50,000 b/d each. The FCC unit has also undergone intervention while new units constructed during the work overhaul include: demineralizer and effluents plants; 2 raw water pits; and a quality control laboratory.

***

Energy Should Be Key Integration Driver

(PDVSA, 10.Sept.2015) – The World Energy Council (WEC) and the Union of South American Nations (UNASUR), with the support of the Ministry of Electricity and Renewable Energy (MEER) of Ecuador, hosted the South American Energy Council (CES) at the headquarters of UNASUR in the city of Quito

The Fifth Meeting of the South American Energy Council of UNASUR (CES) began in Ecuador. It was chaired by Venezuela’s Oil Minister and PDVSA President Eulogio Del Pino, together with the ministers of energy, oil and related sectors from Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, and Uruguay.

They sought to strengthen regional integration through the exchange of knowledge and experiences while meeting the challenges beyond the borders of each country.

“It is an open space to debate the needs and hopes of the Latin American energy market. Energy should be the key driver for integration,” said Del Pino during the opening of CES.

The Venezuelan minister also said that they should introduce “concrete proposals to carry integration forward, to go from rhetoric to specific projects.” The Council is working on a South American Energy Treaty.

Del Pino said that “the region plays a key role. We should not be afraid of a South American energy market. We should find where the deficit is, the surplus, and find how we can complement each other. We need to go back to the South American Energy Treaty.”

The structure of that treaty was approved at the Second Meeting of the Council held in Quito on 25.Mar.2010.

During the opening of the event, they highlighted the value of South America’s natural resources, particularly, the large oil and gas reservoirs, as well as the great hydropower potential, mineral riches and bioenergy.

“This is a historical time of transition from conventional energy to clean energy. We have made proposals to OPEC to balance the energy market and the oil supply,” said Del Pino. “We need to commit ourselves to bring stability not only to consumer countries but to developing countries.”

The meeting reflects the regional integration policy promoted by Commander Chavez. He aided the creation of CES on 17.Dec.2007 with the “Building the Energy Integration of the South” declaration, on Margarita Island, Venezuela.

***

H5 Settles with Chevron Over Ecuador Lawsuit

(Chevron Corporation, 3.Sep.2015) – Chevron Corporation reached a settlement agreement with H5, a California-based e-discovery and litigation services firm.

In the settlement, H5 has withdrawn its support from the litigation against Chevron in Ecuador and has assigned its 1.25% interest in the $9.5 bln Ecuadorian judgment to Chevron. In 2014, Chevron obtained court-ordered discovery from H5 for the company’s role in supporting and advancing the lawsuit led by Steven Donziger, which a federal judge found to be tainted by fraud.

“Chevron is pleased that H5 has ended its association with this scheme,” said R. Hewitt Pate, Chevron’s vice president and general counsel.

“Chevron is also pleased that H5 has taken the further action of disclaiming any interest in the Ecuadorian judgment and relinquishing its interest to Chevron. It remains Chevron’s intent to hold accountable those responsible for what a federal judge found to be a fraud.”

H5 became involved in the case in 2009, supporting a variety of activities. It helped enlist funding from Burford Capital Limited, a U.K.-based litigation funder, and James Russell DeLeon, a Gibraltar-based businessman. It also played an integral role in bringing the Patton Boggs law firm into the case to provide legal support. Burford, DeLeon and Patton Boggs have all since withdrawn their support from the fraudulent lawsuit and settled with Chevron. H5 also assisted Donziger’s team in responding to Chevron’s discovery related to the Cabrera Report, an Ecuadorian court-ordered damages report that a U.S. federal court later found was secretly authored by Donziger and Stratus Consulting, a Colorado-based environmental consulting firm. Stratus has also subsequently settled with Chevron.

On 4.Mar.2014, Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York ruled that the $9.5 bln judgment against Chevron in Ecuador was the product of fraud and racketeering activity, finding it unenforceable in the United States and holding Steven Donziger liable for RICO violations.

