Dominican Republic aims to drive activity

The Dominican Republic, which has launched its first licensing round in decades, is the very definition of a frontier province. It hopes that attractive entry terms will spur exploration activity. Setting the barriers for entry low, as well as renewed exploration interest in the region, will bring in players keen to get drilling.

Blocks in first oil licensing round

The first oil and gas licensing round will be a success if Dominican Republic awards more than two of the 14 blocks on offer this year at an event disclosing the fiscal terms.

The licensing round with disclosure of contract terms comes after Brazil, Guyana and Mexico won billions of dollars in oil investment. Jamaica, Cuba and Panama are luring producers with new areas and seismic exploration data .

Dominican Republic offers simple terms that provide low risk and low cost of entry for operators willing to commit to minimum investment, said Alberto Reyes, vice minister of hydrocarbons. Licensing terms include a minimum investment of $2 million for onshore blocks and $4 million for offshore blocks. Bidders can propose their own geographic blocks in the next two months if they reject original areas.

The country is providing geological and geophysical exploration data for 7 basins on offer. Schlumberger created a database of hydrocarbon potential from maps, figures, oil wells, seismic profiles and over 18,000 km of 2-D seismic data. First awards are expected to be released by late November.

The Caribbean Sea, with frontier opportunities, good potential and business environment is attracting wider notice with commercial discoveries and competitive investment terms. U.S. and European oil companies expressed interest in bidding. Repsol SA, Total, CNOOC Ltd, Noble Energy Inc and Exxon Mobil Corp signed up to attend the launch.

From the response, Reyes was sure of awarding more than two blocks. “There is reasonable interest in the Caribbean and we’re right in the middle of the Caribbean Sea, our basins are facing Colombia and Venezuela,” with significant oil production. Dominican Republic expects to gain investment as a low-cost, business-friendly country with flexible contracts. “We have a stable economy, a lot of infrastructure including eight airports and.. the second-biggest natural gas demand in the region.”

Wood Mackenzie, which worked with the Dominican Republic on its licensing round, said massive Exxon discoveries offshore Guyana have put the spotlight on oil in the Caribbean. Energy exploration is one way to boost the economy. “Countries just want to develop their hydrocarbons resources and attract investments to improve their economic development.”

 Reuters- G/ McWilliams, M. Parraga, M. Lewis, B.Baum)

 

Jamaica, Guyana Finalists For Award

Washington-based financial institution Inter-American Development Bank says projects in Jamaica, Guyana , Paraguay, Argentina, Honduras, Panama, Ecuador and Colombia. are finalists for the second edition of its Superheroes of Development Award.

The Jamaica project is titled “Mainstreaming Integrated Water Resource Management in Small Island Developing States.” The Guyana project is called “Small Changes delivering Big Results”.

“The award is part of an effort to improve the performance of IDB-financed projects through systematic learning and knowledge sharing . It recognises “the innovative solutions devised and valuable lessons learned by executing agencies, while implementing development projects in Latin America and the Caribbean.”

The bank received 82 submissions for the contest from projects in its 26 borrowing member countries and in all areas of development. Eight finalists were selected by a panel of internal and external development experts from every sub-region in Latin America and the Caribbean, based on the following criteria: pertinence of the execution challenge described; innovation; impact of the solution; and relevance of the knowledge that can be shared with other projects.

These innovations will be showcased during its “Knowledge Week”, in Washington, in September, when the winning team will be announced. “The IDB will share these stories throughout Latin America and the Caribbean, so they may contribute to ongoing projects, as well as to the preparation of new operations.”

Colombia

Frontera Energy awarded VIM-22 and Llanos-99 blocks
Frontera Energy announced the award of the VIM-22 block in addition to LLA-99 block which was previously announced on June 27, 2019 under the successful Agencia Nacional de Hidrocarburos (‘ANH’) bid round. Definitive award documentation will be entered into later.

Block VIM-22 is adjacent to and on trend with the Company’s Guama block in the Lower Magdalena Valley region of Colombia. The Company identified multiple play types on the existing 3D seismic on the block and existing infrastructure on the Guama block would reduce time from exploration success to commercial production. The Company identified prospects targeting oil, natural gas and natural gas liquids with plans to start the environmental permitting process as soon as practicable for the first exploration well, targeted to be drilled in 2021. Under the terms of the award the Company is committed to undertaking a 50 km2 3D seismic survey and drill three exploration wells over the next three years.

Llanos-99 block is on trend with fields producing medium to light oil from the C-5 and C-7 zones within the Carbonera formation as part of the prolific Llanos basin. The Company has preliminarily identified two prospective locations on the block with plans to start the environmental permitting process for the required 3D seismic program as soon as practicable with the goal of an exploration well to be drilled in 2021. Under the terms of the award the Company is committed to undertaking a 61 km2 3D seismic survey and one exploration well in the next three years.

Richard Herbert, Chief Executive Officer, commented:

‘We are very pleased with the results of the first ANH bid round in 2019 having secured the largest onshore block, of those awarded, in terms of acreage that is near existing infrastructure in a very prolific but underdeveloped region in Colombia with VIM-22. This strategic acreage sits in close proximity to our existing natural gas production and infrastructure on the La Creciente block and in close proximity to our exploration projects on the VIM-1 and Guama blocks. The Llanos-99 block is a typical medium and light oil block in the Llanos basin, which is the core area of Frontera’s portfolio and where we have had a significant amount of exploration success in the past. Frontera looks forward to the next bid round by the ANH that is expected to commence in August 2019.’

Source: Frontera Energy

Gran Tierra Energy operations update

Gran Tierra Energy announced an operations update. Production amounts are unaudited and on an average working interest before royalties (‘WI’) basis unless otherwise indicated.
Key Highlights

• Southern Putumayo Blockades Lifted – Production Restored: Gran Tierra has been able to restore oil production from both the Suroriente and PUT-7 Blocks, which is currently approximately 4,500 barrels of oil per day equivalent (“BOEPD”)
• Acordionero Commissioning On-Track: The commissioning of the expansion of Acordionero’s central processing and water injection facilities, as well as the installation of gas-to-power turbines (“Acordionero Projects”), are progressing as planned with first oil flowing through the new additional processing equipment on July 3, 2019; the remaining water treatment and power systems are scheduled to be commissioned by July 15, 2019, which is expected to allow a rapid increase in water injection in the Acordionero field up to 40,000 barrels of water injected per day (“bwipd”) in August 2019
• Acordionero Near-Term Drilling Targeting Lisama E Sand: The Company is currently drilling the AC-48 development oil well, which is targeting the Lisama E Sand (currently no reserves assigned to this sand) which, if successful, would add reserves and production; if the E Sands are not productive, the well would be completed in the Lisama A
• Total Company Production: Current production is approximately 34,500 BOEPD, an increase of 5,500 BOEPD from the previously reported average level of 29,000 BOEPD (5-day average during June 13 to 17, 2019); 4,500 BOEPD of this increase is attributable to the Company bringing the Suroriente and PUT-7 Blocks fully back on-line; for second quarter 2019, Gran Tierra’s average production was approximately 35,550 BOEPD
• Planned Update to Guidance: Gran Tierra expects to update its guidance with its second quarter 2019 results press release, which is scheduled to be issued before market open on August 8, 2019; by that time the Company expects to have fully assessed the startup of the Acordionero Projects
• 3D Seismic Update: The planned 341 square kilometer (“km”) 3D seismic shoot has been operating across the Alea-1848A, the Nancy-Burdine-Maxine, PUT-4, and PUT-25 Blocks; the program is over 80% surveyed on the ground and shot-recording has been initiated; the program is scheduled to finish recording in August 2019, with a processed 3D volume expected to be interpreted in September 2019
• ANH Bid Round Awards: Gran Tierra has won two blocks in the recent Agencia Nacional de Hidrocarburos (“ANH”) bid round in Colombia, the LLA-85 Block in the Llanos Basin and the VMM-24 Block in the Middle Magdalena Valley (“MMV”) Basin; the Company believes these blocks may be highly prospective
• Exploration Drilling: during the second half of 2019, Gran Tierra plans to drill one exploration well in the PUT-1 Block (100% WI) and to participate in the drilling of one exploration well in the LLA-10 Block (50% WI)
• HSE Update: Surpassed over 7.7 million person-hours without a lost time incident
  Gary Guidry, President and Chief Executive Officer, commented:

‘We are very pleased that the Colombian national government has successfully negotiated an end to the blockades in the southern Putumayo. Gran Tierra continues to seek additional ways to amplify our business benefits for the people near our operations. Through our operations, local hiring policies and social programs, we are providing legal, economic and entrepreneurship opportunities. Gran Tierra has also been awarded four ‘Work for Taxes’ projects by the Colombian government. Through this program, the Company plans to develop infrastructure projects for communities that will be credited against our future tax liabilities. With our ongoing commissioning of the Acordionero water injection and gas-to-power projects, recent development drilling, as well as the lifting of the blockades which were affecting the southern Putumayo producing fields, we expect to restore the Company’s production back to over 40,000 BOEPD. Bringing our southern Putumayo production fully back on-line has been an important first step in this forecasted production increase. The next crucial step to get production back on track is the expected positive oil rate response at Acordionero due to our planned major ramp-up in water injection in August 2019.’

