Venezuela Pushing For Dragon Gas In 18 Months

(Trinidad Express, 15.Nov.2018) — Venezuela’s minister of energy, Manuel Quevedo, said yesterday that his country’s state-owned oil giant PDVSA expects to start sending natural gas to Trinidad from the Dragon field, off this country’s north-west coast, within two years.

Speaking at a news conference following the 20th ministerial meeting of the Gas Exporting Countries Forum (GECF), which was held at the Hyatt yesterday, Quevedo described the Dragon agreements as an important example of cooperation between neighbouring countries.

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#LatAmNRG

JPS Promises Improved Power Supply After $116 Million Grid Investment

(Jamaica Gleaner,11.Nov.2018) — The Jamaica Public Service Company (JPS) is promising a more reliable power supply with an improved and more reliable grid in which it has invested $116 million this year.

In a release, JPS said a major part of the improvement will come from the construction of an energy storage facility at Hunts Bay, St Andrew at a cost of $17.3 million. It said this will help to improve reliability through the creation of a more flexible grid, that can accommodate more renewables.

When complete in 2019, the system will act as a battery back-up when fluctuations in power supply occur, due to the intermittency of renewables and other factors, JPS explained..

The energy company said it has spent some $1.5 million to install distribution automatic switches, including trip savers and fault circuit indicators.

These devices are expected to further modernise the country’s electricity grid as they will detect faults, minimise their impact, and restore power automatically to customers.

“Several customers across the island are already beginning to reap the benefit of these investments, evidenced by fewer outages,” JPS said.

Also, the country’s sole electricity distributor said it has spent about $2.6 million on a voltage standardisation project in St Andrew and St Ann. This is expected to result in better power quality and improved reliability in the power supply to customers in these areas when completed.

The resort town of Ocho Rios, in particular, is expected to have “a more robust grid and improved power supply.”

The light and power utility said it was committed to undertaking further improvements to the grid with the use of advance technologies.

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Venezuela Gov’t Says Sabotage To Blame For Electric Outages In Margarita

(Energy Analytics Institute, Piero Stewart, 10.Nov.2018) — An explosion that occurred along a segment of the Northeast Gas Pipeline José Francisco Bermúdez, and which caused interruptions in electricity service in Nueva Esparta state, was an act of terrorism and sabotage, announced Venezuela’s Electricity Minister Luis Motta Domínguez.

“The interruption of electric services late this week was an act of terrorism carried out against a segment of PDVSA’s natural gas pipeline. Due to the gas leakage, the state oil company was forced to close the valves along the pipeline,” said Domínguez in a telephone call from Margarita Island, broadcast by Venezolana de Televisión (VTV).

Domínguez didn’t present any reliable or believable evidence related to the claim.

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Trinidad Government Announces New Company For Refinery Assets

(Trinidad and Tobago Newsday, Carla Bridglal, 18.Oct.2018) The government has announced a new state company, Guaracara Refining Company, into which the assets of the Pointe-a-Pierre refinery will be placed.

The refinery is scheduled to be shuttered by next month, and after the assets have been transferred to Guaracara, the company will advertise a “very broad” request for proposals (RFP), where any interested party can pitch their plan on how the refinery can be utilised.

“Everything will be open for discussion. At the end of the day, we feel we will get a proposal that is acceptable where we will no longer have this albatross around our neck called the refinery, but the assets can still be used in a productive way for the benefit of TT,” Energy Minster Franklin Khan said yesterday at the post-Cabinet media briefing.

Guaracara is one of five new companies created as part of the restructuring of state oil company Petrotrin, including Heritage Petroleum Company Ltd and Paria Fuel Trading Company, which will handle exploration and production and trading and marketing, respectively. Petrotrin as an entity will remain as a company to deal with legacy matters, and these will all be placed into one, Trinidad Petroleum Holdings Ltd.

Heritage and Paria were incorporated on October 5, but according to the Companies Registry, Guaracara is not yet listed.

Khan said a vesting order was being prepared to transfer Petrotrin’s exploration and production assets to Heritage and the terminal, port and pier assets to Paria. There will also be an assignment of exploration and production licences under the name of Petrotrin at the Ministry of Energy to Heritage.

“The transformation process is well on its way and going smoothly,” Khan said. The government hopes to have the new companies operationalized by the end of this year, he said. “All things being equal, 2019 will be a brand new year for the energy sector in TT,” he said. As it stands, all operations are still continuing under the name of Petrotrin. Khan added that all timelines are on schedule for the import and export of fuel and crude oil. The first shipment of fuel is expected around October 22-24 and the first crude export will be October 30-November 1. Neither Khan nor his Cabinet colleague Communications Minister Stuart Young could verify if Petrotrin had indeed retained a supplier for fuel. Khan said the company was “very close if not there already” when asked by reporters for the status, while Young said, given the information provided “I’m sure they have a supplier by now.”

Regardless, Khan said there would be a “seamless transition for the supply” of liquid fuel, liquid petroleum gas (LPG or cooking gas) and bitumen, and the country has a 20-day buffer supply should there be any lapse in delivery time.

Young also said that the price Petrotrin’s crude oil was fetching on the international market was well above the West Texas Intermediate price, the international benchmark price at which the TT budget is pegged. “We thought it would have been less than WTI. It’s even higher than we thought the crude was worth,” Young said.

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Trinidad Government Defends Decision To Close Petrotrin

(CMC, 3.Oct.2018) — The Trinidad and Tobago government Monday reiterated its position that it was necessary to close down the refinery of the state-owned oil company, Petrotrin, insisting that the company was losing billions of dollars (One TT dollar=US$0.16 cents) annually.

Finance Minister Colm Imbert, delivering the TT$51.7 billion budget to Parliament, said that the Keith Rowley administration had agreed following a “comprehensive assessment and analytical review of its operations” to shut down the refining and marketing business unit of Petrotrin.

“We are repurposing Petrotrin which would now focus on the full exploitation of its exploration and production activities and on a new terminalling business through which imports will now meet the demand of Trinidad and Tobago and the Caricom region for the refined products previously produced by the refinery,” Imbert said.

He said these would include motor gasoline, diesel, aviation fuel, liquefied petroleum gas and other derived and refined products.

He said in 1985 when a former people’s National Movement (PNM) had decided to purchase the failing refinery assets from the international private sector in a bid to save jobs, the situation has changed.

“Since that time, the refinery economics have further deteriorated as the refinery has failed to adapt to the changing fuel environment which demanded cleaner standards for fuel technologies in local and foreign markets.

“The continuing efforts over time by the managerial, technical and governance personnel to improve the efficiency of the refinery to meet the standards for the internationally marketable products fell short of requirements.”

Imbert said that all the major plant upgrades failed – from the gas optimisation plant to the ultra-low sulphur diesel complex and the gas-to-liquids plant – all experiencing substantial cost overruns in the process.

He said the cost of these upgrades has loaded the company with an unsustainable debt burden estimated at TT$12 billion of which TT$5.780 billion is due in August 2019.

“While the company continued to incur persistent losses, the gasoline optimisation programme saw its cost rise from TT$2.45 billion in 2005 to TT$12.6 billion when it was completed in 2013, the cost of the unfinished gas-to-liquids plant rose from TT$1.55 billion to TT$3.15 billion and that the cost of the ultra-low sulphur diesel complex rose from TT$791 million to $2.89 billion “

He said while the project is 98 per cent mechanically completed, it cannot be operated because the structural specifications were not followed, meaning that the foundation is faulty and cannot be used. It would take TT$2.5 billion to rectify the defects, Imbert added.

Petrotrin’s Pointe-a-Pierre refinery operations. Photo: Richard Charan
5000 JOBS

He said in the context of these managerial failures, the size of the employee-base at Petrotrin remained in the vicinity of 5,000, divided between the refining and marketing business unit and the exploration and production business unit.

“In addition, the monthly wage bill amounted to TT$183 million per month or TT$2.2 billion on an annual basis. Coupled with this wage bill, the medical plan was running at an annual cost to Petrotrin of approximately TT$245.0 million per year but with very low contribution rates by the employees ranging from TT$50 to TT $80 per month.”

Imbert said what is interesting about this TT$245 million, medical plan is that it currently covers 21,000 present and past employees and their unmarried family members under the age of 21 or under the age of 23 if still in school.

“It effectively covered a Petrotrin employee and spouse until death. This has to be one of the most generous medical plans in Trinidad and Tobago, if not in the entire Caribbean region,’ Imbert told legislators.

He said the survival of the company was only possible through the non-payment of TT$3.5 billion in taxes and royalties, in breach of the law, and the procuring of government guarantees in the amount of TT$1.5 billion for loans from financial institutions which have significantly increased the public debt.

“This has placed a severe burden on the Treasury and on taxpayers, especially in view of the fact that Petrotrin extracts 40,000 barrels per day of taxpayers’ oil, at a value of six billion dollars per year, for which taxpayers receive no benefit.”

Imbert said that despite the fact that Petrotrin is tottering on the brink, as recently as last month, it approached the Ministry of Finance for financial support by way of another government guarantee in the amount of US$56 million to purchase a cargo of crude oil, since the shipper refused to discharge the cargo without a guaranteed letter of credit.

“And just last week, Petrotrin approached the Ministry of Finance for more financial support to refinance debt instruments totalling a further US$180 million as they become due for payment,” Imbert said, telling legislators that in its current form the company “remains unprofitable and whatever scenario is analysed, it cannot generate a profit without drastic restructuring.

“The financials generated by independent consultants, both local and foreign, provide a grim outlook of a deteriorating financial situation which cannot be improved even if billions of dollars in capital are injected into the company, which capital is simply not available.”

He said the latest financials for the company are illustrative of a looming crisis which if left unresolved would have a serious impact on the national economy.

Imbert said the government will do all that it can to assist displaced workers at Petrotrin to transition to their new circumstances.

“We will provide all available support at our disposal. And we will work with the company to ensure that adequate funds are available to pay termination benefits on time and in full,” he said, adding ‘we are confident that the reinvented Petrotrin will resume its rightful place as a leader in the oil and gas sector of Trinidad and Tobago and will become a profitable and efficient entity that makes a positive contribution to the Treasury.

“May I also point out that the company has advised that it will continue to be a significant earner of foreign exchange, in the vicinity of US$200 million-plus per year, after it completes the transition to its new business model,” Imbert added.

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Barbados Hunting New Suppliers Following Closure of Petrotrin Refinery

(Jamaica Gleaner, 14.Sep.2018) — Barbados says it is holding discussions with a number of suppliers to replace the energy arrangements it had with oil refinery Petrotrin.

The refinery, based in Trinidad & Tobago, is locking down operations, a measure it blamed on increasing financial losses. The closure has led to the retrenchment of more than 1,700 employees.

In a statement on Wednesday, the Barbados National Oil Company Limited, BNOCL, said it currently imports gasolene from and sells its crude oil to Petrotrin, while diesel and fuel oil are sourced extra-regionally. It said kerosene is imported by the oil companies Sol and Rubis.

BNOCL said that at the time of the Petrotrin announcement regarding the closure of the refinery, it was exporting 260,000 barrels of crude oil annually to the Trinidad refinery and importing 60,000 barrels of gasolene on a monthly basis.

It said the annual contract with Petrotrin entailed the exchange of the crude oil for gasolene, which aided in the reduction of the foreign exchange cost, as the value of the crude offset the outlay for the gasolene.

BNOCL said its storage capacity for gasolene is 80,000 barrels. However, as of Wednesday, September 12, its gasolene stock was at 53,582 barrels, “which is enough inventory for 25 days”.

The inventory is expected to rise to 38 days’ supply, when Petrotrin delivers another 30,000 barrels of gasolene on Saturday, September 15.

BNOCL expects to receive its final shipment from Petron over the period September 24-28 of around 30,000 to 35,000 barrels.

Altogether, assuming the shipments arrive as scheduled, the oil company expects to have enough inventory to supply local needs to November 5, assuming a “usage rate of 2,000 barrels a day.”

The Ministry of Energy and Water Resources said that through BNOCL, it has been in discussion with a number of suppliers with a view to employing a similar arrangement to that with Petrotrin.

“The goal is to ensure that this country has a consistent supply of gasolene at an affordable price, while securing a market for Barbados’ crude oil. BNOCL has never had a stock-out of petroleum products and always has adequate inventory to service Barbados, and is ever mindful of the need to do so, particularly during the hurricane season,” the ministry said.

The Mia Mottley-led government also sought to assure Barbadians that “despite the closure of the Petrotrin refinery, there will be no shortage of gasolene in Barbados,” saying it was keeping on top of the situation.

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UNICEF Works on Developing Resilience in Caribbean Islands Affected by Hurricanes

A year after two category 5 hurricanes caused destruction across parts of the Caribbean, most children in the affected countries are now back in school and have access to the services they need, thanks to the efforts of UNICEF and partners. In Anguilla, children draw as part of their Return to Happiness session. © UNICEF/UN0180293/Ward (CNW Group/UNICEF Canada)

(UNICEF Canada, 12.Sep.2018) — A year after two category 5 hurricanes caused destruction across parts of the Caribbean, most children in the affected countries are now back in school and have access to the services they need, thanks to the efforts of UNICEF and partners.

In September 2017, hurricanes Irma and María caused catastrophic damage and severely impaired facilities and services, including schools, water systems and more, across several countries in the Eastern Caribbean, Cuba and Haiti, leaving at least 1.4 million people, including 357,000 children, in dire need of assistance. A year later, most of the affected children have returned to school, and resumed their access to services—including water and sanitation.