In a public statement released today H5 stated: “Today’s agreement with Chevron resolves all outstanding issues relating to H5 in the Lago Agrio matter. Beginning in 2009, H5 proceeded in good faith to provide a variety of electronic discovery and advisory services in relation to the Lago Agrio case in Ecuador. In this as in other matters, H5 was called on because of our expertise in complex litigation and investigations globally. Last year, Chevron obtained a ruling in its favor from U.S. District Judge Lewis A. Kaplan in New York. Although H5 was not a party to that lawsuit, H5 has reviewed Judge Kaplan’s extensive findings. In view of those findings, among other reasons, H5 has decided it does not want to profit from the Ecuadorian Judgment and is therefore relinquishing any interest in the judgment.”

In settling this matter, H5 is the latest party to disassociate from Donziger and the Lago Agrio Plaintiffs.

In addition to the withdrawal of Woodsford, Burford and DeLeon, who all repudiated the unethical tactics of Donziger and abandoned their financial interest in the fraudulent lawsuit, more than a dozen former insiders and allies testified against Donziger, including his former co-counsel, environmental consultants, funders, employees and Ecuadorian collaborators.

Chevron still has claims pending in Gibraltar against Amazonia Recovery Ltd., a Gibraltar-based company set up to receive and distribute funds resulting from the Ecuadorian judgment, and Pablo Fajardo, Luis Yanza and Ermel Chavez, who are directors of the company. Chevron has alleged that Amazonia is merely a vehicle to perpetuate the ongoing fraud.

***

Chevron Reaches Settlement in Ecuador

(Chevron, 6.Feb.2015) – Chevron Corporation reached a settlement agreement with James Russell DeLeon, the principal funder of the fraudulent lawsuit against Chevron in Ecuador. Chevron brought claims against DeLeon in Gibraltar, where DeLeon maintains a residence, for his role in funding and advancing the fraudulent lawsuit. In the settlement, DeLeon has resolved those claims by withdrawing financial support from the Ecuador litigation and assigning his interests in the litigation to Chevron. Chevron, in turn, has agreed to release all claims against DeLeon.

In filings with the Gibraltar court, DeLeon previously disclosed having invested approximately $23 million in the case in exchange for an approximate 7 percent stake in the $9.5 billion Ecuadorian judgment against Chevron. DeLeon’s funding entity, Torvia Limited, and his associate, Julian Jarvis, are also parties to the settlement.

“We are pleased that yet another long-time supporter has ended his association with this scheme,” said R. Hewitt Pate, Chevron’s vice president and general counsel. “Chevron will continue to hold accountable those who associate themselves with this fraudulent litigation.”

On March 4, 2014, Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York ruled that the $9.5 billion judgment against Chevron in Ecuador was the product of fraud and racketeering activity, finding it unenforceable in the United States and holding Steven Donziger, the lead lawyer behind the lawsuit, liable for RICO violations. The judgment also discussed DeLeon’s involvement, which included providing the main source of funding for the propaganda film Crude, contributing approximately 60 percent of the film’s total funding. As part of the settlement, DeLeon has agreed to assign to Chevron all of his financial interests in Crude.

DeLeon stated in a public statement that “commencing in March 2007, I provided funding to support the litigation in Ecuador against Chevron Corporation, in the good faith belief that I was supporting a worthy cause. However, I have since reviewed the March 4, 2014 opinion by Judge Kaplan of the United States District Court for the Southern District of New York setting out the Court’s findings and I have also considered the evidence presented during the trial. As a result, I have concluded that representatives of the Lago Agrio plaintiffs, including Steven Donziger, misled me about important facts. If I had known these facts, I would not have funded the litigation.I no longer seek or wish to receive any financial benefit from this matter and I have therefore decided to relinquish my entire interest in the litigation to Chevron.”

In settling this matter, DeLeon is the latest party, among many others, to disassociate himself from Donziger and the Lago Agrio Plaintiffs. During the seven-week federal racketeering trial against Donziger, more than a dozen former insiders and allies testified against him, including his former cocounsel, environmental consultants, funders, employees and his Ecuadorian collaborators.