Canacol Energy

Positive results from Lower Magdalena Valley

Canacol Energy provided results of the Ocarina 1 exploration well on its 100% operated VIM 5 block and flow testing results of the Nelson 7 development well located on its 100% operated Esperanza block, both situated in the Lower Magdalena Valley Basin .
Ocarina 1 Well Tests 30 MMscfpd

As announced in June 2019, the Acordeon 1 exploration well encountered a significant gas accumulation in the Cienaga de Oro (‘CDO’) sandstone reservoir which tested at a final rate of 33 million standard cubic feet per day (‘MMscfpd’). The Ocarina 1 well tested the accumulation at a bottom hole location situated approx. 1 km to the south east of the Acordeon 1 well and has encountered a thick section of gas pay within the same CDO sandstone reservoir, thus confirming a significant new accumulation of gas within the CDO.

Using the Pioneer 53 drilling rig, the Ocarina 1 well was spud on June 10, 2019 and reached a total depth of 8,751 feet measured depth in 15 days. The well encountered 530 feet of gross gas pay between 6,384 and 6,914 feet true vertical depth (“ft TVD”) with average porosity of 23% within the primary CDO sandstone reservoir target. An interval between 6,444 and 6,457 ft TVD was production tested at multiple rates for a 32 hour period. This interval flowed at a final rate of 30.4 MMscfpd at a flowing tubing head pressure of 913 psi and a choke of 82/64 inch. The average flow rate for the entire period was 16 MMscfpd.

The well will be tied into the Jobo production facility via the Pandereta flow line and brought onto permanent production by the end of July 2019.

 

Nelson 7 Development Well Tests 29 MMscfpd

The Nelson 7 development well was spud on April 1, 2019 and reached a total depth of 9,300 feet measured depth on April 21, 2019. The CDO reservoir was perforated over a 107 foot interval and was production tested at multiple rates over a 23 hour period. The interval flowed at a final rate of 29 MMscfpd at a flowing tubing head pressure of 770 psi and a choke of 85/64 inch. The average flow rate for the entire period was 15 MMscfpd.

Forward Drilling Update

The Pioneer 53 drilling rig is currently being mobilized to spud the Pandereta 5 appraisal well which will test the western extension of the Pandereta field located on the VIM 5 block which the Corporation discovered in late 2017.

The appraisal well will test the same CDO reservoir currently producing from all of the wells in the Pandereta field. A successful result at Pandereta 5 could result in a material increase of the Pandereta field conventional natural gas total proved plus probable (“2P”) reserves.

As of December 31, 2018, Pandereta field’s 2P reserves were 100 billion cubic feet as per the Corporation’s independent reserves auditors. The Corporation anticipates spudding the Pandereta 5 well prior to the end of July 2019. The well will take approx. 5 weeks to drill, complete and test.

Source: Canacol Energy

OBG Report

The Report: Colombia 2019

Our 2019 report on Colombia economy is now available

The report explores:

• The new administration’s latest policies and its impact on private sector investment, with comments from Iván Duque, President of Colombia; Alberto Carrasquilla; Minister of Finance and Flavia Santoro Trujillo, President of ProColombia.
• Colombia’s quest to diversify and strengthen its energy mix by re-affirming its expertise in hydrocarbons while pushing forward with renewable energy development, with comments from María Fernanda Suárez, Minister of Energy and Mining, and Astrid Álvarez, President of Grupo Energía de Bogotá (GEB).
• How Colombia can increase the productivity of its industrial sector, with comments from José Manuel Restrepo, Minister of Commerce, Industry and Tourism.
  Colombia’s focus on creative industries, through its Orange Economy initiative.
• The challenges Colombia’s urban transport is currently facing, with comments from Ángela María Orozco Gómez, Minister of Transport.
• The report also features interviews with key business leaders and policy-makers along with in-depth sector by sector analysis on the economy of Colombia.

Colombian President: Venezuela Harbors, Funds Guerrillas

BOGOTA – President Ivan Duque said that the National Liberation Army (ELN) guerrilla group is recruiting minors in Venezuela and has the backing of leftist incumbent Nicolas Maduro, who also supports dissident elements of a former rebel army – the Revolutionary Armed Forces of Colombia (FARC) – that signed a peace deal three years ago with Colombia’s previous government and has transformed itself into a leftist political party. 462 social leaders have been killed during these years of “post-conflict.” .

You’ve received a lot of criticism over the implementation of the peace agreement. And last week, during the UN Security Council’s visit, the FARC said that your discourse is divorced from the facts. What’s really happening?

“The Security Council,.. an independent body, was able to see how we’re advancing in what for me is very important, and that’s helping people who are in the reincorporation process be successful, people who have genuinely abandoned violence and are on a path to legality. The Security Council became aware of our productive projects, became aware of the settlements that improve quality of life, became aware of Works for Taxes, became aware of the Development Programs with a Territorial Approach, which show that we’re committed to making this reincorporation work.”

Regarding the killings of social leaders and former FARC combatants, the Attorney General’s Office says progress has been made in investigating and solving those crimes, but the problem remains worrying both inside and outside Colombia. Is your government able to stop the wave of killings?

“When I became president, we’d had more than 200 recent murders and launched an Action Plan. Thus far this year, we’ve seen a reduction that may exceed 30 percent, according to reports from the (presidential) human rights counselor, … based on United Nations information. Now, that phenomenon occurs in a very small group of municipalities that have been under the sway of illegal armed groups, .. involved in coca-growing or illegal mining and attack those leaders because the leaders want to get their communities out of those illicit economies. We’re committed to ending these actions and being relentless in bringing the criminals behind these killings to justice, just as we did, for example, when we presented a “most wanted” list of 34 heads of criminal organizations responsible for the killings of social leaders, around 18 of whom have already been captured.”

Talks with the ELN are currently on hold, and there are signs that the ELN is strengthening.

“The ELN has a situation and that’s that in Venezuela, Nicolas Maduro, the dictator…, is protecting them. He’s giving them money and sponsoring their efforts to recruit children to work in illegal mining in parts of Venezuela. And .., the ELN’s leaders are in Venezuela and protected by Maduro. Alias “Pablito” is there. Another leader, “Antonio Garcia,” is there. They also have groups of recruiters there, and many of the criminal attacks .. in border areas are planned in Venezuela. I’ve been clear with the ELN. The ELN can’t continue their criminal activities and expect that it will be able to discuss peace with this government. We looked at what happened under the previous government in 17 months of talks, and we found that in those 17 months 432 terrorist acts, more than 116 killings and more than 12 kidnappings were carried out.
The ELN is a terrorist group, and that’s why it’s on the European Union’s list and the United States’ list.”

Is that situation you’re describing with the ELN in Venezuela also occurring with FARC dissidents?