“Despite the fact that rebuilding and recovery are almost complete, vulnerable children in these countries remain our priority, responsibility and mandate,” stated Maria Cristina Perceval, UNICEF Regional Director for Latin America and the Caribbean. “In a region impacted by hurricanes and climate vulnerabilities, building resilience is not just an option, but a need, especially for vulnerable communities and even more so, children,” she added.

The extent of the hurricanes’ impact on several islands had initially made it extremely challenging for UNICEF and partners to reach children and families most in need.

However, thanks to the generous support of donors and partners, $11.6 million was raised in the aftermath of the hurricanes last year, which helped alleviate the impact on affected children and young people. Water and sanitation services were restored, children could go back to school as buildings were rebuilt and classrooms re-stocked, family-friendly safe spaces were set up that provided psychosocial support, and a cash assistance programme was set up for families in need.

Now, with the new hurricane season underway, the continuity of programmes that began during the emergency response last year remains crucial as efforts are made to reinforce the preparedness and social protection systems; to minimize the possible consequences of future catastrophes and the effects of climate vulnerabilities; and to promote resilience in the region.

As part of its response to build resilience amongst children and communities:

— In the Eastern Caribbean countries of Anguilla, Barbuda, British Virgin Islands, Dominica and the Turks and Caicos Islands, UNICEF will continue to support the implementation of the Caribbean Safe Schools Programme, and work with governments to strengthen social protection systems. Under this programme 25,000 children in five countries will be part of disaster risk reduction plans, which are aimed at making the region’s education sector more resilient to hurricanes and other natural disasters.

— In Haiti, where 126,000 children were affected, UNICEF has invested in cholera prevention initiatives in the most affected areas and will continue to support the sustainability of prevention and protection systems.

— In Cuba, where 176,000 children were affected, UNICEF is providing critical items to support the re-establishment of a protective learning environment for 53,261 girls and 54,879 boys in 14 prioritized municipalities. In addition, in support of efforts to rehabilitate education infrastructure, UNICEF procured 56,000 m2 of waterproof covers for 69 schools and kindergartens. UNICEF also reached a total of 560,315 people (274,554 women and girls) in the 14 prioritized municipalities with safe water treatment and storage.

About UNICEF

UNICEF has saved more children’s lives than any other humanitarian organization. We work tirelessly to help children and their families, doing whatever it takes to ensure children survive. We provide children with healthcare and immunization, clean water, nutrition and food security, education, emergency relief and more.

UNICEF is supported entirely by voluntary donations and helps children regardless of race, religion or politics. As part of the UN, we are active in over 190 countries – more than any other organization. Our determination and our reach are unparalleled. Because nowhere is too far to go to help a child survive. For more information about UNICEF, please visit www.unicef.ca. For updates, follow us on Twitter and Facebook or visit unicef.ca.

Tanker Backlog Builds Again in Venezuela

(Reuters, Marianna Parraga, 6.Sep.2018) — Crude exports by Venezuela’s PDVSA have slowed after a tanker collision at its main port last month disrupted operations, adding to a backlog of vessels waiting to load, according to shipping sources and Reuters data.

Oil is the financial lifeline for the embattled socialist government of President Nicolas Maduro, but his cash-strapped administration has failed to invest enough in the industry to prevent its decline. Venezuela has sought to increase exports after asset seizures and declining output earlier this year raised the prospect of temporary suspension of contracts.

PDVSA has not said how long it will take to repair damage from the collision and resume normal loading and discharging operations. The company did not immediately reply to a request for comment.

Last week, PDVSA offered loadings at an alternative port to crude customers whose shipments were affected by the collision, but only a few have accepted so far, the sources said. That alternative, the Puerto la Cruz terminal, is limited to loading 500,000 barrels of crude per tanker, far less than the 2 million barrels PDVSA’s main port of Jose can handle.

Large tankers including three Suezmaxes and seven Very Large Crude Carriers (VLCCs) are lined up off Jose waiting to load at the available docks and monobuoys systems.

The vessel backlog around PDVSA’s ports has been increasing since late August, following the collision. As of Sept. 6, more than 20 tankers were waiting to load 26 million barrels of Venezuelan crude, according to Reuters Trade Flows and vessel tracking data.

PDVSA’s crude exports rose in July to 1.39 million barrels per day (bpd), the most since November, but last month they slipped almost 8 percent to 1.29 million bpd on Jose port’s partial operations, falling oil output and Caribbean terminal seizure attempts by creditors including U.S. producer ConocoPhillips, according to the Reuters data.

One of PDVSA’s main customers, Russia’s state-run Rosneft, loaded a 925,000-barrel cargo of diluted crude oil (DCO) during the weekend at one of Jose’s monobuoys after being diverted from the South dock, still closed because of the collision.

Rosneft-chartered Nordic Moon set sail to Malta on Sunday after waiting to load in Venezuela since early August. But the Russian company still has other four vessels waiting to load up to 6 million barrels of heavy crude at Jose, according to the data.

Jose’s South dock, which suffered damage from the collision last month, is mainly used for shipping Orinoco Belt crude and discharging imported naphtha used to dilute the country’s extra heavy oil and make it exportable.

Reporting by Marianna Parraga; Editing by Steve Orlofsky

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An Iconic Legacy Petrotrin – Not Too Big To Fail

(Trinidad and Tobago Newsday, Melanie Waithe, 5.Sep.2018) — Petrotrin has been in operation for over 97 years, and now our legacy refinery as we know it, will close. Its transition is set to begin next month. The announcement was made on the eve of our 56th anniversary of independence and Ancel Roget, president of the Oilfield Workers’ Trade Union (OWTU) commented that a move to privatise the company would bring the country back to “plantation days.”

I offer the proposition that this decision of the Petrotrin board and Cabinet was not the best option, notwithstanding the massive debt with which the company has found itself burdened, due to decisions taken over the last decade. Unfortunately, the major stakeholders could not find common ground.

However, some experts believe there are wider and deeper economic and social implications that are hinged to this decision. I heard a former energy minister ask a pertinent question: was the decision based on the company’s balance sheet, or did stakeholders consider the effects on the economy. So, what were the other options available to the board?

Joint Trade Union Movement (JTUM) members responded to the news via a press conference and issued a statement in support of the plight of their fellow OWTU members. They took the news as a declaration of war on the trade union movement.

The OWTU had proposed a plan to focus on increased productivity, accountability, and achieving production targets, with employees taking full responsibility for performance. Its plan also addressed quick-win projects yielding an additional 2,000 barrels of oil daily, and multiple other initiatives in land and offshore areas. Increasing refinery efficiencies and reviewing from whom TT imports crude were among aspects of this plan.

OWTU’s education and research officer Ozzie Warwick said the Lashley team, chaired by permanent secretary in the Ministry of Energy Selwyn Lashley agreed with the union’s recommendations and commented, “It’s strange it didn’t recommend closing the refinery. But our plan will ensure Petrotrin’s survivability.”

According to reports, Petrotrin is heavily over­staffed, with deficiencies in technical competencies in key disciplines. Manpower costs accounted for between 47 and 50 per cent of recurrent expenditure. It’s net debt at financial year-end 2017 amounted to $11.4 billion while taxes and royalties owed to Government amounted to $3.1 billion. The company is projected to continue accumulating losses at a rate of about $2 billion a year, and left as is, a $25 billion cash injection is needed to keep Petrotrin afloat. Petrotrin also needs to improve the integrity of its assets, estimated to cost around $7 billion to prevent oil leaks for example. This is indeed a dying company.

An unfortunate circumstance is that now the company is apparently bordering on insolvency, as it has been operational only due to its non-payment of taxes, and the Government’s guarantees of short-term loans.

The Government had commissioned the now termed Lashley Report and a strategic review and transition report from McKinsey and Company Inc. After the Lashley Report was received by the energy sub-committee of the Cabinet, it was passed to the ministries of energy and finance and Petrotrin for deeper reviews and analysis, following which a new board was appointed to come up with a plan to turn the company around.

The Lashley Report recommended splitting the company into three divisions: land-based production; its marine operation, Trinmar; and refining and marketing. Energy Minister Franklin Khan had said no options are off the table, but the report failed to propose staffing cuts and steered clear of privatisation. These were glaring weaknesses in the Lashley recommendations. Is it because Lashley assumed that both options would meet trade union resistance? The restructuring proposal would also prove inconsequential.

In September 2017 Cabinet had agreed that the company engage the recognised majority union to discuss cost reduction and survival strategies.

The Prime Minister claims he had formally invited Roget for discussions in an attempt to work out a way forward but the invitation was declined. The union was also apparently invited to sit on the board, and that too was declined. When Government hosted the Spotlight on the Energy Sector at the Hyatt Regency Trinidad, the union once again declined the Government’s invitation.

I seriously question the union’s motives in its unavailability to consult and participate in good faith in discussions to find workable solutions for such an important state-sector company. Was this the best representation the union could have made in the interest of its members and our citizens? Was there sufficient consultation to generate the best ideas given the real-time situation at Petrotrin?

At the worker level, we all should sympathise and offer our collective support as their lives will be altered due to decisions made by others. Given the vacuum created, and the absence of business suggestions to offer alternative opportunities, we would be left with higher unemployment and affected communities.

The Government has now made a bold poker move by “bluffing” the union when the PM publicly offered to sell Petrotrin’s refining assets to the OWTU. This offer should not have surprised anyone, as all reports dealt with the asset integrity of the company, given that the plant is close to 100 years old and carries little, if any, value on Petrotrin’s books. Mothballing the plant would simply not be a strategic economic option, and therefore its sale to a private operator was always on the cards.

The question then is, if the refinery is sold, would the successor company inherit the terms and conditions of the collective agreements? In other words, would any new refining company be viewed as a legal successor to Petrotrin.

This move I think is a well played one, as it now challenges the union to “put its money where its mouth is”. It also provides the Government with the public relations and politically defensive cover of being worker sensitive, while at the same time putting the union into the space to do what they have been calling on Government to make happen.

What is now very clear is that the Petrotrin refinery is not too big to fail, as we have survived both the dismantling of CL Financial, as well as the closure of Caroni Ltd. This too we will survive.

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Petrotrin Financials, Details About Pointe-a-Pierre Refinery

(Energy Analytics Institute, Ian Silverman, 29.Aug.2018) — It’s official: Petrotrin or the Petroleum Company of Trinidad and Tobago Limited will cease to operate its lone refinery located at Pointe-a-Pierre.

What follows are details about the company, as per its website.

OUR COMPANY

We are an integrated oil and gas company, engaged in the full range of petroleum operations including the exploration for, development of and production of hydrocarbons, and the manufacturing and marketing of a wide range of petroleum products.

Our position in the energy sector is strengthened by more than 100 years of predecessor experience in crude oil production and manufacturing in this country. (See Our History)

Our organization, Petroleum Company of Trinidad and Tobago Limited (Petrotrin) was incorporated on January 21, 1993 to consolidate and operate the petroleum producing, refining and marketing assets of State-owned enterprises: Trinidad and Tobago Oil Company Limited (Trintoc) and Trinidad and Tobago Petroleum Company Limited (Trintopec). In 2000, these assets were further extended with the acquisition of Trinmar Operations.

As a state-owned Company, Petrotrin is under the direct control of the Minister of Finance acting as Corporation Sole.

The Ministry of Energy and Energy Affairs is the line ministry that provides the specialized technical analyses and statutory approvals for the Company’s operations, while ensuring adherence to the Government’s policy guidelines. (See Governance)

Today, we are Trinidad and Tobago’s largest crude oil producers. We also have an interest in some natural gas production. Our operations and partnerships cover most of the island of Trinidad and much of the waters surrounding the island of Tobago.

We operate Trinidad and Tobago’s only petroleum refinery. Our refinery has a full conversion capacity of up to 168,000 bpd and average throughput of approximately 112, 974 bpd. Our petroleum products are sold locally and as well as to customers across the Caribbean, Latin America and the eastern seaboard of the United States of America. (See Our Operations)

We are one of the largest employers in Trinidad and Tobago with a dedicated workforce of more than 5,000 people. Our team is committed to optimizing our energy resources for the benefit of our stakeholders. As such, we are committed to operational excellence, personal accountability and sustainable practices throughout our operations. (See Sustainable Development)

Together, our people, rich history, extensive operations, sustainable practices, long standing relationships and strategic mid-Atlantic location have strengthened customer confidence in our position as a leading supplier of petroleum products.

Petrotrin’s Board of Directors

FREQUENTLY ASKED QUESTIONS

What is Petrotrin’s main business?

Petroleum Company of Trinidad and Tobago Limited (Petrotrin) is an integrated oil and gas company engaged in the full range of petroleum operations including the exploration for, development of and production of hydrocarbons, and the manufacturing and marketing of a wide range of petroleum products.

When was Petrotrin incorporated?

Petrotrin was incorporated in January 1993, merging selected assets of state owned Trinidad and Tobago Oil Company (TRINTOC) and Trinidad and Tobago Petroleum Company (TRINTOPEC).

Our roots can however be traced to the beginning of commercial oil production in Trinidad and Tobago through predecessors who were listed among the nation’s earliest prospectors in oil and gas.

Who owns Petrotrin?

Petrotrin is a limited liability company, wholly owned by the Government of the Republic of Trinidad and Tobago. The Company is under the direct control of the Minister of Finance as Corporation Sole. The Ministry of Energy and Energy Affairs is the line ministry that provides specialized technical analyses and statutory approvals for our operations while ensuring adherence to Government’s policy guidelines.