Chevron still has cases pending in Gibraltar against U.K.-based Woodsford Litigation Funding Ltd. for its role in funding the lawsuit; Amazonia Recovery Ltd., a Gibraltar-based company set up by Donziger and his associates to receive and distribute funds resulting from the Ecuadorian judgment against Chevron; and Pablo Fajardo, Luis Yanza and Ermel Chavez, who are all directors of Amazonia Recovery Ltd.

***

LatAmNRG: Heard on the Street 3Q:13

(Energy Analytics Institute, 30.Sep.2013) – Information in this section, provided by Energy Analytics Institute editors and reporters, is hearsay and thus should be treated as such.

The names of our many sources have been withheld to protect their identities and family members in Venezuela.

COMBUSTIBLES
  • A number of gasoline stations along VenezuelaColombia border remain closed due to a lack of supply. [El Universal]
CORPORATE SUITE
  • Venezuelan Oil Minister and PDVSA President Rafael Ramirez was named as Venezuela’s Economic Vice President by President Nicolas Maduro. [EAI]
CROSS BORDER DEALS
  • T&T and Venezuela signed a cross border natural gas deal. Deal signed by Venezuelan Oil Minister Rafael Ramirez and Trinidad Energy Minister Kevin Ramnarine. [EAI]
  • Trinidad Energy Minister Kevin Ramnarine was been under pressure in Trinidad for recent agreements reached with Venezuela regarding cross-border commercialization deals for the Loran-Manatee gas fields. [EAI]
  • Central American energy connection could reduce prices from Guatemala to Panama. [El Espectador]
DISCOVERIES
  • Colombia’s state oil company Ecopetrol announces new oil discovery at Guainiez-1 well in Guaroa. [EAI]
DIVESTMENTS
  • Chile’s ENAP sells 49% interest in Primax Peru and Primax Ecuador for $312 mln. [El Universo]
ELECTRIC SECTOR
  • YPFB Corp. completed 23,141 domestic gas connections in May.2013. [La Razon]
  • Interconexión Eléctrica S.A (ISA) wins bid for design, financing, construction, operation and maintenance of Encuentro-Lagunas project in Chile. [Portafolio.co]
  • Peru’s Energy and Mining Ministry has identified hydrocarbon and electric sector projects worth $26,530 mln thru YE:20. [El Comercio.pe]
  • Electric consumption in Uruguay reaches 1,808 MW on Jun.20.2013 up from record of 1,745 MW achieved on Jul.4.2011. [El Pais]
EXPLORATION & PRODUCTION
  • Bolivian officials search for hydrocarbon investments and technology at Russian Gas Forum [La Razon]
  • Gas output in Bolivia reached 57.08 MMcm/d in the 1Q:13, up 24.2% compared with 45.94 MMcm/d in the 1Q:12. [La Razon]
  • Bolivia’s average production was 56.2 MMcm/d in the first five months of 2013. [El Espectador]
  • YPFB plans investments of $8,406 mln during 2013-2016. [La Razon]
  • YPFB Petroandina SAM President Jaime Arancibia announced the Lliquimuni block could contain 1 Tcf. [La Razon]
  • France’s Total announced plans to develop the 3 Tcf Incahuasi field in Bolivia, after drilling the ICS-2 exploration well. [La Razon]
  • Russia’s Rosneft is interested in investing in exploration and development activities in Bolivia. [La Razon]
  • Repsol’s oil production in Bolivia rose to 3,400 b/d from 2,600 b/d. [La Razon]
  • Ecuador’s Hydrocarbon Secretariat expects oil production to average 518,503 b/d in 2013, up from 503,610 b/d in 2012. [EAI]
  • Ecuador’s Hydrocarbon Secretariat expects the country’s petroleum sector will realize investments of $3.6 bln in 2013, up from $2 bln in 2012. [EAI]
  • Extraction of oil in the Yasuni National Park will utilize new technologies, Wilson Pastor said on state television. [EAI]
  • Ecuador gov’t cancels $34.5 mln committed by Germany for the protection of the Yasuni National Park. [EAI]
  • Mexico’s state oil company Pemex creates company to search for oil deep offshore and shale gas in the USA.
  • Venezuela’s Oil Minister Rafael Ramirez said during an interview on Venezuelan state television or VTV that the decision to stop sending oil to the US had to be taken by Venezuelan President Nicolas Maduro. [EAI]
ENERGY REFORMS
  • Mexico’s left is betting on more autonomy for Pemex without changing the constitution.
EXPORT-IMPORT
  • Venezuela is looking for additional partner(s) for the Mariscal Sucre gas project offshore, Venezuelan Oil Minister Rafael Ramirez says. [EAI]
  • Spanish gov’t requests legal security and respect for the rules of the game in Argentina. [La Nacion]
  • Venezuelan imports of electricity from Colombia continue to increase. [El Universal]
  • Gas imported by Argentina and Brazil up 56.95% and 20.26%, respectively, in the 1Q:13 compared with the 1Q:12 [La Razon]
  • Argentina imported 14.63 MMcm/d from Bolivia in the 1Q:13 compared with 9.32 MMcm/d in the 1Q:12 [La Razon]
  • Brazil imported 32.01 MMcm/d from Bolivia in the 1Q:13 compared with 26.62 MMcm/d in the 1Q:12 [La Razon]
  • Bolivia exported an average 14.1 MMcm/d of gas to Argentina in the first five months of 2013. [El Espectador]
  • Bolivia exported an average 31.3 MMcm/d of gas to Brazil in the first five months of 2013. [El Espectador]
  • Enarsa owes YPFB $180 mln for gas deliveries made in Mar.2013 [La Razon]
  • PDVSA currently exports 330,000 b/d to India but plans to increase this figure to 400,000 b/d, PDVSA President Rafael Ramirez said. The official said PDVSA is also exporting 630,000 b/d to China. [EAI]
  • PDVSA owed $270 mln by Paraguay’s Petropar according to Paraguayan News Portal. [EAI]
FINANCE / EQUITY AND DEBT OFFERINGS