“Of course. Because they all end up being the same thing. That dictator in Venezuela is protecting not only the ELN .., but also those dissident leaders of the FARC. It’s no secret .. that that’s happening, and that “Ivan Marquez”… and “El Paisa”… and “Romaña” (are) in Venezuela. And it’d be no surprise if “Santrich” were there. All indications are that he’s there under the protection of the Venezuelan dictatorship. That shows that they’re looking to sponsor a sort of union of criminal clans to perpetrate violent actions in Colombia.”

In other words, the solution to the persistent problem of armed conflict in Colombia also depends on a change in government in Venezuela?

“That would be a great help because the dictatorship in Venezuela – first .. of the era of Hugo Chavez and later Maduro’s dictatorship – has been a sponsor of illegal armed groups in its territory. They harbored the FARC, as well as the ELN, and supported them at the time. Today, they’re doing the same with the (FARC) dissidents and with the ELN.“

You’ve stressed that for the first time in seven years there’s been a reduction, albeit small, in illicit crop cultivation. Are you satisfied with that result?

“The issue is not whether it’s small or big. The issue is that for the first time in seven years the exponential growth was halted, and there’s merit in that.
Of course, we want to reduce it much more, and that’s why we have to seek out a combination of tools because those drugs fuel the violence. Those drugs feed criminal groups that attack social leaders. Those drugs also lead to chemicals being dumped in our country’s tropical rainforest and incentivize deforestation.“

President Donald Trump has criticized your administration in recent months. How is the relationship with the United States?

“We’ve seen that the White House has recognized our administration’s efforts in the fight against drugs. Secretary of State Mike Pompeo has said that, the anti-drug czar (Jim Carroll) has said that, as did President Trump recently. I think the evidence is what’s important. Colombia is a country that’s exemplary in the fight against drugs. We don’t do it to please anyone, but because it’s our conviction. And for every ton of drugs that the US seizes in its territory, we’re seizing 18. That’s why the relationship between the US and Colombia is one of cooperation, of joint responsibility, and Colombia now is able to account for more than 50 percent of the drug seizures made in the Western Hemisphere.”

Amerisur Resources announces strategic review including formal sale process

Amerisur Resources, the oil and gas producer and explorer focused on South America, has announced that, following the receipt of interest in the Company and its assets from other industry participants, and in light of the high level of recent activity in the Colombian E&P sector, it has decided to conduct a formal review of the various strategic options available to the Company to maximise value for shareholders.
These options include, but are not limited to, the potential sale of the Company through the commencement of a ‘formal sales process’ as set out by The City Code on Takeovers and Mergers or the farm-out or sale of one or more of the Company’s assets.

The Company confirms that, at the time of this announcement, it has received a non-binding proposal regarding a potential sale of the Company and various other indicative proposals regarding the sale of certain assets of the Company.

The Board appointed BMO Capital Markets as its financial adviser with regards to the formal sales process and as independent financial adviser for the purposes of Rule 3 of the Code. Stifel Nicolaus Europe has been appointed as joint financial advisor to the Company.

Parties with a possible interest in making a proposal should contact BMO Capital Markets.

Source: Amerisur Resources

Amerisur Resources receives possible offer from Maurel & Prom

Amerisur Resources noted the announcement by Maurel & Prom regarding a possible offer for the whole of the issued share capital of Amerisur at a price of 12.5 pence per share in cash and 4.5 pence per share in Maurel & Prom shares.
Following the approach from Maurel & Prom concerning its Possible Offer and the receipt of other interest in the Company, the Board concluded that the Maurel & Prom Possible Offer materially undervalued the Company and was not at a level, nor in a form, that merited further consideration.

On 19 July 2019, the Company announced that it has commenced a strategic review, including a Formal Sales Process as set out by The City Code on Takeovers and Mergers. Immediately following the announcement, through a conversation between our respective advisors, Maurel & Prom was invited to participate in this process and, as set out in their press release, has agreed to do so. The Board welcomes Maurel & Prom’s participation in the competitive Formal Sales Process.

The Board confirmed that a number of conversations have taken place since the announcement of the competitive Formal Sales Process with counterparties who have expressed their interest in participating and it is confident that a competitive process involving several of these potential counterparties can be completed to the benefit of all shareholders. The Board will therefore consider any future proposal by Maurel & Prom in the context of the ongoing competitive Formal Sales Process. Shareholders are strongly advised to take no action in respect of the Possible Offer.

Amerisur said: ‘The purpose of the competitive Formal Sale Process we launched on Friday is to maximise value for shareholders. As well as the offer from Maurel & Prom, we have had a number of additional expressions of interest in the Company.’

The Takeover Panel granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified (subject to note 3 to Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code, for so long as it is participating in the formal sale process.

Any further updates regarding the competitive Formal Sales Process will be announced as appropriate.

This announcement has been made without the prior consent of Maurel & Prom. There can be no certainty that any firm offer for the Company will be made nor as to the terms on which any firm offer might be made.

Source: Amerisur Resources

Maurel & Prom makes possible offer for Amerisur Resources

Oil and gas company Maurel & Prom made a possible offer worth about £210 million for UK peer Amerisur Resources, which could help the French exploration group boost its range of assets in Latin America.
Maurel & Prom said its possible offer was priced at 17 pence per share for Amerisur, whose shares closed at 16.52 pence on Friday. The offer would comprise 12.5 pence as cash and new shares in Maurel & Prom worth 4.5 pence each.

See Amerisur Resources announcement: Amerisur Resources receives possible offer from Maurel & Prom

Source: Reuters via Yahoo! Finance

Amerisur Resources update on operations

Highlights

• • High impact Indico-2 appraisal well next on Block CPO-5, following Sol discovery
    CPO-5 (WI 30%): Sol-1 Exploration Well Update
  • Testing operations on the Sol-1 exploration well are complete. As previously announced, the well was drilled to a final depth of 9,986ft. Following initial analysis, 26.5ft net oil pay in the top of the LS3 sands and 10.5ft net oil pay in the LS1 sands of the Une formation were identified, based on logging and MDT samples.
  • An interval of 9 feet in the LS3 sands was perforated to perform a short-term test (STT). The well was initially tested under natural flow then closed and completed with an electrical submersible pump producing at a rate of 253 BOPD of 38.9 API oil with a water cut of 5%.
  • Following rig demobilisation and adjustment of facilities Sol-1 will continue producing under STT in order to evaluate the application to ANH to begin a long term test on the well.
  • The CPO-5 drilling program continues with the Indico-2 appraisal well, once the rig arrives from the Sol location. The Indico field was discovered in December 2018 where the Indico-1 discovery well found 283 feet gross, 209 feet net oil column in the LS3 sands and no indication of an Oil-Water-Contact (OWC). The objective of Indico-2 includes increasing production and to test the extent of the OWC to better define field reserves (22.7 MMBO 2P gross reserves announced 22 January 2019 based on independent analysis by McDaniels and Associates).

Platanillo (WI 100%): Production Optimisation

The company recently completed the sidetrack of the Platanillo-22 well which is now on production.

Production Update: Average Group WI Production around 5,537 BOPD to end June

Year to date production to the end of June 2019 averaged around 5,537 BOPD. FY19 production guidance remains 5,000 – 6,000 BOPD and does not include any contribution from exploration drilling.

John Wardle, CEO said:

‘As anticipated, the Sol-1 test results reflect a modest discovery. We now look forward to drilling the Indico-2 appraisal well that has the potential to transform Indico reserves as it tests the extent of the oil-water-contact’.

Source: Amerisur Resources

Panama

IMF Staff Concludes Visit

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
A staff team of the International Monetary Fund (IMF), led by Alejandro Santos, visited Panama during July 17-23, 2019, invited by the Panamanian authorities. At the end of the visit Mr. Santos issued the following statement:

“While Panama remains among the most dynamic economies in Latin America, the economic recovery has been slower than anticipated. Real GDP grew at an annual rate of 3.1 percent in the first quarter of 2019 (compared to 4 percent in the same period of last year), due to a softening in construction and services. More recent data point to a continuation of a sluggish recovery, leading us to revise down our growth projection for 2019 to 5 percent (from 6 percent estimated in our February visit). Panama’s fundamentals remain solid, with the economy expected to recover and converge to its potential growth of 5½ percent by next year, and inflation edging up to 2 percent over the medium-term. The banking system remains well-capitalized and liquid with low non-performing loans. The external position will continue strengthening over the medium term. The balance of risks to the outlook is tilted to the downside, related to fears of rising trade protectionism, weaker global outlook, and potential pressure on banks’ correspondent relations.