How many people are employed by Petrotrin?

Petrotrin has a combined workforce of more than 5,000 employees, the majority of whom are in the core operating areas. Indirect employment is also provided for thousands more.

Where is Petrotrin’s Refinery located?

Our Refinery is located at Pointe-a-Pierre, on the west coast of Trinidad on 2,000 acres of land, approximately 56 kilometres north of San Fernando along the coast of the Gulf of Paria.

What types of products are processed at Petrotrin’s refinery?

Our main refined petroleum products include Liquefied Petroleum Gas, Aviation Fuel, Motor Gasoline, Diesel and Fuel Oil.

Where are Petrotrin’s E&P operations located?

Petrotrin’s E&P operations are spread across the southwestern peninsula of Trinidad. The Company also has E&P operations offshore. Petrotrin operates several E&P offices located at Santa Flora, Point Fortin, Penal, Guayaguayare and Forest Reserve.

OUR PRODUCTS

Avjet Kerosene

Aviation Jet Fuel is a grade of kerosene intended for aircraft powered by turbine engines due to its high flashpoint.

Aviation Gasoline

Aviation Gasoline or Avgas is a grade of gasoline used in the internal combustion engines of aircraft. With a higher octane than Motor Gasoline, Avgas is highly refined so that it remains in a liquid state at low pressure in high altitude.

Diesel Heating Oil

Diesel is an important transportation fuel used in diesel engines found in vehicles, heavy machinery, boats and even power generators.

Fuel Oil

Heavier than diesel, fuel oil is typically used for heating, bunkering and other industrial purposes. Low and medium sulphur fuel oils are available at Petrotrin. Typically, the material is low pour, low metals with less than 8% asphaltenes.

Liquified Petroleum Gas

Liquefied Petroleum Gas or LPG is a group of gases, mainly propane and butane, that have been liquefied under high pressures. LPG is used in a variety of ways including heating, cooking and refrigeration.

Sulphur

At Petrotrin, pelletized sulphur is available for loading in bulk by conveyor belt.

Motor Gasoline

Lighter than Diesel Fuel, Motor Gasoline is the main transportation fuel used in cars and light transportation vehicles. Motor Gasoline has different grades with varying octane numbers that remark on a fuel’s resistance to knock.

We manufacture motor gasolines to customer specifications. We supply the local, regional, Latin American and US Gulf Coast markets.

LAST FINANCIAL REPORT

Petrotrin’s Balance Sheet and Income Statement

Petrotrin’s Cash Flow Statement

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Trinidad Imports 40% of Oil from Russia

(Energy Analytics Institute, Ian Silverman, 27.Aug.2018) —Trinidad and Tobago is relying on Russia as its main source of imported crude oil.

Between January and June 2018, the small twin-island country imported over 15 million barrels of crude oil from the [Petrotrin] refinery. Of that, 40% of the crude oil imports came from Russia, 29% from Colombia, 22% from Gabon, 8% from Canada and 1% from Barbados, announced Trinidad and Tobago’s Energy Chamber in a twitter post.

Caribbean Economist Marla Dukharan commented on the situation in the following twitter post.

***

Venezuela Gas Price Deal Competitive—Khan

(Trinidad Guardian, 27.Aug.2018) — Government is giving no details on the pricing structure this country will pay for gas from the Dragon Field under the agreement signed with Venezuela on Saturday, but Energy Minister Franklin Khan is assuring that the pricing structure agreed to was competitive and followed “months of negotiation, serious intervention, serious sharing of information and serious sharing of economic models, to come up with an appropriate gas price”.

Speaking during a press conference at the Hyatt Regency in Port-of-Spain, yesterday, Khan said, “It is no cheap gas. It is competitively priced gas and is obviously no secret Dragon deal.”

Khan said Venezuela has the largest oil reserves in the world, larger than Saudi Arabia, Russia and the United States and has the fifth largest gas reserves in the world, which this country can benefit from.

“It’s a win-win situation, especially since we in Trinidad face challenges on the supply side,” he said.

T&T, he said, also has world-class gas infrastructure through which Venezuela can monetise its gas.

“This provides an ideal opportunity for Trinidad and Venezuela. If I can say so, I think it is a marriage made in heaven,” Khan said.

Khan said he took “umbrage” with the way the media reported on the deal signed in Caracas on Saturday by Prime Minister Dr Keith Rowley and Venezuelan President Nicholas Maduro, as he dismissed a report in another daily newspaper that under the deal the T&T Government would be buying the gas at a mere US$1 per MMBTU. Khan said that was simply trying to create mischief by telegraphing to the Venezuelan people that the government was selling “cheap gas to Trinidad and Tobago”. However, he said the price being paid was substantially more.

Both countries, according to Khan, have benefitted, as T&T could import the gas, process it into LNG and for downstream petrochemicals “and still make a profit and it is a price acceptable to the Venezuelans to get a good monetary return for the resources they own.”

Khan said when Rowley was asked by T&T Guardian journalist Curtis Williams about the price, “Dr Rowley said these gas prices are subject to strict confidentiality clauses. However, he took the liberty to say the prices are very competitive and in some cases lower than what we are paying to domestic upstream producers in Trinidad and Tobago”.

He said it was widely known in the energy sector that “the commercial terms of gas sales agreement are subject to the strictest confidentiality clauses”. As he revealed that he could not even answer a question in the Parliament on pricing when asked some time ago, he said because of the confidentiality clause.

“No government past or present, UNC or PNM, has ever made known to the public any negotiated price of gas,” Khan said.

The PM did, however, reveal that under the agreement the volume of gas to be provided will be 150 million cubic standard feet per day with an option to go to 300 million standard cubic feet per day.

On Saturday, Rowley and Maduro signed two documents – a base term sheet for the Dragon Gas deal which set out the commercial term for the gas sales agreement, including volume and price, which was signed by the Venezuelan state oil company PDVSA, Shell as the private investor and the National Gas Company.

Another agreement was signed where both governments committed to the implementation of the project and to see it to finality. Khan said while it was a cross-border relationship with Shell, PDVSA and NGC, “at its most fundamental level it is a government to government arrangement”. He said the gas deal had the effect of securing “a long-term symbiotic relationship with Venezuela”.

He said it was a pricing model and template to allow them to move forward with other fields, including the Loran Manatee, which was the first cross-border project identified between the two countries more than a decade ago.

The Loran-Manatee field contains in excess of 10 trillion cubic feet of gas with 7.3 TCF on the Venezuela side and 2.7 TCF on the Trinidad and Tobago side of the border. Khan said Maduro suggested and PM Rowley agreed “we should develop agreements for the production of Loran Manatee.”

***

Dragon Gas Deal May Be ‘Political Gimmicks’

(Trinidad and Tobago Newsday, Richardson Dhalai, 26.Aug.2018) — The Dragon gas deal may be “public relations and political gimmicks” which may not benefit TT.

That’s the view of Pointe-a-Pierre MP David Lee who, in a media release yesterday, cited the 2016 trade deal between TT and Venezuela saying some local manufacturers had not yet been paid for goods which had been delivered to the South American nation.

On Saturday, Prime Minister Dr Keith Rowley and Venezuela’s President Nicolas Maduro shook hands to seal the deal that will see TT for the first time processing Venezuelan natural gas.

However Lee, in his statement, said recent public statements by the TTMA have indicated that “some manufacturers have not yet been paid for goods delivered to Venezuela which formed part of a trade deal fostered between the governments of our nation and Venezuela in 2016.”

He said this is not only proof of government’s “failed commitment” to the manufacturing sector but also “signs of a government which continues to abandon its responsibility of protecting our nation’s economic framework.”

“We in the Opposition were always concerned with this agreement given the economic hardship being experienced by the Venezuelan Government as well as this Government’s track-record of incompetence.” Lee said several questions had been directed to the Trade and Industry Minister Paula Gopee- Scoon in the Parliament but she had “on each occasion would respond by saying that some payments were still being received for shipped goods.”

“It is therefore unacceptable and irresponsible that over one year since these questions were first posed and over two years since goods were first shipped to Venezuela manufacturers have not been adequately compensated.”

He said the trade deal was a “government to government initiative” and questions have to be asked why the minister failed to take a trade delegation to Venezuela to address the issue.

“Did Government, knowing that Venezuela would not be able to keep its financial commitment just use our manufacturers as a bargaining tool to gain access to Venezuelan natural gas? They called the Opposition Members unpatriotic when we questioned these deals however the issues presently surrounding these non-payments demonstrate why the Opposition did so. Therefore our nation must remain vigilante and find no comfort in the signing of the Dragon Gas Deal which took place yesterday in Venezuela as this could be all about Public relations and political gimmicks as was seen with this trade deal.”

***

Five Things About T&T, Venezuela’s Dragon Gas Deal

(Loop News, 26.Aug.2018) — On August 25, 2018, an historic agreement was made between Prime Minister Dr Keith Rowley and Venezuelan President Nicolás Maduro for access the Venezuela’s Dragon Field.

Source: PDVSA, Venezuela’s Ministry of Petroleum

Here are five things to know about the Dragon field gas deal:

  1. Dragon will produce 150 million cubic feet per day

The Dragon field, part of the Mariscal Sucre offshore gas project, is projected to produce an estimated 150 million cubic feet per day of natural gas from four wells. The Dragon Field contains approximately 2.4 trillion cubic feet of natural gas.

The Mariscal Sucre Dragon and Patao fields, located in water depths between 328-427 feet (100-130 metres), are situated nearly 25 miles north of Venezuela’s Paria peninsula in Sucre state.

It’s expected that production from Venezuela’s four fields which comprise the Mariscal Sucre project – Mejillones, Rio Caribe, Dragon and Patao – will reach 1.2 billion cubic feet per day of natural gas and 28,000 barrels per day of condensates, and will be directed primarily toward export.

  1. Gas to be transported via 30km gas pipeline

The gas will be transported to the Hibiscus platform off the north-west coast of Trinidad, just 18 kilometres from the gas field. Hibiscus is jointly owned by the T&T government and Shell.

The project involves the construction of a 30km gas pipeline – construction of pumping stations, metering systems and related facilities, the laying of gas pipelines, and the installation of safety and control systems.

In March 2017, Shell signed an agreement with NGC and PDVSA to build a 17km pipeline from the Dragon Gas Field to Hibiscus platform.

  1. PM says details ‘confidential’

Details of the deal are ‘confidential’, according to Dr Rowley, but he said the agreed-upon price was ‘competitive’.

  1. Dragon’s gas to be used for T&T products

In the first phase, the gas from the Dragon will boost the country’s gas supply for both the LNG and the petrochemical sectors. T&T plans to expand domestic gas production to 4.14 Bcf/d by the end of 2021.

  1. Dragon project to cost approximately US$100 million

The project will cost an estimated US$100 million, according to media reports. First gas from Dragon is expected in 2020.

***

PDVSA, Citgo Evaluating Aruba Gas Plan

(Energy Analytics Institute, Piero Stewart, 25.Aug.2018) — Venezuela is evaluating a plan to implement a natural gas project with Aruba.

Officials from Venezuela’s state oil company PDVSA, and its refining arm Citgo Petroleum Corporation continue to evaluate the potential of such a project that would imply a gas interconnection between Venezuela and Aruba, reported PDVSA in an official statement.

No further details about the plan were revealed by PDVSA.

***

Aruba’s San Nicolás Refinery to Take Faja Oil

(Energy Analytics Institute, Piero Stewart, 25.Aug.2018) — Valero’s old Aruba refinery will be revitalized as an upgrader.

PDVSA announced the San Nicolás Refinery located in Aruba will be converted into an upgrader in order to process extra-heavy oil from Venezuela’s Hugo Chavez Orinoco Heavy Oil Belt, also known as the Faja.

Citgo Aruba Refinery. Source: PDVSA

The upgrader will have capacity to process 200,000 barrels per day, reported PDVSA in an official statement.

Venezuela — the country with the world’s largest oil reserves, and reeling in political, economic and humanitarian crises and suffering from the world’s highest inflation – continues to struggle to stop oil production declines. The country’s refineries and upgraders continue to suffer from a lack of investment, among other issues that continue to affect the OPEC country’s oil patch.

No further financial details related to refinery conversion were revealed by PDVSA.

***

MEEI Updates on Status of Trinidad Energy Infrastructure

(MEEI, 24.Aug.2018) — The Ministry of Energy and Energy Industries (MEEI) has been monitoring the impacts of the 6.9 magnitude earthquake which occurred on Tuesday 21st August, 2018 at 5:31 p.m. that reportedly caused some property damage across the country.

Reports from the energy sector companies have, so far, indicated that there have been no visible structural damage to offshore and onshore infrastructure, although assessments are currently ongoing.

Some companies, such has Shell, opted to shut-in offshore facilities to conduct such assessments.

In particular, with respect to Trinmar, some offshore installations have been minimally impacted, the most serious being structural damage to the Block Station Bridge on Platform 4 in the Main Soldado Field. A team of Construction Engineering personnel has since examined the damage with the aim of developing measures to rectify the situation. Plans for corrective measures to restore workmen facilities and other general utilities are also being finalized.

At the Petrotrin Refinery, there have been no reported disruptions, save and except impacts to the loading arm for loading vessels with petroleum products. As such, there is expected to be delays in loading vessels for the time being.

There have been reported impacts to office buildings in Port of Spain such as Albion Plaza, Shell House, NPMC Sea Lots, and Atlantic.