Colombia:

  • Ecopetrol $900 mln bond issue was oversubscribed by 3.1 times. [El Espectador]
  • Ecopetrol road show was led by Bank of America and visited fixed income investors in Singapore, London, Hong Kong, Chile and Peru. [El Espectador]
  • Ecopetrol road show led by Bank of America visited the following US cities: New York, Chicago, Los Angeles and Boston. [El Espectador]

Venezuela:

  • Venezuela’s Central Bank (BCV) holds auction for $330mm with PDVSA bonds.

Venezuelan Debt to China:

  • China has loaned Venezuela nearly $40 bln to date, excluding new agreements signed recently between the countries, of which $20 bln has been paid back. [EAI]
  • Venezuela currently owes $20 bln to China, which represents almost 2.4 months of PDVSA’s revenues assuming oil prices above $100/bbl. [EAI]
  • Assuming China were to lend Venezuela another $44 bln, the country would owe the Chinese nearly $64 bln, which is about 6 months of PDVSA revenue with oil prices above $100/bbl. [EAI]
  • Venezuelan debt of $64 bln to China would represent almost 7.7 months of PDVSA’s revenues assuming oil prices above $100/bbl. [EAI]

Peru:

  • Investments in energy projects in Peru to fall 50% by YE:20. [El Comercio.pe]

Ecuador:

  • China’s Industrial and Commercial Bank (ICBC) could finance 70% of Pacific Coast refinery project. [El Comercio]
GENERAL
  • Colombia’s National Hydrocarbon Agency (ANH) said the country’s oil reserves were 2,377 MMbbls at YE:12. [Portafolio.co]
  • S&P and Fitch raise rating on Emgesa ISA to BBB from BBB-. [Portafolio.co]
  • Chinese executives with LinYi Cake Trade Co. visited Bolivia to inspect the construction process and advances at a pilot lithium battery plant in La Palca in Potosi. [La Razon]
HEAVY OIL
  • Peru to prioritize $1,500 mln in investments for the integration of heavy oil lots in the northern amazon region [El Comercio.pe]
  • PDVSA has 15,000 workers in the Orinoco Heavy Oil Belt of Faja but plans to increase this figure to 40,000, PDVSA President Rafael Ramirez says. [EAI]
  • PDVSA, Cupet (Cuba) and Sonangol (Angola) agree to create JV to produce 20,000 b/d in the Faja. [El Nacional]
  • PDVSA reports in 10.Oct.2013 press release that it has a 71% interest in PetroCarabobo 1 Faja project, meaning the company assumed Petronas’ 11% interest. Partners in the PetroCarabobo 1 project now include PDVSA (WI 71%), OVL (WI 11%), OIL (WI 3.5%), OIC (WI 3.5%) and Repsol (WI 11%). [EAI]
  • Rising drilling costs in the Faja are just one of many issues companies are confronting today. [EAI]
  • Russia’s Lukoil announced plans to exit the Junin Block 6 project in the Faja.

