Puerto Rico to Restructure $3 Bln Power Debt

(AP, 3.Aug.2018) – Puerto Rico’s government reached a deal Monday night with a bondholder group to restructure more than a third of the debt owed by its troubled power company as the utility moves towards privatisation.

A federal control board overseeing the US territory’s finances called it an “important milestone” and promised the deal would not hit Puerto Ricans with rate increases to cover debt service if there was a drop in power usage.

Officials said bondholders that hold more than US$3 billion in debt from Puerto Rico’s Electric Power Authority would exchange it for two new bonds. One would be exchanged at 67.5 cents on the dollar, while the other would be exchanged at 10 cents on the dollar and would be linked to Puerto Rico’s economic recovery.

“That is absolutely huge,” economist Vicente Feliciano told The Associated Press.

The deal marks the first time Puerto Rico will not pay a revenue bond in full, and it could have consequences beyond the U.S. territory, including higher interest rates on those types of bonds, he said.

The bondholder group whose clients include Oppenheimer Funds and Knighthead Capital Management said in a statement that addressing the power company’s debt can speed up the utility’s transformation and viability.

“Our recoveries are now tied to PREPA’s sustainable success,” the group said.

Puerto Rico legislators are expected to soon approve several measures that will allow the Puerto Rico’s government to privatise the generation of power and award concessions for transmission and distribution.

Economist Gustavo Velez told AP that the debt restructuring deal will make it easier to find a buyer, in addition to possibly leading to similar agreements for those holding general obligation bonds and sales-tax bonds. Overall, Puerto Rico has more than US$70 billion in public debt, and a federal judge overseeing the territory’s bankruptcy-like process has to approve all restructuring deals, which Velez said are key for the island to overcome its economic crisis.

“Puerto Rico needs to accelerate all these restructurings to return to the capital markets as quickly as possible,” he said.

The announcement comes just days after a new CEO was appointed to lead Puerto Rico’s power company, the fifth one since Hurricane Maria destroyed up to 75 per cent of the island’s transmission lines. Some 200 customers remain in the dark more than 10 months after the hit as Puerto Rico struggles to emerge from an 11-year recession.

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Petroleum Geology of Mexico and the Northern Caribbean

(The Geological Society, 25.Jul.2018) – The Gulf of Mexico is a world class prolific hydrocarbon system. As a result of recent energy reform the Mexican sector of this basin has been open to international companies for the first time through a series of competitive licence rounds. The first phase of drilling on these newly awarded permits has resulted in the discovery of giant hydrocarbon accumulations in the Mexican offshore sector. Geologically, the offshore and onshore basins of Mexico offer a diverse range of play types with multiple source / reservoir pairs and are characterised by complex tectonic evolution with associated halokinesis and shale tectonics.

More widely within the Northern Caribbean region, exploration activities are ongoing in several countries targeting both proven and frontier petroleum systems. Some of these play elements are potential extensions of the proven systems in Mexico. While geologically complex, these areas have the potential to emerge as major hydrocarbon basins.

This regional conference aims to bring together both academic and industry geoscientists to discuss the current state of understanding of the geology and petroleum systems in these geologically complex, but prolific hydrocarbon basins.

The committee now invite submissions of abstracts along the following themes

  • Regional Plate Tectonic Evolution
  • Basins of Mexico and the Northern Caribbean
  • Onshore Basins and the Laramide and Chiapas

Fold Belt effects

  • Petroleum Systems
  • Exploration & Production History
  • Neogene Clastic Depositional Systems
  • Carbonate Depositional Systems
  • Salt Tectonics
  • Controls on hydrocarbon habitat – seal capacity
  • Relevant GOM Analogues
Call for Abstracts:

Please submit talk or poster abstract to sarah.woodcock@geolsoc.org.uk by 30 November 2018.

For further information please contact:

Sarah Woodcock, The Geological Society, Burlington House, Piccadilly, London W1J 0BG.

Tel: +44 (0) 20 7434 9944

Event: Petroleum Geology of Mexico and the Northern Caribbean

Date: 14-16 May 2019

Venue: The Geological Society, Burlington House, Piccadilly

City: London

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Puerto Rico Power Co Names 3rd CEO

(AP, 19.Jul.2018) – Puerto Rico’s governor named a new CEO on Wednesday to lead the US territory’s power company, which has now seen three top executives in two weeks as it struggles with a lack of leadership, bankruptcy and the restoration of electricity to hundreds who remain in the dark since Hurricane Maria.

Electrical engineer Jose Ortiz, who once served as executive director of the island’s water and sewer company, takes over the Puerto Rico Electric Power Authority on July 23.