NP has assured that there is an adequate and available supply of fuel at its service stations.

The National Gas Company (NGC) has indicated that there was no damage to its facilities and infrastructure. Atlantic LNG’s facilities and infrastructure at Point Fortin were not affected and continue to produce.

Further, there have been no reported damage to any of the following organisations/facilities:

Petrochemical Plants

— Methanol Holdings Trinidad Ltd

— Point Lisas Nitrogen Ltd

— Yara & TRINGEN

— Caribbean Nitrogen Company & N2000

Natural Gas Liquids Facilities

— Phoenix Park Gas Processors Ltd Power Generation

— Trinity Power Ltd

— PowerGen

— Trinidad Generation Unlimited

The Ministry is awaiting responses from other stakeholders. As assessments continue the public will be advised on any further developments accordingly.

***

Dragon Gas Deal Finalised Tomorrow

(Trinidad and Tobago Newsday, Carla Bridglal, 21.Aug.2018) – After nearly two years of negotiations between this country and Venezuela the deal that will allow TT to process gas from the Dragon gas field is expected to be finalised tomorrow.

A release from the Office of the Prime Minister (OPM) said the agreement on the final terms for the development of the across the border gas from Venezuela’s Dragon gas field will be signed tomorrow by representatives of the National Gas Company, Venezuela’s state oil company, PDVSA, and Shell, the multinational energy giant with the rights to drill the Dragon field.

OPM said A “high-level Venezuelan delegation” will also participate, along with representatives of the TT Government, to witness this “historic event.”

In late June, Stuart Young, then a Minister of State in the Officer of the Prime Minister, said while discussions were almost complete, price was the main sticking point.

In December 2016, Prime Minister Dr Keith Rowley had visited Venezuela, and along with that country’s President, Nicolas Maduro, signed an agreement that put the plan in motion for TT to process Dragon’s gas.

First gas then was estimated by 2020; that timeline is still on track. Young had given reporters a timeline of 18 months to two years to get first gas here—providing the deal is signed soon.

A special purpose vehicle between multinational energy giant Shell and the National Gas Company (NGC) has been created to lay down the infrastructure; Shell’s pipelines, including those in the North Coast Marine Acreage will be used to transport Dragon’s gas to the Hibiscus platform off the north-west coast of Trinidad and only 18 kilometres away from the gas field.

Hibiscus is jointly owned by the TT government and Shell. The first tranche of Dragon’s production will yield about 150 million standard cubic feet of gas per day (mmscfd), or 26,505 barrel of oil equivalent per day (boed). For comparison,

Petrotrin produces 43,000 barrels of oil per day and 130 mmscfd; bpTT’s Juniper well, which came on stream in the latter half of 2017, produces about 590 mmscfd.

The Dragon field is part of the Mariscal Sucre natural gas complex off the Caribbean coast of Venezuela, north west of Trinidad. That Dragon is just one of the fields in a total acreage reserve of 14.7 trillion cubic feet of gas. Dragon alone contains 2.4 tcf.

***

Panama, US To Sign Pact To Expand Access To LNG

(Reuters, David Lawder, 17.Aug.2018) – Panama on Friday will sign an agreement with the U.S. Treasury and Energy departments aimed at paving the way for more private investment to expand the importation and distribution of U.S. liquefied natural gas in Latin America.

David Malpass, Treasury undersecretary for international affairs, said he hopes the “framework agreement” is the first of several with countries in the region to encourage investment to increase access to cheaper, cleaner energy.

The agreement is part of a Treasury-led initiative called America Crece, incorporating the Spanish word for growth, aimed at boosting U.S. LNG exports, developing Latin American energy resources and downstream demand.

Malpass is in Panama for the signing and the inauguration of a major new LNG terminal and 381-megawatt gas-fired power plant in Colon, Panama, run by U.S. power company AES Corp.

He said in an interview that new investments encouraged by the agreement will help turn the AES Colon project into an LNG distribution hub, with cargoes imported from the United States sent to other countries in the region, including Guatemala, Honduras, Nicaragua.

These countries and many Caribbean islands now rely largely on oil to generate electricity, with Venezuela a major supplier.

In 2017, French utility Engie and AES established a joint venture to market and sell LNG to third parties in Central America using the Panama terminal as a distribution hub.

The $1.15 billion AES facility on Panama’s Caribbean coast, which is expected to begin commercial generating operations on Sept 1, and LNG tank distribution operations in 2019, took in its first U.S. LNG cargo in June.

The Panama agreement allows for the U.S. agencies to help address regulatory and other barriers to investment, Malpass said, which can create opportunities for downstream demand and distribution.

“The framework agreement itself squarely addresses the obstacles that the private sector may be finding in that country,” Malpass said. In the case of Panama, he added, the framework agreement with the United States is a signal from Panama to the world that it welcomes investment, in particular private sector funding of projects.

The agreement also aims to encourage increased electrical grid access in rural areas of Panama and Central America and adoption of new technologies such as battery storage to improve reliability and foster economic development, he said.

(Reporting by David Lawder; Editing by Steve Orlofsky)

***

Shell Oil Traders Trade One Caribbean Paradise For Another

(Reuters, Julia Payne, 17.Aug.2018) – Royal Dutch Shell’s oil traders in the Caribbean island of Barbados are getting ready for a tough gig – they’re being moved to the Bahamas next month.

The relocation of the oil and gas company’s trading hub for Latin America will make travel to customers in the key region easier for its employees, a company spokeswoman said.

Shell’s oil output in South America jumped sharply in 2016 after it acquired BG Group, which had a large portfolio of assets in Brazil. The country now accounts for about 10 percent of the group’s oil and gas production.

In the first half of 2018, oil production in the region was 335,000 bpd, according to company data. In 2015, South American output was only 38,000 bpd.

“Shell Western Supply and Trading can confirm it is relocating from Barbados to the Bahamas, effective September 2018,” the spokeswoman said.

“The requirement to move arose after the expansion of our customer footprint following the BG integration. As we look to grow our business, the location of the Bahamas will enable us to meet with our customers more frequently.”

In the past the office was primarily focused on west African crude trading, particularly oil out of Nigeria where it has a major presence, a source familiar with the matter said.

The office of about 45 people has many expatriates who handle the whole chain around trading, including the financial side, legal, shipping and operations, the source said.

Brazil remains a key investment focus for Shell, which was awarded more offshore deep-water exploration licenses this year. The country has some of the world’s most enticing offshore geology, with billions of barrels of oil contained beneath a thick layer of salt under the ocean floor.

The allure of the Caribbean’s palm trees and calm, pristine beaches make job openings at Shell’s office among the most coveted, traders said.

(Reporting by Julia Payne Additional reporting by Ron Bousso Editing by David Holmes)

***

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.

***

 

Webinar Panelist Discuss All Things Guyana

(Energy Analytics Institute, Piero Stewart, 15.Aug.2018) – The three promised to return to discuss all things Guyana again in six months as the small South American country eyes first oil in 2020.

A three person panel — comprised of Guyana’s Minister of Finance, the Honourable Winston Jordan, Trinidad and Tobago’s Former Energy Minister Kevin Ramnarine, and hosted by Caribbean Economist Marla Dukharan — discussed issues related to Guyana included but not limited to oil, economics, finance, supply issues, infrastructure, and migration, among others (watch the full video below).

What follows are brief highlights as posted during the webinar under the Twitter hashtag #LatAmNRG:

From Kevin Ramnarine …

— “In Guyana, we have moved from 1 to 8 discoveries,” Ramnarine says. He continued: “With an 80% success rate, only 2 wells have been dry.”

— “The whole world is talking about Guyana,” Ramnarine says.

— “Oil production in Guyana is expected to come online at 120,000 barrels per day d in 2020 and peak at 750,000 barrels per day by 2025, according to Exxon,” Ramnarine says.

— “In the early years, Exxon will likely recover Capex. Then, by 2025 we could see an exponential rise in revenues [in Guyana],” Ramnarine says.

— “An infrastructure deficit in Guyana has slowed development in the interior of the country,” Ramnarine says.

— “You want a competitive oil and gas sector that supports that sector,” Ramnarine says.

— “The private sector should take the lead to develop [Guyana’s] infrastructure,” Ramnarine says.

From Winston Jordan …

— “ExxonMobil has put Guyana on the map,” Jordan says.

— “We see ourselves as the Dubai of the Caribbean,” Jordan says.

— “Guyana has infrastructure and human capital resources deficits,” Jordan says.

— “The Guyana tax system is expected to become more efficient in the future,” Jordan says.

— “We have a lot of challenges, but none are insurmountable,” Jordan says.

— “Guyana is putting together a migration policy to give certain benefits to those wanting to return home,” Jordan says.

— “Guyana will seek a loan with the World Bank to assist in the migration process,” Jordan says.

— “There is no definite word yet about a future refinery in Guyana,” Jordan says.

(With special assistance from Melissa Marchand, who moderated the Q&A session).

***

Venezuela Petrol Prices Need to Rise to Stop Smuggling

(Reuters, Deisy Buitrago and Brian Ellsworth, 14.Aug.2018) – Venezuela’s heavily subsidised domestic gasoline prices should rise to international levels to avoid billions of dollars in annual losses due to fuel smuggling, president Nicolas Maduro has said.

“Gasoline must be sold at an international price to stop smuggling to Colombia and the Caribbean,” Mr Maduro said in a televised address on Monday.

Venezuela, like most oil producing countries, has for decades subsidised fuel as a benefit to citizens.

But the country’s fuel prices have remained practically flat for years despite soaring hyperinflation the International Monetary Fund has projected would reach 1,000,000 per cent this year.

For the price of a cup of coffee, a driver can fill the tank of a small SUV nearly 9,000 times

That means that for the price of a cup of coffee, a driver can now fill the tank of a small SUV nearly 9,000 times.

Smugglers can make considerable profits reselling fuel in neighbouring countries.

Mr Maduro said the government would still provide “direct subsidies” to citizens holding the “fatherland card,” a state-issued identification card that the government uses to provide bonuses and track use of social services.

He said the subsidy was only available to those who registered their cars in a vehicle census being conducted by the state.

***

Whither Guyana?

(Energy Analytics Institute, Pietro D. Pitts, 14.Aug.2018) – On a per capita basis, Guyana is already probably the most resource-rich country on the planet, but is still the poorest English-speaking country, and the 2nd poorest overall after Haiti, writes an Caribbean region economist.

As the size of oil discoveries in Guyana begin to suffer from diminishing marginal stock-value, attention is shifting to the billion-dollar question – will Guyana somehow leapfrog itself into the region’s shiny new Norway, or devolve further into resource-cursed-istan? That’s the question posed by Caribbean Economist Marla Dukharan in her August “Caribbean Monthly Economic Report.”

“Like true West Indian cricket fans, we pray despite formidable odds for Guyana’s success but we smell the molasses-like bittersweet stickiness of corruption and all its concomitant dysfunctionality,” she writes.

Guyana’s Oil Outlook: The Nor-way or the Next-Door-Neighbour-way?

To this end, Dukharan along with the Honourable Winston Jordan, Guyana’s Minister of Finance, and Kevin Ramnarine, the Former Minister of Energy in T&T, plan to discuss the oil outlook for South America’s Guyana in a webinar on Wednesday 15 August 2018.

***

SeaOne Caribbean Fuel Project Recognized as Strategic

(SeaOne Caribbean, 13.Aug.2018) – SeaOne Caribbean, LLC, which is developing the Caribbean and Central American Fuels Supply Project for natural gas and natural gas liquid (NGLs) delivery, announced that CG/LA Infrastructure has recognized SeaOne’s project as the region’s Top Strategic Infrastructure Project for 2018. The award was handed out at the recently-concluded CG/LA 16th Latin American & Caribbean Infrastructure Leadership Forum in Miami, Florida.

In determining SeaOne’s eligibility for this premier recognition, CG/LA examined the project’s, “long term benefits, the measurable opportunities that each project creates for the health, mobility, education and quality of life for citizens in their communities, their states and their countries.” CG/LA Infrastructure Inc. is the leading global consultancy offering strategic advisory and development services to the private and public infrastructure community.

Forrest Hoglund, SeaOne’s Chairman and CEO, stated, “The prosperity of many Caribbean, Central and South American countries is stymied by challenges related to expenditures on fuel and power generation that far outweigh other developed parts of the world. SeaOne’s technology and know-how solves this challenge through the use of the company’s patented technology that allows, for the first time, the importation of low-cost U.S. natural gas and NGLs in a single liquid cargo to regional customers who — for economic, environmental and regulatory reasons – are compelled to reduce their dependence on oil. We are pleased in the strong customer interest from key Caribbean and Central American countries to date, and are especially gratified that CG/LA has recognized SeaOne as the top regional infrastructure project for 2018.”

As a part of SeaOne’s Fuels Supply Project, SeaOne plans to build a Compressed Gas Liquid (“CGL”™) production and export terminal in Gulfport, MS, to deliver CGL to Caribbean and Central, and Latin American markets. SeaOne’s patented CGL process includes the manufacture of a solvated solution by chilling, pressurizing, and combining natural gas and NGLs. The final solvated CGL product includes methane, ethane, propane, butane, isobutene, and pentane. CGL presents an alternative to the high-cost and non-environmentally friendly fuel oil products the region currently uses for power generation and other fuel needs. SeaOne’s project will play a key role in assisting the countries of this region with achieving a sustainable energy economy.