EDITOR’S NOTE: Smaller Russian companies are starting to exit the Faja, ceding more control to Rosneft or other Russian entities; a signal that something could definitely be wrong in Venezuela and the Faja. [EAI]

  • PDVSA announced during the HOLA 2013 conference that it was looking to utilize its heavy oil techniques in Mexico. [EAI]
LAWSUITS
  • Repsol turns down $5,000 mln offer from Argentine gov’t regarding 51% interest expropriated in 2012. [La Nacion]
  • Ecuador’s President Rafael Correa says on Ecuadorian state television that US-based Chevron Corp. is an enemy of Ecuador. [EAI]
LNG
  • By 2015 Uruguay’s ANCAP expects to be exporting 5 MMcm/d of gas from the Puntos de Sayago regasification plant in Uruguay to Argentina’s YPF. [LaRed21]
PETROCHEMICALS
  • Peru to prioritize $3,500 mln in investments for the petrochemical industry. [El Comercio.pe]
PIPELINES
  • Peru to prioritize $3,500 mln in investments for the southern gas pipeline. [El Comercio.pe]
PROTESTS / STRIKES
  • About 50 workers with Petrocedeno JV in Venezuela demand that PDVSA respect their benefits [El Universal]
REFINERIES
  • Peru to prioritize $3,514 mln in investments for the modernization of the Talara refinery. [El Comercio.pe]

Venezuela:

PDVSA’s participation in Abreu e Lima Refinery in Brazil:

  • PDVSA President Rafael Ramirez says co. and Petrobras officials continue to discuss JV prospects regarding the Abreu e Lima refinery. [EAI]
  • From an operational and strategic business plan point of view, PDVSA’s participation in the Abreu e Lima refinery does not make sense. [EAI]
  • Abreu e Lima refinery in Pernambuco could easily source sufficient oil from the Brazil’s offshore pre-salt region w/o having to look to Venezuela for heavy oil. [EAI]
  • Any decision PDVSA President Rafael Ramirez takes regarding the company’s participation in Abreu e Lima refinery w/Petrobras will be politically based. [EAI]

Comments regarding Amuay Refinery explosion on 25.Aug.2012:

  • PDVSA President Rafael Ramirez says explosion at Amuay refinery was sabotage. Amuay refinery explosion was caused by gas leak at Block B23. As a result of the explosion, 42 persons were killed, 5 are still missing, 150+ were seriously injured. published by the Energy Orientation Center (COENER). [EAI]
  • Amuay refinery explosion to cost PDVSA an estimated $1.8 bln, according to COENER. The refinery is processing 645,000 b/d nearly 10 months after major explosion. [Ultimas Noticias]
  • PDVSA to spend an estimated $585 mln on maintenance activities at the Amuay and Cardon refineries, PDVSA President Rafael Ramirez says. [EAI]
SOCIAL
  • CITGO Corp. donates 625,000 energy saving light bulbs to families in 21 cities in the USA [PDVSA

***

Q&A with Tissot Associate’s Roger Tissot

(Energy Analytics Institute, Pietro D. Pitts, 19.Jul.2013) – Tissot Associates Consultant Roger Tissot spoke with Energy Analytics Institute in a brief interview from Canada.

What follows are excerpts from the brief interview.