He replaces a CEO who lasted only one day in the position, and took over from another CEO who announced his resignation last week after nearly four months on the job.

Ortiz once served as president of the power company’s board, which saw five members resign last week following an outcry over the US$750,000 annual salary that a previous CEO would have earned amid an 11-year recession. Ortiz will be making US$250,000 annually and will receive no bonuses.

Ortiz said his priority is to rebuild Puerto Rico’s credibility to help attract foreign investment and reach a deal with creditors to resolve the agency’s US$9- billion public debt.

“One of the first things we have to do is pull the company out of bankruptcy,” he said.

He also said he will review multimillion-dollar federal contracts awarded to US companies who are helping restore and rebuild the island’s electrical grid after the Category 4 storm destroyed up to 75 per cent of transmission lines.

Ortiz promised that Puerto Ricans will see “substantial change” early next year at the power company and in their bills as the government prepares to privatise the generation of energy and award concessions for transmission and distribution.

“We cannot keep planning much further,” he said. “We all know what needs to be done.”

Governor Ricardo Rossello is among those who have been blamed for the ongoing turmoil at the power company. A day after the previous CEO was appointed last week, he issued a statement saying that the US$750,000 salary was not appropriate, given the island’s economic crisis, and said that any board member who disagreed should step down. Five of them did, including the CEO, who was previously part of the board.

Rossello defended his actions, saying energy “is the linchpin of our society.

“The transformation of the electrical system is critical to Puerto Rico’s development,” he said.

Ortiz takes over as crews try to restore power to about 650 customers who remain without electricity some 10 months after hurricanes Irma and Maria devastated the island in September.

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Puerto Rico Power Grid Still Unstable

(AP, Michael Weissenstein and Danica Coto, 19.Jul.2018) – Ten months after Hurricane Maria destroyed Puerto Rico’s electric grid, the local agency responsible for rebuilding it is in chaos and more than $1 billion in federal funds meant to strengthen the rickety system has gone unspent, according to contractors and U.S. officials who are anxious to make progress before the next hurricane.

The Puerto Rico Electric Power Authority has seen two chief executive officers and four board members resign in less than a week in a messy fight over how much the bankrupt agency should pay its CEO. The agency’s fourth CEO since the hurricane lasted less than 24 hours on the job last week before resigning amid public outrage over his $750,000 salary.

Gov. Ricardo Rossello on Wednesday named the former head of Puerto Rico’s water and sewer agency as the fifth head of the electric company since Maria, at a salary of $250,000 a year. Jose Ortiz starts work Monday.

“In spite of missteps in the past, everybody will see that we have the right person at the right time,” Rossello said.

The turmoil has fueled delays in launching $1.4 billion worth of work that includes replacing creaky wooden power poles vulnerable to collapse in the next storm, the chief federal official in charge of rebuilding Puerto Rico said.

“There is no permanent work that’s been done,” said Mike Byrne, the Federal Emergency Management Agency’s assistant administrator for field operations. “What I’m worried about is the next level, the permanent work, the going in and building the grid the way I’ve been tasked to do by Congress.”

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From shut-down medical equipment to the spread of waterborne diseases, the cascading effects of power grid failure likely led to hundreds of deaths in the aftermath of the Category 4 hurricane, although the exact number remains a subject of debate and ongoing investigation.

“The one reason why so many people died in the aftermath of the hurricane was the lack of energy,” opposition Sen. Eduardo Bhatia said. “And the lack of energy comes from how fragile the system was because of years of neglect.”

Several hundred Puerto Ricans remained without power Thursday in the longest-running blackout in U.S. history. The entire island remains vulnerable because much of the massive damage from the storm was resolved with temporary fixes likely to fail in the next hurricane.

These include thousands of weakened and damaged poles and power lines that were reused in the absence of new supplies. In some cases, lines were bolted to trees.

The Puerto Rico power authority notified three large mainland U.S. companies in March that they had been selected to carry out $1.4 billion worth of contracts that includes finishing emergency restoration work and beginning the long-term task of overhauling the power grid. Nearly four months later, the agency has not issued the final orders required to send the linemen into the field to do the permanent work, according to federal officials and some contractors. The power authority has not explained why, and a spokesman did not return repeated calls for comment.

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Can Solar Energy Speed Puerto Rico’s Recovery?

(PBS NewsHour, 20.Mar.2018) – Here’s what it would take

Six months after Hurricane Maria, and whole towns in Puerto Rico still remain without power. Many think solar energy can help the recovery, but making renewables a mainstay will require more than solar panels. There’s also a monopoly and Congress with which to contend.

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