Key, defining characteristics of SeaOne’s Caribbean and Central American Fuels Supply Project include the following assets:

— CGL Production and Export Facility to be located at the existing Port of Gulfport, Mississippi;

— Compressed Gas Liquid Carriers (“CGLCs”) for the marine transportation and delivery of the CGL cargo to markets;

— CGL Receiving Terminals located at markets in the Caribbean, Central and South America. The Dominican Republic is to serve as a Central Caribbean Hub and Colombia to serve as a Southern Caribbean Hub.

***

Jamaica Enters New Programme with Energy Agency

(Jamaica Gleaner, McPherse Thompson, 9.Aug.2018) – Jamaica signed a new agreement with the International Atomic Energy Agency, IAEA, which will see the application of atomic energy in agriculture and industry as a means of stimulating economic growth.

This marks their second programme and Jamaica now has a national portfolio of nine ongoing projects supported by a budget of €2.77 million.

The country programme adheres to the goals of the 2030 national development plan, which seeks to guide Jamaica’s development path towards the achievement of developed country status, said Dr Wayne Henry, Director General of the Planning Institute of Jamaica, at the signing ceremony held at PIOJ’s offices in New Kingston on Thursday.

IAEA deputy director general Dazhu Yang signed on behalf of the atomic energy agency.

Henry said the new country programme, which covers the period 2018 to 2023, will focus on water and environmental management, health and nutrition, food and agriculture, nuclear and radiation safety and security, as well as energy and industry.

It also signals a new era in the project in that the soon-to-be completed and re-established nuclear medicine facility at the University of the West Indies, UWI Mona, will open the door to significantly enhanced treatment of cancer and other non-communicable diseases, Henry said.

The increasingly wide reach of nuclear technology is demonstrated in its application to a range of other development issues through projects seeking to determine the availability of adequate water resources in the Kingston hydrological basin, he added.

It is also used to optimise irrigation water management to improve crop output and water quality control in the Rio Cobre basin by utilising water and fertiliser in an efficient manner, and increase productivity of onions and sweet potato by training personnel in isotopic techniques.

Agriculture has been targeted for the production of economically important crops to produce higher yields and better quality with resistance to disease, adverse climatic conditions and shorter production cycles.

“This will help Jamaica to survive in the global marketplace and maintain its competitive advantage in certain food areas,” said the PIOJ head.

The scope of the assistance has also been extended to nutrition in children with the aim of promoting healthy growth by assessing the role of parenting and early life influences on body composition and energy expenditure.

The Government of Jamaica joined the IAEA in 1965 and for many years after only benefited from a limited programme with the organisation, said Henry.

However, with the installation of the Slowpoke nuclear reactor at the UWI Jamaica became a participant in the agency’s technical co-operation programme, and its engagement became more extensive as local knowledge of the various nuclear applications available grew.

Under the guidance of the IAEA, Jamaica has graduated from the use of the technology at the International Centre for Environmental and Nuclear Sciences — ICENC — only to much more extensive applications, evidenced in a wide range of programmes and projects.

Henry said growth in the use of the science is also demonstrated in the research programme in health and other critical areas being undertaken by students in the ICENS medical physics programme.

Jamaica has emerged as the first in the Caribbean to have accomplished milestones such as the establishment of the medical physics department at the UWI, which trains nuclear physicists from Jamaica and elsewhere in the region.

The PIOJ said the IAEA recently approved another nine project concepts to be funded under the 2020/21 cycle. They will focus on food and insect irradiation, coastal and marine pollution, obesity in young children, ground and surface water management, improved resistance to leaf rust disease in coffee, development and use of nuclear cardiac imaging in the diagnosis and management of cardiac patients in non-communicable diseases, the use of nuclear medicine for diagnosis and treatment of surgical patients, development of a sustainable cancer care system in Jamaica, and the use of radiosurgery technology at the university hospital for treatment of cancer patients and to provide a comprehensive training programme in radiation medicine.

***

Caribbean Plugs into Electric-Car Revolution

(Trinidad Express, Sophie Hares, 7.Aug.2018) – With her foot down to show off the acceleration of the zippy electric car, Joanna Edghill spins around the car park before plugging the vehicle into a charging point beneath rows of solar panels converting Caribbean rays into power for the grid.

In the five years since she and her husband started their company Megapower, it has sold 300 electric vehicles and set up 50 charging stations plus a handful of solar car-ports on the 21 mile-long (34 km) island of Barbados.

Read the full story here.

***

Shell calls in a BIG RIG

(Trinidad Express, Aleem Khan, 7.Aug.2018) – More hints that major discovery on the horizon.

Offshore Trinidad was one of two sites in the world where oil and gas service provider Rowan Companies plc debuted its ultra-harsh environment jack-up rigs, New York Stock Exchange (NYSE) investors heard last week. The other site was in the North Sea, offshore continental Europe.

Rowan president and chief executive officer (CEO) Tom Burke said: “While overall market conditions for offshore drilling remain challenging, demand for rigs has improved year to date. Since the beginning of the second quarter 2018, Rowan has been awarded contracts for both drillships and jack-up rigs.

Read the full story here.

***

BPTT Announces Angelin Arrival in Trinidad

(BPTT, 2.Aug.2018) – BP Trinidad and Tobago announced its Angelin platform has arrived in T&T.

Angelin, which will be BPTT’s 15th offshore platform, was fabricated in Altamira, Mexico. The topside and jacket sailed from Altamira on June 30. Over the next few weeks they will be installed off the south east coast of Trinidad.

BPTT’s Angelin platform. Source: BPTT

The Angelin facility will be located 60 kilometres off the south east coast of Trinidad in water-depth of approximately 65 metres. Angelin was originally discovered by the El Diablo well in 1995 and appraised by La Novia in 2006. The development will include four wells and will have a production capacity of approximately 600 million standard cubic feet a day (mmscfd). Gas from Angelin will flow to the Serrette platform via a new 21-kilometre pipeline.

First gas is expected in the first quarter of 2019.

BPTT Regional President Claire Fitzpatrick said: “Angelin is part of BPTT’s long-term plan to develop its resources in the Columbus Basin and the development underscores BPTT’s commitment to Trinidad and Tobago. The safe arrival of the jacket and topsides is an important milestone and we are now focusing on the next stages of the project as we progress towards first gas in 2019.”

Trinidad and Tobago nationals were involved in the construction of Angelin and BPTT has also sought to share lessons learned during construction of the platform. As part of this effort, the company facilitated a visit to the Altamira fabrication yard by representatives from the Government and private sector.

Notes:

  • The Angelin facility will be a Normally Unmanned Installation (NUI)
  • Angelin was originally discovered by the El Diablo well in 1995 and appraised by La Novia in 2006.
  • Gas from Angelin will flow to the Serrette platform via a new 21-kilometre pipeline.

***

Wheatley Falls: Latest Casualty of Energy Scandal

(Jamaica Gleaner, Edmond Campbell, 31.Jul.2018) – The ongoing scandal that began at the state-owned oil refinery Petrojam has claimed its latest casualty with the resignation yesterday of Andrew Wheatley as minister of science and technology. This follows several weeks of allegations of nepotism and cronyism that triggered investigations from several state watchdog agencies.

Responding to Wheatley’s departure, two powerful groups that had previously called for him to step aside as Cabinet minister yesterday welcomed his resignation. They declared that his departure should signal the beginning, and not the end, of the establishment of systems to reduce the recurrence of corruption at agencies under his watch.

“We regard his resignation as appropriate, but belated. It should have happened some time ago. It vindicates the tradition recently established and sustained by successive administrations to have ministers either resign or tender their resignations in a context such as we have in relation to Petrojam,” Professor Trevor Munroe, head of National Integrity Action (NIA), told The Gleaner.

President of the Private Sector Organisation of Jamaica (PSOJ), Howard Mitchell, also expressed the view that Wheatley’s resignation was welcomed, albeit too late.

Mitchell said that Wheatley’s resignation would now clear the way for a proper investigation to be conducted into the agencies under the energy portfolio.

“This is not the end; it is the beginning, and it should be used as an example of a point of departure for the wider society for us to understand that we cannot build a nation, we cannot have the development that we so badly need, and the growth, without all of us living by the rules, not only the public sector,” Mitchell asserted.

He noted that the PSOJ was not picking on any political party, noting that over the years, the rules have been broken by respective administrations.

The PSOJ boss contended that the country could not achieve economic growth in the midst of corruption, adding that they were inimical to each other. On June 28, the NIA had issued a statement indicating that the principle of individual ministerial responsibility, which is part of Jamaica’s Constitution, as well as code of conduct for ministers, required that Wheatley either tender his resignation or the prime minister ask him to resign.

The NIA said that had Wheatley not resigned, this would have ruptured the tradition of individual ministerial responsibility.

In a release yesterday the People’s National Party (PNP) said it also welcomes “the long overdue removal of Dr Andrew Wheatley from the Cabinet of Jamaica”. However, it has sounded a note of caution that his resignation would not be the end of the matter.

It says the criminal investigations by the Major Organised Crime and Anti-Corruption Agency, the Financial Investigations Division, the auditor general and Integrity Commission into the activities at Petrojam and National Energy Solutions Limited must be pursued to their final conclusions “and let the chips fall where they may”.

The PNP said that the prime minister has a duty to ensure that these agencies receive the necessary resources to complete their investigations and provide their reports in a timely manner to the people of Jamaica.

***

10MW LNG Power Plant for The Nest

(Jamaica Gleaner, Steven Jackson, 27.Jul.2018) – A tripartite deal is in the works for the development of a power plant at CB Group’s expansive property and future home called The Nest, that is meant to supply all the poultry company’s energy needs.

The disclosures so far indicate that Jamaica Public Service Company Limited, JPS, will develop and own the 10MW power plant that will be fuelled by liquefied natural gas (LNG), while New Fortress Energy will develop the LNG infrastructure and supply gas for the plant.

The energy project is referenced in a newly released environmental study on the proposed development of The Nest at Hill Run, St Catherine, which was published on planning authority NEPA’s website.

CB’s Corporate Affairs Manager, Dr Keith Amiel, said the power plant would make The Nest self-sufficient. CB and most of its satellite and subsidiary operations are expected to move into The Nest in 18 months.

“Anything remaining would be sold back to power the grid,” Amiel said on Wednesday.

The financing of the project was not disclosed, but the EIA for The Nest makes clear that JPS and New Fortress would have to develop their own environmental study for the power project – suggesting that the bulk of the investment may be coming from those two entities.

New Fortress, which has developed and is developing LNG supply infrastructure for several corporate entities, including JPS, typically fully finances and owns the gas infrastructure for such projects.

“US-based NFE will deliver LNG to the JPS 10MW distributed generation facility, located at the CB Hill Run facility, in order to provide the fuel required to operate electric power-generation units,” said the EIA report for The Nest. “NFE will provide all the infrastructure required to complete the LNG system and the distribution of natural gas project successfully, including storage tanks and regas/processing system.”

The project will include two storage tanks of more than 18,000 gallons in size, but the exact specifications are to be determined. The facility would be designed to store gas for five days, but will accept daily deliveries of 19,000 gallons trucked from New Fortress’ Montego Bay facility.

“They estimate 17.8 truck deliveries per week,” the report noted.

The Financial Gleaner awaits JPS’ promised response on its plans to develop the power plant.

CB’s poultry-processing plant at The Nest is an energy-intensive operation designed to process roughly 100,000 birds per nine-hour shift.

Development of The Nest 100, which spans acres at Hill Run, will proceed in phases over seven years. CB Group is investing $15 billion in the facility.

***

Petrotrin Board, Union Disagree to Agree

(Trinidad and Tobago Newsday, Carla Bridglal, 26.Jul.2018) – The board of Petrotrin has outlined a plan to reorganise and restructure the state oil company in a bid to make it more competitive and become a viable asset to the people of Trinidad and Tobago. The unions, including the most vocal majority Oilfield Workers’ Trade Union (OWTU) agree that this is the best strategy to move the company into a sustainable future. Yet nearly four months after the board started the restructuring process, and three months after both parties signed a memorandum of agreement that this is the path they must take, together, the process has reached a stalemate. It’s a strange stasis — both parties agree on the fundamental challenges and solutions, but neither is willing to concede to the other in an effort to get the ball rolling on a mutually beneficial outcome.

Petrotrin's board and union disagree to agree

The union believes the board is reneging on its promise to meet with them. The board insists that the union has not adequately put forward a plan to discuss. The union insists it wants the company divided into four subsets, each with a division head to oversee operations — land exploration, marine exploration, refining and marketing, and the hospital. The board has already split the company into two — upstream (exploration and production) and downstream (refining and marketing). And as far as they are concerned, the union is squabbling over superficial nomenclature. The union, for its part, believes the board lacks the proper expertise to run an oil company.

The board still appears to be going ahead with its 18-month turnaround plan, but if it is to make any material changes to things like staffing, for example, it will need union buy-in.

And while it doesn’t seem like the Board and the union have made any inroads recently, at least for a formal meeting, there was a clash of the titans of sorts, when chairman of Petrotrin, Wilfred Espinet, and OWTU president general Ancel Roget agreed to sit on a panel moderated by journalist and director of the Lloyd Best Institute, Sunity Maharaj last Wednesday, in front of a packed auditorium, filled mostly with a boisterous union crowd, at the Government Campus Plaza Auditorium in Port of Spain.

“Let me make it abundantly clear what they (the unions) are trying to do is make noise of things that are not really important. The important thing is to make the company viable. It has to be competitive and to do that it has to focus on operations as a clear part of the strategy,” Espinet said.