“Preliminary data indicate a decline in fiscal revenues and an acceleration in the implementation of budgetary spending, leading to a fiscal deficit in the first half of the year above the 2 percent of GDP limit established by the fiscal rule for the whole year. In addition, sizable arrears accumulated to suppliers and banks which need to be cleared. The authorities estimate that in the absence of corrective measures, the fiscal deficit could reach almost 4 percent of GDP in 2019. The authorities are committed to corrective measures but fear that a rapid pace of implementation could weaken the ongoing recovery further. Against that background, the authorities expect to reduce the fiscal deficit by over 2 percent of GDP in the next two years, allowing them to observe the deficit limit under the fiscal responsibility law of 1¾ percent of GDP by 2021.

“In June 2019, the Financial Action Task Force (FATF) placed Panama on the list of countries with strategic deficiencies on its anti-money laundering framework. Despite recent progress on financial integrity, including the recognition of tax evasion as a predicate offense to money laundering, the legal framework needs to be further strengthened and its effectiveness needs to be demonstrated. The authorities are fully committed to implementing the recommendations of the action plan agreed with the FATF and aim to be out of this list as soon as it is possible. Sustained efforts to enhance the anti-money laundering framework and tax transparency will be crucial to strengthen Panama’s position as a regional financial center.

“Sustaining inclusive growth over the medium term will require reinforcing the structural reform agenda, especially in education, social security and public health services. Further improvements in fiscal revenues and stricter expenditure controls will be required to improve macroeconomic management, create the necessary fiscal space to cover the cost of future reforms, and strengthen fiscal discipline. We encourage the authorities to upgrade the statistical framework to facilitate sound economic decision making at all levels of government.”

The mission is grateful to the authorities for their kind hospitality, excellent cooperation and open discussions.

IMF Communications Department
PRESS OFFICER: MARIA CANDIA ROMANO
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

Cuba

Melbana seeks share of oil field offshore

Melbana Energy

Melbana Energy is pursuing a binding incremental oil recovery (IOR) production-sharing contract with Cuba’s state oil company, CUPET. This would give Melbana a long-term right to further develop and share in any enhanced production from the Santa Cruz oil field offshore the country’s north coast.

The IOR PSC would likely be split into multiple phases, with an initial study period of up to eight months followed by an implementation phase which would include a minimum of two side track wells drilled from existing wellbores to new geological targets.

The Santa Cruz oil field is in between the Boca de Jaruco and Canasí oil fields and 150 km (93 mi) west of Melbana’s onshore block 9. It was discovered in 2004 when drilled via a deviated well from shore out to the offshore structure. Initial test flow rate was 1,250 b/d, with oil quality varying from 10° API to 22° API. Santa Cruz is thought to hold up to 100 MMbbl of recoverable and to extend across an area of more than 20 sq km (7.7 sq mi). By 2012 production was around 1,600 b/d, with 7.4 MMbbl from 18 wells.

Melbana seeks Cuba Block 9 licence extension to complete farmout

Block 9

• Negotiations progressing with potential partners, including an international oil company with Cuban experience
• Application made for a minimum one year extension to the current drilling commitment

Santa Cruz

• Commercial negotiations on IOR contract advancing

Block 9 PSC

Melbana Energy continues to progress discussions with potential farminees to Block 9 with the objective of securing funding for a minimum two well drilling program in 2020 to test the world class oil exploration potential of Block 9.

To ensure there is sufficient time to complete a satisfactory farmout and drilling preparations, Melbana has applied to CubaPetroleo for a minimum 12 month extension to the second sub-period of the Block 9 production sharing contract (‘PSC’) which currently finishes on 3 November 2019. The second sub-period has a minimum work program including the completion of a gravity study and the drilling of one exploration well. Melbana has completed the gravity study component of the work program. With respect tothe Block 9 guarantee obligation, CubaPetroleo has previously provided a waiver of the obligation until 30 April 2019. A further extension of the waiver to the end of the applied extension to the sub period has been applied for.

Santa Cruz

The approval process for the Incremental Oil Recovery PSC, which was agreed between Melbana and CubaPetroleo in late 2018, has identified some issues that require further commercial clarification. Negotiation of these matters between Melbana and the relevant Cuban parties has commenced. The Santa Cruz field commenced production in 2006 and was reported to initially estimated to have up to 100 million barrels of recoverable oil. Melbana has completed an initial assessment of Santa Cruz, which has identified a number of promising opportunities to enhance production from the Santa Cruz oil field.

Source: Melbana Energy

Vessels sail under the radar to ship Venezuelan crude to Cuba

By LUCIA KASSAI AND BEN BARTENSTEIN on 7/11/2019

(Bloomberg) — Stopping the flow of Venezuelan oil to its ally Cuba might prove harder than the U.S. expected.
Tankers are being renamed and vessels switch off transponders to sail under the radar of the U.S. government. Ocean Elegance, an oil tanker that delivered Venezuelan crude to Cuba for the past three years, was renamed Oceano after being sanctioned in May. S-Trotter, on the sanctions list, is now known as Tropic Sea.

The oil tanker Nedas, after being sanctioned in April, made a delivery to Cuba incognito because it turned off its satellite tracking system. It went unaccounted for 42 days, but shipping reports show that it delivered oil to Cuba. After the ghost delivery, it discreetly changed its name to Esperanza. The Nedas/Esperanza delivered 2 MMbbl of crude to Cuba this year.

Halting the flow between the two countries may prove difficult. There are over 4,500 crude oil tankers in operation globally, and state oil giant Petroleos de Venezuela SA also uses oil products vessels, adding to the complexity of the task. Nevertheless, the U.S. continues to target shipments between the two countries and aims to close loopholes in sanctions. The goal is to surgically and methodically cut off funds to the regime of President Nicolas Maduro.

“The United States will continue to target entities involved in shipping oil between the two countries (Venezuela and Cuba) and aims to further cut off Maduro and his cronies’ access to funds derived from oil sales to Cuba,” National Security Council spokesman Garrett Marquis said by email. “Those who circumvent sanctions do so at their own risk.”

The Treasury Department sanctioned Cubametales, the state-run Cuban oil and metals importer, because the Havana-based company is importing Venezuelan crude and Cuba, in return, “continues to provide support, including defense, intelligence and security assistance, to the illegitimate regime of former President Nicolas Maduro.” .

Cuba imports Venezuelan crude for its refineries and fuel oil to run its power plants and generate electricity. The supply of Venezuelan oil was agreed on a handshake between former presidents Hugo Chavez and Fidel Castro and later memorialized in contract. Shipments to Cuba peaked at 103,000 bpd in 2009 and have been dwindling over the years, according to PDVSA. Volumes slumped to 35,177 bpd in the first half of 2019, amid lower production and sanctions.

Cuban Companies Plan Legal Action against ExxonMobil Claims

Conglomerate CIMEX and Union Cuba Petroleo (CUPET) plan to fight the claims filed against them by oil supermajor ExxonMobil Corp. in the US courts.

The companies “have taken the formal steps, via their attorneys, to defend themselves in a federal court in the District of Columbia (USA),” Cubadebate website reported, adding that “this is not the first time, nor is it unusual, that Cuban entities have had to defend their interests in the US judicial system.”

On May 3, ExxonMobil, the largest oil company in the United States, filed a $280 million lawsuit against CIMEX and CUPET over properties expropriated by the Cuban government following the 1959 revolution. CIMEX, a unit of state-owned conglomerate GAESA, operates a chain of stores, cafeterias and shopping centers, while CUPET is the state-owned monopoly that controls the energy industry.

In April, the Trump administration said it would invoke a measure for the first time that allows lawsuits against foreign companies operating on properties seized from Americans following the 1959 revolution in Cuba.