Regarding the decision of Ecuador’s government to develop the ITT fields:

EAI: Ecuador has decided to move forward with development of the ITT fields: how do you view the decision?

Tissot: I am not surprised by President Rafael Correa’s decision of to drill the ITT Fields in the Yasuni National Park and for three reasons:

  1. Credibility: Ecuador’s international reputation is not that good do to contradictions made by Correa in regard to not honoring oil contracts.
  2. Timing: The recession in Europe came at a bad time for the ITT initiative as many of these countries no longer have the ability to make investments. The US’ green policies favored Ecuador but the biggest problem here has to do with the relationship Ecuador has with the U.S. which is not great.
  3. Need: The need for dollar revenues/income was not been met as Correa originally planned, thus necessitating a change of policy by the government.

As such, in terms of problems with Ecuador’s plan to increase revenues and Exploit ITT fields, we need to consider the following: 1. How will the fields be developed? 2. Social challenges and/or protests to come from indigenous communities? 3. Will the government try to attract investors via bidding rounds or will it engage in direction negotiations with potential partners?

I think bidding rounds would be the best way to develop the ITT fields but what would the production plans entail?

EAI: Would Chinese companies make a good fit in Ecuador in terms of partnering with the government?

Tissot: Chinese companies would be logical partners for development of the ITT fields as well as other projects.

Regarding Petrocaribe and rumors that Venezuela is looking to increase interest rates under the initiative:

EAI: Should the member countries be surprised if Venezuela decides to increase interest rates?

Tissot: None of the Petrocaribe countries should be surprised by the Venezuelan government’s decision or potential decision to tighten the terms related to the initiative due to the excess spending by the Venezuelan government under late President Hugo Chavez that was obvious to everyone.

Frankly, many of the Petrocaribe countries are addicted to cheap Venezuelan oil which their governments could sell on the spot market to assist them raise revenues that could be used to assist them to cover other expenses.

In my view, Venezuela is facing a very bad fiscal situation and a not so good economic situation. President Nicolas Maduro does not have the ability or support to implement policies needed to address fiscal imbalances in Venezuela.

EAI: Is Petrocarible a good initiative and will it endure?

Tissot: Petrocaribe was a good social-economic tool for Chavez. I believe it will endure under Maduro as he tries to maintain “the legacy of Chavez” in the region.

Simply put, there are not many options for the Petrocaribe countries and they will most likely have to revert to their old ways of obtaining oil and derivatives, before the birth of Petrocaribe.

On the other hand, I do not see many companies willing to send oil and derivatives to the Caribbean or pick up the void that could be potentially left my PDVSA.

In my opinion, Petrocaribe is like giving foreign aid to a poor country to help them reduce debt and poverty levels. In other words, Petrocaribe was like a type of foreign aid with an ideological slant.

Editor’s Note:

The Petrocaribe initiative, the brain child of late Venezuelan President Hugo Chavez, was inspired by independence and sovereignty of peoples in an attempt to alleviate the hegemonic influence of the U.S. in Latin America and the Caribbean.

Measures by Venezuela to potentially increase interest rates under Petrocaribe, coupled with the recent 32% devaluation of the Bolivar, the Venezuelan currency, hints that the government is facing mounting economic and financial problems.

***

Ecuador Open Market Meetings in Houston

(Energy Analytics Institute, Ian Silverman, 25.Jun.2013) – PetroEcuador holds open market committee meetings in Houston, Texas.

Highlights from the discussion follow:

Comments from PetroEcuador International Commerce Executive Nilsen Arias:

  • “Oil’s contribution to the energy matrix was 85% in 2010, but will fall to 65-70% in 2013.”
  • “Demand for gasoline, diesel and naphtha to exceed production.”
  • Feb.2014 will mark the turnover of Las Esmeraldas refinery which will allow it to produce clean fuels.
  • Ecuador does not have refining capacity to produce LPG, diesel, naphtha, which are imported.
  • LPG imports used for domestic cooking in Ecuador.
  • Cutterstock used for produce fuel oil in Ecuador.
  • Ecuador imports high octane naphtha and ultra-low diesel.

***