It’s the Board’s mandate to restructure the company so it can become profitable and sustainable, he said. Petrotrin needs to operate like an international company, and think beyond TT oil, he said. Oil is a commodity and to be able to keep operating, the company needs to be able to sell that oil.

The refinery at Petrotrin has a capacity of 140,000 barrels of oil per day (bopd); the company produces about 42,000 bopd — a shortfall of about 100,000 bopd, which must then be imported.

The OWTU agrees. In fact, one of Roget’s major points was that the company needed to be more efficient in hiring skilled personnel to operate and manage the company’s exploration and production activities. There are some sectors, like human resources that are overstaffed, he said, while several technical sections, like marine have several vacancies; the refinery alone has over 100 vacancies for operators, he said. If wages are a significant part of the company’s expenses, it’s only because the shortage of experienced staff meant people had to pull double and even triple shifts.

“We have an overburdened top management structure; the structure we have proposed does not carry all of that ‘fat’ of management because it is not necessary. What is necessary is a management that is focused and accountable,” Roget said.

Time is of the essence, he said, especially if the company is to take advantage of rising commodity prices, and the OWTU wants to begin a process that will move the company forward, with competent management void of politics.

Both men stubbornly stuck to their message, and sometimes tiresome rhetoric. Espinet reiterated the mandate of the Board to go ahead with the reorder regardless, and Roget made veiled threats of “taking a particular course of action to force them to do what they need to do.”

Yet despite the similarities of their arguments, both parties still can’t seem to agree, much to the bemusement of observers like the third panelist, energy consultant Anthony Paul.

“It’s remarkable to me how much convergence I’m hearing and yet we are focusing on the divergence,” Paul said. So while the OWTU and the Board could both agree that governance structures and efficiency in production need to be improved, the one thing that seems to be missing from the equation is a shift in culture. “We know the challenges of getting the right people and competencies; putting in place systems of governance and management for operations. There may be disagreement with numbers and those are easy to fix. But there’s an elephant in the room that is not being addressed yet and I’ll put it out there. It’s about culture. An organisation needs a culture to guide the way they behave and their ethics,” he said, adding that both parties needed to listen to and learn from each other. Petrotrin was facing a precipice, he said, and neither party would fare well if the company went over and for that not to happen, things need to change.

***

Atlantic Empowers Employees for Process Safety

(Trinidad and Tobago Newsday, Carla Bridglal, 26.Jul.2018) – Atlantic CEO Dr Philip Mshelbila and BP’s vice president Group Process Safety Central Rob DiValerio have highlighted the central role of employees in the systems that protect natural gas plants from leaks and other failures.

The two headlined the recently concluded seventh annual Process Safety Week, hosted by LNG production company, Atlantic, for its employees and service providers at its Point Fortin liquefaction facility.

Atlantic CEO Dr. Philip Mshelbila addresses employees at Atlantic’s 7th annual Process Safety Week. Source: Trinidad and Tobago Newsday

Process Safety is a framework used by LNG facilities and process plant operations to manage the systems that prevent leaks, spills, equipment malfunction, extreme temperatures, corrosion and metal fatigue, which all have the potential to cause hazardous incidents. In the industry, incidents related to these systems are described as process safety incidents.

At the launch of the event Dr Mshelbila and DiValerio shared some of their personal experiences in managing the tragic outcomes of Process Safety incidents in Nigeria and USA respectively.

“One of the biggest dangers to process safety is complacency due to familiarity,” Dr Mshelbila said. “We cannot rely on luck to be our barrier. We have to live Process Safety if we are going to manage it as the way in which we operate. It cannot be something we switch on and off. Our key objective is that we perform at our best and recognise the accountability and responsibility for process safety that comes with each of our roles. Every person has to participate – teamwork is the only way to succeed.”

DiValerio highlighted the importance of barrier management, the practice of continuously evaluating and enhancing the systems that protect natural gas plants from leaks.

“Incidents should not be seen as an interruption but as an opportunity to learn,” DiValerio said. “The key factor in ensuring Process Safety performance is simply identifying the barriers used to mitigate the routes of loss of containment (of hazardous materials) and understanding how robust they are.”

Established in 2012, Atlantic’s Process Safety Week features lectures, presentations and booth displays, all aimed at deepening employee and service provider knowledge of process safety at Atlantic and in the wider industry. This year’s theme was Enhancing Process Safety Performance. Over three days, 27 sessions were held, featuring presenters representing Atlantic, Shell, BP, NGC, Worley Parsons, Massy Wood Group and Lloyd’s Register. Sessions were also held for night shift personnel, as part of Atlantic’s commitment to expose all employees to industry best practices in Process Safety.

***

Colombia Could Create New Oil Bid System

Orlando Velandia, head of Colombia’s National Hydrocarbons Agency (ANH), speaks to Reuters in Bogota, Colombia July 23, 2018. REUTERS/Carlos Julio Martinez

(Reuters, Luis Jaime Acosta, 24.Jul.2018) – Colombia is preparing changes to its bidding process for oil areas in an effort to increase investment and find new reserves, the head of the oil regulator said, after repeated cancellations of its latest oil round.

The changes, including contracts adjusted to international crude price fluctuations and the chance for companies to propose exploration on land not yet on offer, will help attract spending and nearly double reserves to at least 10 years of consumption, Orlando Velandia of the National Hydrocarbons Agency (ANH) said.

“We’re looking to improve conditions for the country, to achieve competitiveness and motivate companies to make proposals about areas,” Velandia said in an interview on Monday.

The ANH in April postponed the deadline to receive offers for 15 onshore areas at its Sinu-San Jacinto auction until the second half of the year. It was the sixth time the round was delayed.

Colombia is the third Latin American country hosting oil auctions this year, after Mexico and Brazil. Its bidding round comes after a four-year pause when low oil prices stopped many Latin American countries from offering acreage.

Colombia has been awarding blocks to the highest bidder every two to three years, but bidding in the new system will privilege the first company that requests access to additional areas, Velandia said, likely improving the offers of other bidders.

“Once we evaluate the areas and they’re added to the map, companies can make offers in a continual competitive process,” Velandia said. Companies would no longer be required to outline planned investments or compensate the government if spending falls short, he added.

Colombia could offer at least 20 onshore and offshore Caribbean blocks with the changes, Velandia said.

Companies having problems with social protests or delays in environmental licensing could be offered alternative areas, he said.

Protests, along with pipeline bombings, are a major headache. State-run Ecopetrol lost some $100 million earlier this year because of blockades.

The country has 1.78 billion barrels of reserves, equivalent to about 5.7 years of consumption. Colombia produces about 860,000 barrels per day (bpd) of crude, half for export.

The proposed changes must be approved by the ANH’s directive counsel, which includes the ministers of energy and finance.

Changes not approved before Aug. 7 will go to the government of President-elect Ivan Duque, who has promised tax cuts, investment in Ecopetrol’s refineries and a crackdown on attacks by rebel groups.

Reporting by Luis Jaime Acosta; Writing by Julia Symmes Cobb; Editing by Helen Murphy and Richard Chang

***

PetroTrin Achieves $85.6 Mln Profit

(Trinidad Guardian, 19.Jul.2018) – Petrotrin chairman Wilfred Espinet said cost reduction initiatives undertaken by the interim executive team installed at the energy company resulted in a second quarter profit after tax of $85.6 million.

“The installation of a new executive team from the beginning of March and the implementation of the strategies developed together with experts’ advice produced noticeable results in reducing cost and cutting waste,” he said.

“The mandate given to the board, to make Petrotrin a sustainable profitable entity, through proper governance and management of a competitive business, is planned in three phases: Survive, Thrive and Grow.

For the past three months, the focus was on the first phase, “Survive”. Discretionary spending that was not adding tangible benefits to the operations was reduced and we concentrated on cutting waste.”

Espinet said results for the period ended June 30 followed a loss of $517.5 million for the quarter ended March 31.

Recently published results showed a decrease in the state owned company’s operating costs of $92.4 million when compared to the same quarter last year and a decrease of $41.9 million when compared to the quarter ending March 31.

In addition, Petrotrin earned $18 billion in revenue for the nine months ending June 30 —a 21.2 per cent increase with the corresponding period in 2017, which Espinet was due to higher oil prices.

He said in a statement accompanying the financial results: “Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) increased to $1,767.4 million, or 80 per cent more than the 2017 result for the comparable period. Despite the enhanced operating results, the Group incurred a loss before tax of $242.8 million which translated to a loss after tax of $500.7 million,” the chairman said.

Petrotrin’s asset base decreased to $31.6 billion compared with $37.4 billion for the corresponding period in 2017.

Espinet explained: “This was primarily because of the write down of our fixed asset balance for an impaired asset and the reclassification of previously capitalised borrowing cost on the ULSD project to expense.

Total debt to equity and current ratios as at June 30, 2018, were 3.49 and 0.52 respectively, compared to ratios of 1.07 and 0.41 as at June 30, 2017.

“Shareholder’s equity of $3.3 billion as at June 30, 2018, represented a decrease of 69.73 per cent when compared with the period ending June 30, 2017.”

The chairman said Petrotrin is embarking on the next phase of its restructuring programme, Thrive, where the focus will be on “designing the organization built for purpose around its operational units.”

He added: “As we embark on this phase, we will consult with all stakeholders to garner support for what is undoubtedly a monumental exercise that will have a profound impact on all the citizenry of Trinidad and Tobago.

“The board is encouraged by the level of support and extraordinary efforts from employees and is committed to finding a sustainable solution that is equitable to all stakeholders.”

***

Barbados to Establish New Renewable Energy Regime

(Barbados Today, Marlon Madden, 17.Jul.2018) – Within another month producers of electricity from renewable energy sources should have an idea of the new rate they will be paid for selling power to the Barbados Light & Power (BL&P) under the Renewable Energy Rider (RER) programme.

This promise has come from Minister of Energy and Water Resources Wilfred Abrahams, who said his Barbados Labour Party (BLP) administration was “embarking on several initiatives”, including a review of the Barbados Electric Light and Power Act and the National Energy Policy 2017 – 2037 in order to facilitate a more efficient licensing process.

Addressing a one-day high level roundtable meeting on the renewable energy industry at the 3W’s Pavilion at the University of the West Indies (UWI), Cave Hill Campus on Monday, Abrahams said a review of the framework was necessary if the country were to achieve its target of 100 per cent renewable energy usage by 2030.

“We cannot have a situation where there are still temporary rates for renewable energy. In this regard, I expect to, within the next month, take a paper to Cabinet to commence the process to have permanent rates for grid-tied renewable energy systems,” Abrahams said.

“With the permanent rates for all grid-tied renewable energy systems there will be a clear implementation plan for achieving our 2030 target. That is our promise. In this regard I have requested the technocrats, as a matter of urgency, to produce a revised national energy policy, which will clearly show the targets for 2030,” he said.

Exactly two years ago, the Fair Trading Commission (FTC) set a temporary rate for the power being sold to the national grid under the RER programme at $0.416/kWh for solar photovoltaic and $0.315/kWh for wind “until such time as a permanent rate may be established”.

At the time, the FTC said the decision was taken to increase the capacity limit to 500 kW from 150 kW.

Abrahams did not go into detail about other likely changes to the legislation, but insisted that any change would bring about greater clarity and make way for more timely decisions.

He said focus would also be placed on energy efficiency and energy storage, acknowledging that while Government had control over policies all stakeholders were required to work closely together to help bring about the requisite change for the sector.

Abrahams insisted that the inclusion of local investors was critical to the restructuring process of the sector, pointing out that Government would be pursing a policy that would ensure that “all Barbadians are treated as investors”.

Businessman and renewable energy investor Ralph Bizzy Williams immediately welcomed the decision of a permanent tariff for power sold to the BL&P, saying while he did not know what the permanent rate would be, he was certain the industry would “take off” once the decision was made.

He also agreed that Barbadians should have majority ownership of the renewable energy sector here.

“As far as I am concerned the sun that shines on Barbados belongs to Bajans and we should be harvesting it, not foreigners. I love foreigners, I welcome anybody here, but for goodness sakes we are in the sun belt of the world and this is our moment,” said Williams, who pointed to his company’s green energy bond was gobbled up once introduced several months ago.

He also agreed that Barbados would save millions in oil imports through the expansion of the sector, as it would no longer be “subjected to the varying prices of oil” over which it had no control.

***

Venezuela Claims It Plans To Raise Oil Production

(OilPrice.com, Tsvetana Paraskova, 17.Jul.2018) – Venezuela’s Oil Minister Manuel Quevedo has discussed plans with state-held oil company PDVSA to raise the country’s crude oil production in the second half of the year.

While Venezuela and its struggling oil firm claim that they are revising their production planning in order to increase the country’s oil production capacity and make this year a year of “consolidation and stabilization”, basically no one else thinks or claims that Venezuela could soon be able to reverse its steep production decline which sees it losing more than 40,000 bpd of crude oil production every month for several months now.

According to OPEC’s secondary sources in the latest Monthly Oil Market Report, Venezuela’s crude oil production dropped in June by 47,500 bpd from May, to average 1.340 million bpd last month. This compares with an average of 2.154 million bpd in 2016, and an average of 1.911 million bpd in 2017. Venezuela, for its part, has been self-reporting to OPEC much higher production figures, with the June production reported at 1.531 million bpd.

Amid plummeting crude oil production, PDVSA is said to have failed to honor its supply obligations in early June, and has started to refine imported crude oil.