The LIBERTAD Act, or Helms-Burton Act, was enacted in 1996 and Title III of the law allows plaintiffs to sue both foreign and Cuban companies making money off properties confiscated after the 1959 Cuban Revolution in US courts.

Implementation of Title III was suspended every six months by the administrations of Bill Clinton, George W. Bush and Barack Obama.
President Trump did the same in his first two years in office, but in January he suspended Title III for only 45 days and then for only 30 days, a term that expired on April 17.
Cuban state-owned companies had defended themselves in US courts “on more than 40 occasions” since 1960 and “have won favorable verdicts in several cases.”

Irving, Texas-based ExxonMobil said in its lawsuit that CIMEX and CUPET had profited off its properties, seized by the communist government.
“CIMEX and CUPET have generated revenues, obtained profits and realized other benefits from these activities. (Exxon) has not authorized CIMEX or CUPET to refine crude oil using (its) confiscated Property, nor has (it) authorized them to produce, transport, make available for sale, or otherwise engage in any commercial activity involving any petroleum products that are or have been produced using (Exxon’s) confiscated propert.”

Cuban entities, according to a US State Department estimate, could face up to 200,000 potential lawsuits in the wake of the Trump administration’s policy shift.

US Immigrants from Asia, Africa and Caribbean

US Border Patrol sources confirmed that Migrants From Asia, Africa And The Caribbean Are Crossing The Border Between Mexico And The United States.

Central America and Mexico continue to lead the flow, but the US is the largest recipient of migrants from Asia, Africa, Cuba and Haiti, according to a study by the International Organization for Migration, the UN agency.

Over 1,000 Haitians were arrested in Texas since June 10, compared to 17 arrested before that date during this fiscal year. An increase in the illegal entry of Haitians represents new challenges.

On the same dates, officers detained over 500 Africans in different groups after crossing the Rio Grande river with children.

The figure is more than double the total of 211 Africans detained along the 3,200 km (2,000 miles) of the US-Mexico border during 2018.

Border Patrol in Arizona arrested migrants from 40 different countries in the 2019 fiscal year, including Africa, Asia and others in family units and alone. Most arrests are of Guatemalas traveling as a family.

Many families have lived in Chile and other South American countries for several years before leaving for the US.

Most of the new immigrants, like the Haitians do not come from their country of origin, but from Brazil or Venezuela. Africans and Asians do not necessarily come from their place of birth but from other countries that welcomed them.

More diversity in the origin of migrants is due to the changing needs in their birthplace and the way information is disseminated on social networks.

“In the past, they migrated for economic reasons, due to unemployment and poverty. Recent , immigrants are fleeing violence in Mexico and Central America. Now other ethnic groups have different needs and are encouraged by the news of political asylum.“

Migrants from Congo, Cameroon, Angola, Eritrea and Ethiopia seek asylum in the US at Piedras Negras in Mexico, which borders Eagle Pass in Texas.

Like Latin Americans, Africans have little chance of obtaining political asylum. On average, only 13 percent of those who apply are accepted.
A Honduran who spent a week in a detention center in, Arizona was held with Cubans, Africans and Indians.

The Cubans were deported quickly.

Transcript of Press Conference for Regional Economic Outlook for Latin America and the Caribbean

Alejandro Werner, Director, Western Hemisphere Department

Maria Candia Romano, Press Officer, Communications Department (moderator)

MS. CANDIA: Buenos días, bienvenidos a todos a la prensa. El Fondo Monetario Internacional sobre la actualización de las perspectivas económicas para América Latina y el Caribe se encuentra el director del Departamento del Hemisferio Occidental Alejandro Werner. Alejandro dará una breve introducción y luego responderemos a sus preguntas aquí en la sala y también para aquellos colegas que nos están haciendo online.

MR. WERNER: Muchas gracias María y básicamente la reunión de hoy es para actualizarlos y responder preguntas sobre nuestras perspectivas para la región siguiendo la actualización de las proyecciones globales que la semana pasada diera a conocer el economista jefe del Fondo Guita Gopinath, en la cual se revisaron a la baja las perspectivas de crecimiento para la economía mundial a 3.2 por ciento en 2019 y con una recuperación del crecimiento global a 3.5 para el año entrante. En ese contexto también dio a conocer que las perspectivas de crecimiento para América Latina y el Caribe se revisaron a la baja a 0.6 por ciento para 2019 y esperamos que la región acelere su crecimiento a una tasa de 2.3 por ciento en el 2020. ¿Qué explica la revisión a la baja y la revisión tan profunda que se hizo sobre el crecimiento de América Latina? Hubo factores transitorios como cuestiones climáticas como los problemas con la mina en Brasil a principio del año. También hubo obviamente efectos no despreciables de las tensiones comerciales a nivel global y la desaceleración de la economía mundial y precios de los commodities más bajos, así como factores idiosincráticos importantes asociados a incertidumbres de políticas en el caso de Brasil y en el caso de México que fueron las dos revisiones más importantes. En el caso de Argentina hubo una revisión muy muy pequeña en el crecimiento esperado para 2019 que realmente dentro de los errores estadísticos nos daría prácticamente el equipo está considerando entonces que la economía se está comportando en línea con lo que se había anticipado hace algunos meses. En términos de políticas públicas, la región sigue presentando digamos retos importantes en el ámbito fiscal y en ese sentido creemos que el balance entre la consolidación fiscal necesaria para seguir manteniendo acceso al financiamiento en condiciones favorables y por otro lado, el no generar efectos negativos sobre la demanda agregada importantes se debe mantener digamos el patrón de consolidación que ya se había anunciado en cada uno de los países. Pero por otro lado en la parte monetaria dado los cambios que se han dado en las condiciones financieras internacionales y la evolución favorable en varios países de la región con respecto a los precios y a la inflación, pues básicamente hacia adelante abren en términos de posibilidades tal vez un mayor espacio en la parte monetaria para que las condiciones monetarias continúen apoyando el crecimiento de la demanda agregada por un período de tiempo más prolongado. Para concluir nada más tal vez repasar con ustedes de nuevo el crecimiento esperado que tenemos para los países o para las economías más importantes de la región. Estamos esperando que la economía argentina se contraiga 1.3 por ciento este año y recupere su crecimiento pleno en el año 2020. Hay que decir que dentro de este menos 1.3 por ciento esto incorpora la caída en el PIB que se dio en el primer trimestre, pero en términos secuenciales esto quiere decir trimestre a trimestre, estamos esperando que la economía crezca a partir del segundo trimestre y continúe con crecimientos positivos trimestre a trimestre en los siguientes dos trimestres. El caso de Brasil estamos anticipando un crecimiento de 0.8 por ciento y también con una recuperación a 2.4 el año entrante. Chile creciendo a 3.2 por ciento este año, Colombia 3.4 este año México 0.9 Perú 3.7 y el caso de Venezuela revisamos también al alza la contracción esperada. Antes esperábamos una contracción de 25 por ciento y estamos esperando una contracción de 35 por ciento este año.

La economía venezolana básicamente a raíz de un mayor colapso de la producción petrolera durante los primeros seis meses del año que esperemos continúe. No vemos ninguna señal por la cual anticipar que la producción petrolera en Venezuela pueda experimentar una recuperación en ese sentido. No vemos ninguna fuerza que explique por qué la economía podría comportarse un poco menos mal en la segunda mitad del año que en la primera y ahí revisamos a la baja nuestro crecimiento esperado al menos 35 por ciento y esto nos da pues básicamente que la región sin Venezuela estaría creciendo al 1.3 por ciento y con Venezuela el promedio de la región como dije al comenzar la conferencia de prensa es de 0.6 por ciento. Obviamente esto refleja los grandes retos que tiene la región para establecer un proceso de crecimiento sostenible que logre abatir digamos los rezagos sociales y que en la región converja de manera rápida a los niveles de vida de los países más desarrollados y obviamente en la agenda de reforma estructural, de la agenda digamos de profundización de cambios que incrementen la productividad y la inversión en la región, sigue siendo crucial para poder poner en marcha un proceso de este tipo.

MS. CANDIA: Gracias a Alejandro comenzamos con algunas preguntas.