The plunging oil production is nearing the psychological threshold of just 1 million bpd as early as this year, analysts and industry experts say, and don’t see how production can be restored after years of underinvestment and mismanagement.

On top of the lack of investment and an exodus of oil workers who don’t see the point of working for salaries that become worthless overnight due to the 13,860-percent hyperinflation, ConocoPhillips is looking to and is already seizing PDVSA assets in the Caribbean in a bid to enforce a court ruling that awarded the U.S. firm US$2 billion in compensation for the forced nationalization of company assets in Venezuela.

***

Why Is Venezuela Still Sending Subsidized Oil To Cuba?

(OilPrice.com, Haley Zaremba, 17.Jul.2018) – In the past, oil has accounted for 96 percent of Venezuela’s exports and over 40 percent of government revenues. Now, as the nation’s economy continues to crumble amid sanctions, political strife, and low oil prices, the Venezuela’s all-important oil production is plummeting. In fact, last month’s production was the lowest in 30 years at 1.5 million barrels a day. In desperation, the struggling administration has even begun to shut down production proactively as their terminal storage meets maximum capacity and the government faces major bottlenecks at storage facilities and ports.

As oil production and exports drop, the Venezuelan government has even less money to buy essentials like food, medicines, and other basic goods–a well-established crisis growing worse all the time. The International Monetary Fund (IMF) has said that the brutal economic crisis underway in Venezuela is one of the worst in modern history. The nation’s once powerful economy has plummeted 45 percent in the last five years, and the IMF projects that it will shrink 15 percent in 2018 alone. Out-of-control inflation rates will reach 13,800 percent.

However, in the middle of the chaos — a collapsing regime, widespread hunger, medical shortages — there is one holdover from the socialist platform that autocratic President Nicolas Maduro has refused to lapse on. Despite the crisis on his own soil, Maduro continues to grant generous oil subsidies to Cuba.

The small island nation, not without its own economic issues, has been dependent on cheap Venezuelan oil since the 1990s. After the fall of the Soviet Union, comrade Cuba was in economic shambles. It was at this point that they turned to Venezuela reduced-rate crude oil, in exchange for sending skilled laborers across the Caribbean.

Now, as Venezuela sinks deeper and deeper into an extreme economic depression, few could have predicted that they would still be making good on that decade-old agreement with Cuba–even the Cubans themselves have been scrambling for new sources of cheap crude. Last year Venezuela even cut off exports to Cuba for eight months, but then once again began sending shipments of light oil to Cuba and Curacao in March 2017 at a great cost to their own refineries, which are running at just a small fraction of their capacity thanks to lack of maintenance and drained funds.

Despite all this, amazingly, there was a reported shipment of 500,000 barrels of Venezuelan crude shipped to northwestern Cuba last week, sparking an uproar back at home. Venezuela continues to supply Cuba with around 55,00 barrels of oil per day, costing the nation around $1.2 billion per year, an unthinkable generosity when 9 million Venezuelans are reporting that they can only afford to eat once a day. This money could be channeled into turning around Venezuela’s own crisis, to curb inflation and import desperately needed medicines that can no longer be found on empty Venezuelan shelves.

There is a new, albeit small, ray of hope, however, for Venezuela’s ailing economy. On July 1st Mexico overwhelmingly elected a leftist president for the first time in decades. Andres Manuel Lopez Obrador, known locally as AMLO, pledged on the campaign trail to bring Mexico’s foreign policy back to a standard of non-intervention. This would mean walking back current neoliberal Mexican President Enrique Peña-Nieto’s efforts to build a regional alliance against Maduro and put pressure on him to ease up on his increasingly despotic tendencies.

Despite public outcry against Maduro’s continued financial support of Cuba as his own people without food and desperately needed medicines, the reality is that Cuba is one of Venezuela’s last remaining allies. Even if Mexico is no longer actively working against Maduro’s regime, they won’t be supporting it the way that Cuba has and continues to do. The sad truth is that Maduro has and likely will continue to put politics over people, and cheap oil will continue to flow out of the pockets of Venezuela and into the ports of Havana, which sit ready and waiting.

***

NGC loses SIS challenge in Privy Council

(Trinidad and Tobago Newsday, 16.Jul.2018) – State-owned National Gas Company has lost an appeal in its multi-million claim against Super Industrial Services (SIS) and another company as the Privy Council today dismissed an appeal in which it challenged a decision to strike out its lawsuit on the ground that it failed to meet strict timelines for civil cases set in the Civil Proceedings Rules (CPR).

In February last year, the Court of Appeal, in a majority ruling, agreed with SIS’ contention that the judge was not actively managing the case when NGC failed to adhere to the rules in its prosecution of its claim against SIS and RFRL to set a case management conference after the lawsuit was filed in December 2015, as required by the rules.

In its lawsuit, NGC sought an order to prevent the dissipation assets in the contract dispute over the controversial Beetham Water Treatment Plant.

NGC had also btained a freezing order up to $180 million against SIS’ assets and an injunction restraining RFRL from dealing with certain assets. The freezing order was granted pursuant to arbitration proceedings which are still ongoing.

The dispute between the parties started in 2015 after delays in the US$162,055,318.77 project, which was due to be completed on October 21, 2016.

The contract was eventually terminated on November 24, 2016, after SIS reportedly informed NGC it was unable to continue with the work.

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Guyana’s Doors Open for Caricom Investors

(CMC, 13.Jul.2018) – President David Granger has extended an invitation to Caricom member states to invest in the oil sector and other sectors of Guyana.

Speaking on the sidelines of the 39th Meeting of the Conference of Heads of Government of the Caribbean Community (Caricom) here recently, Granger said, “The vision that I have for the Caribbean Community is that all parts of the Caribbean must see this new resource as parts of the community, and they should be willing to share their expertise with us and they should be willing to invest in it. I would like to affirm that the doors of investment, the doors of infrastructure, the doors of information technology, the doors of innovation will be open to our colleagues in the Caribbean.”

The president also placed on record his Government’s willingness to collaborate with stakeholders in Trinidad and Tobago’s oil and gas industry as Guyana becomes a major oil producer with first oil expected in 2020.

“As you know, Guyana is still putting in place the legislative framework, the regulatory framework; we are looking to recruit skilled persons in that sector. It is still too soon to tell. I look forward to working with the Caribbean. Trinidad has a long-established oil and gas industry and I would feel that our Caribbean colleagues would be able to participate in everything that Guyana does — agriculture, timber, gold, diamond mining,” President Granger disclosed.

Following eight major oil finds, ExxonMobil is set to begin production in early 2020.

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EIA Publishes Updated Venezuela Country Report

(EIA, 21.Jun.2018) – Venezuela holds the largest oil reserves in the world, in large part because of the heavy oil reserves in the Orinoco Oil Basin. In addition to oil reserves, Venezuela has sizeable natural gas reserves, although the development of natural gas lags significantly behind that of oil, reported the US-based Energy Information Administration (EIA) in its updated Venezuela country report posted online. However, in the wake of political and economic instability in the country, crude oil production has dramatically decreased, reaching a multi-decades low in mid-2018.

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Jamaica Encouraged by 3D Oil, Gas Surveys

(Amsterdam News, Bert Wilkinson, 24.May.2018) – Jamaica is fancying its chances of becoming the latest Caribbean Community nation after Guyana to find commercial quantities of oil and gas in the wake of encouraging indications from the most recent round of offshore surveys.

Jamaican authorities said on the weekend that they were upbeat about the results of three dimension offshore surveys aimed at determining whether the northern Caribbean island nation will remain as a net importer rather than a producer of oil and gas.

The Petroleum Corporation of Jamaica said the 3D program run by Tullow Oil of the United Kingdom marked the first time that such high-tech surveys were done anywhere in island waters, and the signs are good for further investment.

“Tullow’s decision to do the 3D seismic survey shows that the data indicators are pointing in the right direction, and we hope that the results of the post-survey data analysis will prompt them to move forward to the next phase,” said Winston Watson, group general manager of the PCJ.

Encouraged by consistent seepages of live oil both on and offshore in Jamaica in recent months, Tullow and the PCJ decided to step up exploration and survey work, convinced that commercial quantities of both oil and gas lie below the seabed and on land in Jamaica.

Late last year, local fishermen pointed authorities to live oil on top of the water off Jamaica’s south coast. Initially, the seepage was dismissed as waste oil either from cruise or other commercial ships operating in or passing through Jamaican waters.

But the fishermen insisted that the oil was new, fresh and recurring, so authorities decided to take a second look, and Tullow unpacked its equipment and started work anew.

Weeks later, inland in northern Jamaica, locals also pointed officials to seepages. Experts investigating the seepages discovered that the two were a mere 47 miles apart, which suggests that there might be an active system underground.

The PCJ’s Watson said, “The 3D seismic survey, Jamaica’s first, is the most advanced oil-and-gas exploration study ever carried out in Jamaica, and its completion marks the steady progress of the exploration PSA the PCJ signed with Tullow in 2014.”

The study area, The Gleaner newspaper reported, covered 2,250 square kilometers, and the survey ran for 45 days.

Jamaica’s efforts to determine whether it has commercial quantities of oil and gas come amid a mad rush by Caribbean nations such as Guyana, Grenada, Barbados and Suriname and also the Bahamas to become oil producers.

U.S. giant ExxonMobil is preparing for a late 2019 or early 2020 production startup in Guyana. Grenada’s government in March said that recent surveys prove the island, close to oil and gas-rich Trinidad, has commercial quantities that will be developed in the coming years.

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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
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Venezuela Never Closed Its Doors on T&T Nationals: Lawmaker Says

(Energy Analytics Institute, Ian Silverman, 30.Apr.2018) – Venezuelan lawmaker José Brito wrote in a Twitter post that the OPEC country never closed its doors to the hundreds of Trinidadian nationals that left their twin-island nation to seek opportunities in Venezuela.

When Trinidad’s Prime Minister Keith Rowley says in regards to Venezuela immigration that Trinidad “will not convert itself into a refugee camp,” he needs to remember Venezuela never closed its door on Trinidadian immigrants, wrote Brito.
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Barbados: Energy Boost

(Barbados Today, Luova Labs, 20.Feb.2018) – Government’s spokesman on energy Senator Darcy Boyce has said that independent producers of renewable energy would likely be able to supply more energy to the national grid and have a fixed price for doing so in a matter of months.

In fact, Boyce, the Minister in the Prime Minister’s Office with Responsibility for Energy, said he expected to have something to report by the end of March, following a meeting with the Fair Trading Commission (FTC) in early March.

Addressing the launch of a US$34 million project at the Inter-American Development Bank offices in Christ Church, Boyce said he expected the Renewable Energy Rider (RER) limit to increase from the current 60 megawatts “to maybe 80 or 90 megawatts later on this year”.

This, he said, should result in “a good demand” as well as the issuance of more licences to power producers, including Barbados Light & Power Company, Government and individuals and businesses.

The RER, introduced in 2010, facilitates the sale of excess electricity to the grid by customers using a solar photovoltaic or wind renewable energy system to offset electricity consumption from the grid.

“I say later on this year because we have now a market study done on pricing for renewable energy and it is now being studied by the Division of Energy and a draft of the papers has been sent to me for review and that is now being amended in the Division of Energy.

“When that paper gets to Cabinet I will expect by the middle of next month then we will be in a position to go to the FTC and discuss the kinds of rates that we have envisioned to suggest for renewable energy of different types and different size installations. So we expect that we will have some decision on that before the end of March. That will then give certainty to those people, those large producers who want to go into renewable energy,” Boyce explained.

Renewable energy advocate Ralph Bizzy Williams, the owner of the Williams Solar company, has been one of the most vocal in calling for a fixed rate for energy being sold to the utility company by producers, as well as an increase in the amount that individuals are allowed to sell to the grid.

A temporary rate was set in July 2016.

The FTC had said then it would increase the capacity limit per individual to 500 kW from 150kW and set a temporary credit at $0.41/kWh for solar photovoltaic and $0.315/kWh for wind “until such time as a permanent rate may be established”.

Boyce yesterday implied that the capacity limit per individual would increase, while explaining that a permanent rate would be set and the total intermittent energy allowed to the grid would be increased.

Within the 60-megawatt capacity allocated to intermittent energy on the national grid, Boyce explained that there was still some space left to be taken up including an approximately 15-megawatts for power from Government owned corporations.

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The Caribbean Poised To Become Major Oil Region

(OilPrice.com, Haley Zaremba, 22.Aug.2017) – In the future, we may be hearing about the Caribbean a whole lot more when talking about oil and gas. Previously, the area was virtually off the map for the fossil fuels industry, despite its proximity to the vast oil reserves of Venezuela. Now, the Caribbean has suddenly become a point of interest since ExxonMobil discovered major reservoirs in nearby Guyana in 2015.

After their initial huge discovery of the Liza oil field 2 years ago, Exxonmobil also announced last month that they’ve discovered more oil in the Payara reservoir off the coast of Guyana, increasing the total discovery to approximately 500 million barrels. This is huge news for both Exxonmobil and for Guyana, which ranks among the poorest countries in the Western Hemisphere.

ExxonMobil (partnered with Hess Corp. and Statoil) has also recently purchased a new deepwater block for exploration off the coast of neighboring Suriname, another potentially oil-filled nation. Some in the industry are already referring to the Guyana-Suriname Basin as the next big oil region.

Now, those good fortunes could be spreading to the Caribbean as well. Trinidad and Tobago has long been the Caribbean’s largest oil and gas producer. The nation has depended economically on their petroleum reserves since the 1990s, with the energy sector currently comprising 34.9 percent of the country’s GDP. However, more recently the small island-nation’s production has been in decline as production from mature fields has waned and exploration for new fields has been slow in starting. Now, Trinidad and Tobago is hoping that the discoveries in nearby Guyana will bring more interest and investment to the Caribbean.

It’s looking like Trinidad and Tobago will get their wish. Just this month BP Trinidad and Tobago announced two major discoveries totaling approximately two trillion cubic feet (tcf) of gas, which the company’s president called “the start of a rejuvenated exploration program on the Trinidad shelf”.

Similarly encouraged by the massive discoveries in Guyana over the last few years and the foreign interest it has garnered, several other Caribbean nations are beginning to assert themselves as potentially oil-rich countries and attempting to woo foreign companies to start investing in exploration around their islands. One of the biggest examples of this is Jamaica, who have recently caught the attention of UK-based Tullow Oil.

Last week Tullow announced plans to return to offshore locations off the southern coast of Jamaica to explore a field of “live oil” that was brought to their attention by local fisherman earlier this year. The firm will ramp up their 3D seismic surveys this year in hopes that the floating oil will lead them to vast oil fields the likes of their neighbors to the south and the nearby Gulf of Mexico.

The Bahamas has also recently publicized their plans to invite international companies to drill in deep waters off the coast, pointing not only to Guyana and the Gulf, but also to neighboring Cuba’s oil reserves as an indication of what treasures may be laying under the surface of the sparkling Caribbean Sea.

Exploration of oil reserves in the Caribbean may also soon be ramped up and revolutionized by major technological advancements from Ursa Space Systems. The high-tech company has announced a planned expansion to take a global oil inventory, with the Caribbean as one of its first major surveyed regions. Ursa will use satellite imagery to provide reliable and independent weekly inventories of oil stocks down to the tank level for easy calculations and better insight on oil supply and demand, especially in areas of the world where there has previously not been readily-available data.

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Mariscal Sucre Has 600 MMcf/d Production Potential

(Piero Stewart, Energy Analytics Institute, 1.Feb.2017) – Venezuela’s Mariscal Sucre natural gas project offshore has a production potential of 600 million cubic feet per day.

The company plans to use this gas production to supply export markets in Colombia, Ecuador, Central America and the Caribbean, announced PDVSA in an official statement.

The fields associated with the Mariscal Sucre project, located in water depths between 328-427 feet (100-130 meters), are situated nearly 25 miles north of Venezuela’s Paria peninsula in Sucre state, according to Technip. PDVSA expects peak production from the four fields that comprise the Mariscal Sucre project: Mejillones, Rio Caribe, Dragon and Patao, will reach 1.2 billion cubic feet per day (Bcf/d) of natural gas and 28,000 barrels per day (b/d) of condensates. Production will be destined for export markets as well as the Venezuelan’s domestic market via the CIGMA gas plant located in Guiria in Sucre state, according to PDVSA.

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PetroCaribe Evaluates Creation of JV Company to Distribute Gas

(Energy Analytics Institute, Piero Stewart, 27.May.2016) — PetroCaribe member countries evaluated the creation of a joint-venture company that would distribute Venezuelan gas to them, reported Venezuela’s news agency AVN, citing PDVSA President Eulogio Del Pino.

“The proposal – after looking at the quantity of reserves that we have in the Caribbean – is that we will establish a network, just like and how President Chávez visualized the Great South American Gas Pipeline,” said Del Pino.

It is possible that PetroCaribe members will need to increase their participation in the project, added Del Pino, without providing financial or operational details.

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Venezuela, Trinidad Sign Energy-Related Deals

(Energy Analytics Institute, Pietro D. Pitts, 23.May.2016) – Venezuela’s President Nicolas Maduro and Trinidad and Tobago’s Prime Minister Keith Rowley were both present during an energy-related signing ceremony in Port of Spain between the two countries.

Trinidad’s Minister of Energy and Energy Industries Nicole Olivierre signed the agreements for her country while Venezuela’s Oil Minister Eulogio Del Pino signed on behalf of Venezuela, reported PDVSA in an official statement on its website.

The first agreement relates to a Functional and Governability Structure for the Loran-Manatee maritime gas field, including evaluation, development, exploitation, production and disposition of hydrocarbons.

The second agreement relates to a Memorandum of Understanding (MOU) between both countries revolved around technical and commercial studies related to the supply of Venezuelan natural gas located in the north and south eastern offshore platform regions of the OPEC member country to its Caribbean neighbor Trinidad and Tobago. The MOU also includes details related to the evaluation of a development feasibility study related to the interconnection of gas between Venezuela and Trinidad and Tobago.

During the meeting, Maduro also announced creation of a $50 million credit fund that would allow Venezuela to acquire foodstuff from Trinidad and Tobago.

Venezuela – the OPEC member country with the world’s largest crude oil and eighth largest natural gas reserves, according to the BP Statistical Review of World Energy – continues to reel in an economic crisis brought about by currency and price controls, widespread corruption and mismanagement of resources generated by its oil sector which produces 95 percent of the country’s dollar export earnings.

Besides bilateral issues, the countries also discussed matters related to drug and security issues, among others.

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MEO Australia Signs Deal for Cuba Block 9

(MEO Australia Ltd., 3.Sep.2015) – MEO Australia Limited executed the Cuba Block 9 Production Sharing Contract (PSC) with the national oil company Cuba Petroleo Union (CUPET) in a ceremony in Havana, Cuba.

The ceremony was attended by dignitaries including Juan Torres Naranjo, general director of CUPET and representatives of MEO, including Managing Director & CEO Peter Stickland. The execution of the Block 9 PSC represents the culmination of over 3-years of negotiations between MEO and CUPET and is MEO’s first entry into the Cuban oil and gas sector.

“As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector,” MEO reported, citing the company MD and CEO Peter Stickland. “The geology of the block has analogies to petroleum systems in which MEO’s technical personnel have significant experience, and we see substantial potential in Cuba overall and Block 9 in particular.”

The Block 9 PSC area is in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. Block 9 contains the Motembo field, the first oil field discovered in Cuba. The exploration period of the Block 9 PSC is split into 4 sub-periods totaling 8.5years with withdrawal options at the end of each sub-period. MEO will immediately commence work on the initial activity of evaluating the existing exploration data in the block and reprocessing selected 2D seismic data before determining whether to proceed with a subsequent 24-month exploration sub-period that includes acquisition of new 2D seismic data.

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Ecopetrol Announces Caribbean Deepwater Find

(Ecopetrol S.A., 28.Jul.2015) – Ecopetrol informs that at a depth of 3720 meters, the Kronos-1 well verified the presence of hydrocarbons in ultra-deepwater of Colombian south Caribbean area. This discovery proves the geological model proposed for an unexplored area with high hydrocarbon potential.

Kronos-1 is located in block Fuerte Sur, 53 kilometers (33 miles) offshore, where partners Anadarko, operator, and Ecopetrol, each hold 50% interest.

“This discovery adds to the one accomplished in December at the Orca-1 well, located in the deep water of Tayrona block offshore Guajira, where we are partners with Petrobras, Repsol and Statoil,” reported Ecopetrol, citing company president Juan Carlos Echeverry. “These results are very important and confirm the potential of the Colombian Caribbean petroleum system in a vast area and are aligned with Ecopetrol´s new strategy, in which one of the key areas is the exploration on high potential marine basins.”

According to operator’s quarterly operations report, after drilling at a water depth of 1,584 meters (5,195 ft), the well reached total depth of 3,720 meters (12,200 ft) and encountered a net pay thickness between 40 to 70 meters (130-230 ft) of gas bearing sandstones.

Ecopetrol and Anadarko’s integrated technical teams are continuing to evaluate the Kronos discovery results. Nowadays the drilling operation continues, aiming to reach a deeper target to determine possible additional results.

In 2012, the Ecopetrol – Anadarko partnership undertook exploration in the South Caribbean in blocks Fuerte Norte , Fuerte Sur , COL5, URA4 and Purple Angel.

Our partner, Anadarko, is one of the most recognized companies worldwide for its experience in deepwater and ultra-deepwater exploration, project management and execution. Currently Anadarko is executing the biggest seismic acquisition campaign in the history of the Colombian Caribbean with an extension of more than 16,000 square kilometers.

Once activities at Kronos-1 are concluded, the drillship Bolette Dolphin, employed in this operation, will move to Fuerte Norte Block to continue drilling Calasu-1 well, located 145 kilometers or approximately 100 miles north east of Kronos-1.

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Venezuela Opening Ops to Nicaragua, Caribbean

(Energy Analytics Institute, Piero Stewart, 9.Mar.2015) – “We are advancing with Nicaragua and opening up possibilities to the rest of the Caribbean,” said Venezuela’s Oil Minister Asdrubal Chavez on state television, referring to Nicaragua and other Petrocaribe member countries participating in activities in Venezuela’s Orinoco heavy oil belt or Faja.

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Maduro Says Caribbean Must be Together

(Energy Analytics Institute, Piero Stewart, 6.Mar.2015) – Venezuela’s President Nicolas Maduro says the Caribbean region has to always be together.

“Petrocaribe is our road of respect, solidarity, brotherhood, the union to march together. The Caribbean has to always be together,” said Maduro during a broadcast on Venezuelan state television.

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Honduras Awaits Initial PetroCaribe Shipments

(Energy Analytics Institute, Ian Silverman, 13.Sep.2013) – Honduras does not expect to receive its first shipment of oil from Venezuela under PetroCaribe until Dec.2013, reported El Universal, citing Honduras’ Vice Minister of Commerce Melvin Redondo.

Venezuela will not be ready to ship the oil as originally planned due to the technical problems at its refineries, the newspaper said.

Under the PetroCaribe Initiative, Honduras will pay 60% of the petroleum bill in cash and finance the remaining 40% over 25 years at interest rates not to exceed 2%.

PetroCaribe is comprised of Antigua y Barbuda, Bahamas, Belize, Cuba, Dominica, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Dominican Republic, Saint Cristobal and Nieves, Saint Vicente and Las Grenadines, Saint Lucia, Suriname and Venezuela.

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Q&A with Oil Outlook President Carl Larry

(Energy Analytics Institute, Pietro D. Pitts, 9.Aug.2013) – Oil Outlook President Carl Larry spoke with Energy Analytics Institute in a brief interview from Houston, Texas.

What follows are excerpts from the brief interview.

EAI: Are US refiners benefiting from PDVSA’s refinery problems in Venezuela?

Larry: We have seen production in the US in the last year picking up and we are seeing a lot of refinery runs, which have lifted exports which are at a record high.

Because of gasoline usage that we have seen in Venezuela, it has created an opportunity for US Gulf Coast refineries to pick up the slack to really push out more exports.

Additionally, we see a lot of the US Gulf Coast refineries bringing in a lot of heavy and medium crudes from either Venezuela or Saudi Arabia. The focus has shifted from bringing in lighter sweets, which we have done historically, to bringing in more medium to heavy grades (heavier sour grades). Further, we are seeing more being pulled out of Cushing and down into now the Gulf Coast.

There is an abundance of light sweet because of the shale programs, whether Eagle Ford in Texas or Bakken, and we are seeing a lot of that get pushed to the East Coast and the Mid-West.

We have seen a desperate need for sours and heavies ever since 2004-2005 when the refineries in the Gulf Coast were switching their slates to a heavier grade because of the cost differences.

Now we are experiencing a situation where it is cheaper to bring in light sweet in but the refineries are now geared up to bring in medium to heavy. We are seeing a lot more production but because of that we are seeing more pressure on the heavier sour grades.

Exports are key here. The longer we can keep those refineries up and running, it’s a good thing for the US refining system but at end of the day it is all about global demand and not so much US demand.

EAI: Could PDVSA be at a point whereby it is ready to divest of its CITGO Corp. refining operations in the US?

Larry: Venezuela is facing the same issues as a refiner as Saudi Arabia. There is not this demand in the US for product anymore and definitely not crude, so like Saudi Arabia there is race to get to Asia and especially China and get in front of them and sign longer term deals. So, the longer Venezuela deals with the US and the up and down demand here, the more time they are losing with bigger customers.

I can see why they would want to strengthen those ties before someone else stepped in. I could see PDVSA wanting to exit the US since there is not

really a big need here anymore for refineries or crude for that matter.

The focus for PDVSA and Venezuela should be the up and coming countries that will be demanding more oil, probably China and maybe Japan as well.

EAI: What companies would you put on a short list as being interested in the CITGO refineries?

Larry: I think ExxonMobil is a name that will come to the forefront, but Chevron Corp. might be another one that might be looking to expand. With significant exposure in Latin America, the refineries could be a natural fit for Chevron if there is an opportunity to expand.

EAI: Do you see a market for PDVSA’s Caribbean refineries?

Larry: It all depends on global demand. The Caribbean refineries are looking for a lot more global demand to make their margins profitable. The US is no longer relying on the Caribbean to give it the product, the demand is now going in the opposite direction. So, PDVSA’s refineries and others in the Caribbean become more global macro-sensitive than they have been in the past.

Editor’s Note:

PDVSA’s 100% controlled US subsidiary CITGO Corp. owns outright three refineries with combined processing capacity of 749,000 b/d. PDVSA also has a 50% interest in two additional refineries with a combined processing capacity of 679,000 b/d, according to PDVSA’s 2012 annual report.

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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.

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