SPEAKER: El FMI ha rebajado las últimas revisiones varias veces las previsiones para América Latina ahora es un 0,6. ¿Qué cerca está que caiga la región en recesión a final de año si se dan una serie de efectos negativos como un agravamiento de las tensiones comerciales con Estados Unidos y China? Y segunda pregunta esta semana se reúne la Reserva Federal y podrían rebajar los tipos de interés sería la primera rebaja en Estados Unidos en casi una década. ¿Qué opina EL FMI? ¿considera que es apropiado esta decisión de bajar el precio del dinero en Estados Unidos?

WERNER: La primera claramente al tener un pronóstico de 0.6 por ciento en el crecimiento esperado para la región y probablemente como lo dijimos en la conferencia de prensa de la semana pasada, el balance de riesgos está sesgado a la baja para la economía mundial, pues claramente Extrapolando esto a la región entonces es más probable que se dé en el futuro una revisión a la baja que al alza por el sesgo a la baja que tienen nuestras perspectivas de la economía mundial. De ahí que podamos ver una revisión tan alta, tan grande, en lo que serían las reuniones anuales para que este número se vuelva negativo e interpretando tu pregunta como que el crecimiento sea negativo dos trimestres seguidos sino que el promedio de crecimiento anual en la región sea negativo., reo que sería una revisión demasiado grande sobre todo dándose en los últimos dos trimestres del año porque ya tenemos una parte muy importante de la evolución económica que nos está dando el 0.6 por ciento de crecimiento que son datos observados. Entonces yo contestaría que la probabilidad no es tan alta pero la probabilidad de que la revisión sea. Es más alta la probabilidad de que la revisión sea a la baja que al alza en nuestra próxima actualización debido también al balance de riesgos que vemos en la economía global.

Con respecto a la rebaja de tasas como dijo nuestro managing director en funciones hace unas semanas, claramente la evolución de la inflación en Estados Unidos y los riesgos de la economía mundial, nos llevan digamos a opinar que el cambio gradual que ha habido en la posición de la Reserva Federal a ser más prudente primero hace ya varios meses con respecto a su proceso de normalización de tasas y más recientemente abrir la puerta a la posibilidad de alguna reducción de tasas de interés en el futuro, creemos que es correcto dado como dije anteriormente la evolución de la inflación que ha sido muy positiva en Estados Unidos en los últimos años y en los últimos meses y que los temores digamos de una aceleración de la inflación claramente no se han materializado, y por otro lado, la debilidad que se ve en la economía mundial y la desaceleración también que se está viendo en la economía de Estados Unidos. Entonces, como dijo David Lipton el otro día, consideramos que este cambio de sesgo en el tono de la política monetaria en Estados Unidos que se puede interpretar como abrirles la posibilidad a reducciones de tasas de interés en las próximas reuniones de la Fed, lo vemos como un cambio que básicamente responde de manera lógica a los riesgos en la economía mundial y la evolución favorable de la inflación en Estados Unidos.

SPEAKER: quería preguntarle por el recorte de las previsiones en el caso de la Argentina que pasaron de 2,2 para el año que viene a 1,1 y qué factores están viendo como para hacer esa nueva medición.

WERNER: Con respecto a Argentina una cosa que no mencioné el hecho que la proyección para 2019 se mantenga prácticamente constante en un contexto en el cual la economía o el crecimiento esperado para Brasil lo hemos revisado de manera importante a la baja, creo que apunta a que en el margen tal vez la economía argentina está un poquito menos débil de lo que habíamos anticipado porque al final del día el empuje que habíamos anticipado que podía venir por el lado de exportaciones etcétera a Brasil se está dando digamos con menor intensidad. Sin embargo, como tú bien dices revisamos a la baja de manera significativa las proyecciones para el 2020 y esto responde según lo decimos en el blog y lo ha dicho el equipo y está en el staff report que se publicó recientemente, responde en medida importante a que la reducción de la inflación que habíamos anticipado no se ha materializado a la fecha. Se ha materializado una reducción muy importante de la inflación desde abril a la fecha, pero digamos desde una perspectiva anual anticipábamos una reducción muy importante de la inflación en 2019 que ahora no estamos anticipando que se de en tal magnitud. En ese sentido, digamos en lo que es la lucha y el combate a la inflación en 2020, todavía queda una parte importante para realizarse, lo cual implica que las tasas de interés van reales van a ser más altas en 2020 de lo que habíamos anticipado anteriormente y este efecto es el que está explicando en gran medida la revisión del crecimiento esperado para 2020 y yo te diría que esa es la principal razón, un poco que gran parte de la lucha en la reducción de la inflación que habíamos anticipado se den 2019 se ha postergada al 2020, lo cual implica tasas de interés un poco o un poco más altas y yo también diría que la trayectoria de crecimiento de la economía brasilera aún en un contexto en el cual esperamos en Brasil un 2020 con un crecimiento mayor a 2 por ciento. El hecho que en 2019 Brasil esté tan débil también va a limitar digamos el efecto positivo que el dinamismo de la economía brasilera pudiese tener sobre Argentina, porque en el que en el pronóstico anterior con la economía brasileña que ya hubiese estado creciendo de manera saludable en 2019, los efectos sobre inversión etc. en la Argentina orientada digamos al mercado brasilero se van a retrasar y en ese sentido eso también está impactando el pronóstico de 2020.

SPEAKER: Alejandro Buen día. El fondo ha hecho un poco más de hincapié en el último informe que escribió sobre la Argentina y vos también en tu comentario respecto de la necesidad de implementar reformas estructurales, que un debate que está un poco instalado en la Argentina en la campaña presidencial. Vos te reuniste hace poco con el candidato opositor Alberto Fernández. ¿Crees que existe consenso en la Argentina respecto a la urgencia y de la secuencia de las reformas estructurales que hay que implementar?

Mr. Werner: Yo creo que existe en Argentina un convencimiento de que para que Argentina acelere su crecimiento de manera sostenible hay que profundizar el proceso de cambio estructural de la economía y creo que como en todo país, hay visiones diferentes de dónde poner el énfasis en este cambio estructural. Y un poco después de hablar con los candidatos opositores en la Argentina, un poco me llevé esta impresión, de que claramente hay una visión en cada uno de los candidatos y del Gobierno de que el gobierno siguiente tiene que comenzar con fijar una agenda de transformación económica muy importante para poder restablecer un proceso de aceleramiento de la inversión, de creación de empleos y de estímulo a la oferta digamos por ese lado, y como dije y como pasa en todo el mundo cada oferta política claramente pone énfasis en diferentes componentes de la agenda. Es prematuro para mí digamos hacer comentarios sobre cuáles serían los diferentes énfasis, están en la prensa y nosotros tenemos que conocer más de cuáles serían los sectores, los cambios etcétera más importantes para cada una de las fórmulas electorales. Obviamente conocemos mucho mejor el programa que seguiría el presidente Macri por el trabajo que hemos realizado con ellos en los últimos tres años, pero sobre todo en el último año y tenemos que seguir entendiendo mejor las plataformas de los diferentes candidatos que se están delineando cada vez con un poco más de detalle, pero siguen siendo todavía bastante generales. Entonces claramente el equipo va a seguir este diálogo con los asesores económicos etcétera, para seguir entendiendo mejor cuáles son las diferentes propuestas pero lo que yo percibí con los candidatos presidenciales es un profundo convencimiento de que hay que seguir transformando la economía argentina para que la economía argentina genere inversión, genere trabajo etcétera y se reactive la oferta de manera importante para crearlos cimientos de una economía que tenga un crecimiento sostenible y que cierre la brecha de producto que presenta la economía argentina.

SPEAKER: ¿Entonces no hay o vos no tenes la preocupación por una reversión en la política económica?

WERNER: Nosotros en esa etapa estamos escuchando, tratando de entender las posiciones de los diferentes candidatos y la verdad lo último que quiero en este momento es poner palabras en la boca de cada uno de estos candidatos. Pero lo que yo he visto es que están pensando un poco cuáles serían las medidas importantes para reactivar para continuar la reactivación de la economía argentina que esperamos que empiece en el segundo trimestre de este año y continúe en el resto del año. Pero esto tiene que ser un proceso que se sostenga en los próximos años y que digamos las bases para un proceso de inversión rápido que ayude a la creación de empleos etcétera, en la economía en la economía argentina. Claramente como lo hemos dicho la economía argentina está en una situación vulnerable. Creemos que la continuidad en la implementación de las políticas que están incluidas en el programa que se firmó con nosotros y es el paquete diseñado por la administración del presidente Macri, básicamente va a dar como resultado de este proceso. Pero eso no descarta que no haya otra combinación de políticas que complementen lo que está en el programa que puedan acelerar o no acelerar este proceso. Lo hemos visto en muchas economías en las que trabajamos que al haber un cambio producto de un proceso electoral hay modificaciones al programa y luego el programa continúa y continúa en una situación que apoya la reactivación económica. Entonces nosotros esperamos que ese sea el caso pero estamos observando y tratando de entender las diferentes ofertas de política económica y cuáles serían las implicaciones sobre la economía argentina de mediano plazo.

SPEAKER: Quería preguntarle sobre Venezuela. Dos cosas. La primera es, esta cifra acumulada esta contracción acumulada de 2013 que se eleva a 60 por ciento. Quería ver si lo pudiera colocar en una perspectiva histórica. ¿Hay precedentes en la región de una contracción tan grande? Estuve viendo ayer y vi que durante la Gran Depresión en Estados Unidos la contracción acumulada creo que llegó al 30 por ciento, en Alemania después justo después la Segunda Guerra Mundial llegó a 50 la contracción 44, 45. Si lo pusiera por favor para evaluar la importancia histórica. Y la otra pregunta es, acaba de decir que con Venezuela la región crece un porcentaje y sin Venezuela es otro diferente. ¿Hay países en la región cuyo crecimiento del PIB producto va a sufrir debido a la cantidad del flujo migratorio? Porque el otro día tu explicaste que el comercio con otros países es muy corto. El impacto no es por comercio sino en este caso sería migratorio, según entiendo.

MR. WERNER: La región crece menos con Venezuela que sin Venezuela por un tema aritmético de promedios. No es que Venezuela, con una perspectiva digamos de primer orden de magnitud, el hecho que Venezuela se contraiga más hace que el resto de los países crezcan menos. Lo que está pasando es que cuando uno promedia 10 países digamos, como ejemplo en ese caso un 34 por ciento promedia 10 países, por ejemplo. Y uno crece menos el promedio es menor. Es eso es lo único que estamos reportando aquí con el hecho de que Venezuela crezca realmente se contraiga en una magnitud tan grande hace que el promedio de crecimiento de la región sea menor nada más por una cuestión de promedios. Como dijimos anteriormente, la contracción tan profunda que ha tenido Venezuela en los últimos cinco años ha hecho que los efectos de transmisión negativos a las otras economías a los que tú te estás refiriendo ya se hayan dado en el pasado. O sea, obviamente la contracción acumulada de Venezuela ha tenido un impacto negativo en los últimos años sobre Colombia, pero hoy Colombia ya no le exporta a Venezuela. Entonces si Venezuela se contrae más, las magnitudes que Colombia exporta a Venezuela son tan pequeñas que no afectan en un primer orden de magnitud nuestra estimación para Colombia. Básicamente lo que se está dando es un fenómeno, yo creo que en las perspectivas económicas para Colombia un poquito hasta inverso. La migración que se está dando de Venezuela Colombia ha hecho que el Gobierno colombiano se haya visto en la necesidad de aflojar un poco sus metas fiscales e incrementar el gasto público para poder apoyar a esta población y eso genera un impacto positivo sobre el crecimiento económico. Ahora, sobre tu primera pregunta y te proporcionaremos los datos precisos digamos de manera bilateral terminando la conferencia porque ahora no los tengo conmigo, pero básicamente en la región no hemos visto una contracción de este tipo en la historia reciente. Segundo, cuando nosotros vemos nuestra base de datos que completa digamos comenzando desde los años 70, y comparamos las contracciones acumuladas en periodos de cinco años más profundas que hemos visto en los últimos 50 años en la economía mundial, Venezuela se encuentra digamos entre las primeras diez u ocho contracciones más altas y es la única que no está asociada a una economía en conflicto o a un desastre natural en una economía pequeña. Entonces en ese sentido claramente es un caso histórico donde no se han visto contracciones de este tipo por cuestiones que no tengan que ver por conflictos o por desastres naturales.

Speaker: ¿Puedo hacer un follow up? Y en otros países que no es Colombia, el atender este flujo migratorio le ha costado puntos de crecimiento del PIB por inversiones que han tenido que dedicar (inaudible).

MR. WERNER: Como dije, en el caso de Colombia la estimación de nuestro equipo que sigue la economía colombiana es que esto ha generado un ligero impulso a la economía colombiana porque hay que invertir digamos en apoyar \a este flujo migratorio y dado que Colombia tiene espacio fiscal difícil, pero para hacerlo ha sido ligeramente expansivo. Realmente Colombia es el caso digamos de recepción de inmigrantes más importante, por ejemplo, en el caso de la economía chilena vemos un fenómeno similar. Recientemente el Banco Central de Chile revisó al alza su crecimiento potencial y uno de los motivos por los cuales revisó al alza su crecimiento potencial, está asociado a la migración no solo de Venezuela y de otros países de la región. Pero claramente el proceso migratorio venezolano ha sido importante para explicar una revisión al alza porque su fuerza laboral se ha incrementado más allá de lo que sus estimaciones anteriores por cuestiones demográficas le habían implicado y también al mercado laboral chileno ha podido absorber esta migración venezolana de una manera relativamente positiva hasta la fecha. Entonces, por ahora hemos visto casos en los cuales esta absorción en el mercado laboral o digamos el apoyo humanitario que se le ha dado a los migrantes ha generado un incremento en la demanda agregada, y en ese sentido hemos visto fenómenos favorables para las economías. Esto no descarta que en el mediano plazo podamos llegar a ver que este fenómeno migratorio se incremente de manera importante y la capacidad de absorción en el corto plazo no sea la suficiente y genera una dinámica macroeconómica diferente. Pero a la fecha el resultado ha sido ligeramente positivo.

SPEAKER: ¿Y ese pronóstico de los 5 millones para final de año ya pasaría al límite y esa cifra es de ustedes o sale de la OEA?

MR. WERNER: Es de terceras instituciones. Luego te podemos dar la fuente precisa y yo te diría que hasta ahora estamos contemplando que el fenómeno migratorio en el margen siga generando efectos similares. Tal vez un poco menores, pero en la misma dirección que hemos visto, pero claramente como dije de profundizarse podría llegar digo esto es hipotético a transformarse en un proceso con características diferentes. ¿Por qué? Porque tal vez la calificación de las personas que están migrando podría ser diferente en términos de nivel educativo y por lo tanto el match con las necesidades del mercado laboral de un país podría ser diferente y por la absorción podría ser más difícil. O por ejemplo porque la población que empieza a migrar lo hace con menores también activos financieros. Entonces genera una mayor necesidad de apoyo en economías donde tal vez supongamos no tengan el espacio fiscal para hacerlo. Entonces, depende de las características de los migrantes y también depende de las características tanto del mercado laboral como la situación de finanzas públicas del país receptor.

SPEAKER: ¿También con respecto a Venezuela quería saber con este empeoramiento de las proyecciones podría adelantarnos un poco qué es lo que podemos esperar de la inflación para este año?

MR. WERNER: Como tú dices actualizamos los datos de inflación y de media a mediano plazo perspectivas económicas en las reuniones de primavera y las reuniones anuales. Por eso en esta entrega no está el dato de inflación, pero realmente estamos viendo digamos que la economía venezolana sigue experimentando una hiperinflación, pero la inflación mensual ha bajado de manera muy importante a raíz de las medidas que ha implementado el Banco Central de incrementar encajes, también a raíz digamos de algunas operaciones en el mercado cambiario y en ese sentido vemos una inflación significativamente más baja que la estimación de 10 millones. Probablemente, estemos viendo digamos para el año 2019 una inflación anual que sea menor a un millón por ciento. Pero el número exacto lo daremos en las reuniones anuales.

MS. CANDIA: Pasamos algunas preguntas online. I am going to switch to English. Ricardo Leopoldo Agencia Estado asks what would be the negative impacts to Brazil’s economy if the social security reform is not approved by Congress this year?

MR. WERNER: Well, I think as we have said, I mean the pension reform is an important component of an economic transformation in Brazil, that will help — will significantly help to put Brazilian fiscal accounts into a sustainable path. So, in that sense, we see the whole reform agenda of the current Brazilian government as very positive for the economic outlook in Brazil. This agenda incorporates the pension reform; incorporates a tax reform that we make the Brazilian tax system much more efficient. And therefore, it will also stimulate investment and unemployment generation. This agenda also includes a significant opening of the Brazilian economy, an important part of this agenda is obviously the EU Mercosur Agreement that was recently signed, and it has yet to be ratified by Congress. And I would say another important component of this agenda is the announce privatization program that also strives to make the Brazilian economy much more efficient. Given that pension reform is an important — a very important leg of this package I mean, obviously, the non-passage of these reform can generate a significant change in economic expectations going forward.

It would be, again, a little bit irresponsible to talk about how this change in expectations will materialize in different dimensions. But obviously, it will generate this change in expectations that will affect how economic agents see the future of Brazil and therefore, it will lead to some kind of revision in terms of future growth, equilibrium real exchange rate, etcetera, etcetera, but it will also depend, if it’s not passed in which conditions it is not passed. If it’s not passed and there is an agreement to evaluate it next year and the rest of the reform agenda continues. It’s one scenario.

If the non-passage of this reform is basically the signal that the whole economic agenda will not move forward, that’s another scenario. So, in that sense, I think it will be a little bit premature to discuss the implications. But I would say, it is a very important component of a very broad transformational agenda for the Brazilian economy. And so far, it seems that it is moving along the Brazilian Congress at the speed that we expected it and with a significant support from a broad spectrum of the political parties. And I think that’s encouraging. And we — in our baseline, we are seeing the approval of this reform this year and the continuation of the reform process in the next few years. And that’s the basis for our important acceleration of growth that we’re expected to take hold in 2020.

MS. CANDIA: Thank you Alejandro. We’ll go — we’ll keep the questions in English. What could cause that IMF change its forecast about Chile among reforms, discussions and Venezuelan immigration.

MR. WERNER: No basically, we — I mean, in the case of Chile what we’re following closely is the incoming economic data. We feel that there was a stronger than expected slowdown in the first half of the year. And our 3.2 percent growth assumption for the year as a whole, basically, it’s incorporating an acceleration of growth in the second half, on the back of the monetary policy actions, on the back of an acceleration in the infrastructure expenditure by the government. Those measures are already on track. We expect them to leave growth in the second half of the year, but we will be monitoring the economy closely to see if these effects are materializing at the speed that we are expecting now. So, that’s the basis for our 3.2 expected growth for the year. That implies an acceleration in the second half of 2019.

MS. CANDIA: Cuáles son las reformas estructurales que el FMI considera que debe implementar México para impulsar su productividad y también le gustaría conocer su opinión sobre el plan de negocios que presentó Pemex.

MR. WERNER: Cómo vamos ha enfatizado la economía mexicana ha presentado en las últimas décadas un problema de crecimiento importante es una de las economías en América Latina que ha crecido a tasas más débiles y en ese sentido pues no ha presentado un proceso de convergencia en ningún periodo con respecto a las economías avanzadas cuando vemos el PIB per cápita. Hay diferentes estudios que apuntan hacia diferentes cambios importantes que se podrían hacer en la economía para reactivar el crecimiento, para incrementar la productividad e incrementar la inversión etcétera.

Un enfoque digamos es en términos de empujar reformas sectoriales. Como vimos en el gobierno anterior en México la reforma del sector energético, la reforma del sector de telecomunicaciones, etcétera. Otro enfoque es digamos aquellos estudios que se han concentrado en el estudio de la informalidad y de esta hipótesis de que hay dos Méxicos, digamos el México del Norte vinculado con el sector manufacturero y la economía de Estados Unidos y un México en el sur que realmente no está integrado a cadenas de valor internacionales, etcétera, donde hay un capital humano digamos con menor nivel educativo etcétera que no está incorporado al proceso productivo y que esto ha generado también una división entre la economía formal y la informal y que básicamente hay que tomar medidas importantes para formalizar la economía y que eso genere más productividad y que integre digamos al resto del país a estas cadenas de valor. Y también hay digamos yo diría una tercera línea que también se enfoca en estudiar digamos los efectos de la distribución del ingreso sobre el crecimiento económico y que ven también vínculos importantes que van de la distribución del ingreso directamente al crecimiento económico y que en ese sentido el proceso de crecimiento que se ha dado en México al no haber tenido efectos tan importantes sobre la distribución del ingreso, esto ha sido una limitante para este crecimiento económico sostenido. En ese sentido, lo que es importante en una transformación económica y política como la que se está viendo en México, es poder devaluar un poco un programa integral de cambio estructural productivo y ver si ese programa que incorpore elementos en cada uno de las visiones que comenté y ver cuál puede ser el impacto de este programa. Ese programa se puede formar digamos de varias maneras y eventualmente estamos viendo partes de este programa, pero todavía obviamente estamos esperando y nuestros equipos irán a México para hacer la revisión del artículo cuarto en septiembre para evaluar de manera más integral esta nueva visión de crecimiento económico en México que consta digamos de un brazo que ha enfatizado el presidente López Obrador de disciplina fiscal, disciplina macroeconómica muy importante y luego cuenta con varias aristas en términos de políticas microeconómicas etcétera, en las que nos vamos a enfocar para tratar de entender el impacto que puede tener sobre el crecimiento económico. Como ya hemos comentado y hasta hay un blog digamos sobre la evolución, un blog de algunos colegas nuestro sobre la evolución de las empresas paraestatales en América Latina, claramente uno de los enfoques digamos que la comunidad internacional ha tenido recientemente los inversionistas etc. sobre el sector energético en México, cuáles son las posibilidades de que recupere una tasa de crecimiento importante en la producción de petróleo en el corto plazo y que Petróleos Mexicanos deje de generar impactos digamos negativos a la percepción de impactos negativos sobre las finanzas públicas del gobierno federal. Y como dije digamos nuestro equipo tendrá que entender más de cerca digamos el nuevo plan de negocios de Pemex cuando vayan a México, hablen con los funcionarios públicos y veamos de manera integral cómo ese plan digamos también se combina con las perspectivas de mediano plazo de finanzas públicas para lograr al mismo tiempo un crecimiento de la producción de crudo pero digamos en un contexto de finanzas públicas sostenibles de mediano plazo.

MS. CANDIA: ¿Alguna pregunta aquí en la sala?

SPEAKER: Alejandro, Alberto Fernández dijo ayer que iba a aumentar las jubilaciones pagándolas con lo que se paga a intereses de las Leliq. Hoy el dólar saltó 40 centavos después de esas declaraciones. ¿Es viable pensar en una propuesta de ese estilo? Él habla de un aumento del 20 por ciento.

MR. WERNER: Como dije anteriormente, tenemos que entender digamos de manera más integral estas propuestas, yo creo que responder de manera prematura a lo que leímos en los periódicos sería irresponsable de nuestro lado y por eso pues básicamente nuestra misión va digamos de manera muy frecuente. Esperamos también que nuestro jefe de emisión tenga la oportunidad de hablar con los asesores y con la apertura que tuvieron con nosotros cuando estuve yo con nuestro representante Trevor Allyene con el candidato Fernández y entender un poco más exactamente cuáles son los detalles de diferentes propuestas. En este momento yo te diría que algo que se dijo ayer necesitaríamos entenderlo mejor, entender digamos la congruencia del marco fiscal en el que están pensando antes de dar una respuesta a esta pregunta.

MS. CANDIA. Gracias. Con esto damos por concluida la conferencia de prensa. Muchas gracias por estar aquí, por vernos online. Buenos días a todos.

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